The Revenue Demands of Public Employee Pension Promises
AbstractWe calculate increases in contributions required to achieve full funding of state and local pension systems in the U.S. over 30 years. Without policy changes, contributions would have to increase by 2.5 times, reaching 14.1% of the total own-revenue generated by state and local governments. This represents a tax increase of $1,385 per household per year, around half of which goes to pay down legacy liabilities while half funds the cost of new promises. We examine sensitivity to asset return assumptions, wage correlations, the treatment of workers not currently in Social Security, and endogenous geographical shifts in the tax base.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18489.
Date of creation: Oct 2012
Date of revision:
Note: AG PE
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Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
- H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
- H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-03 (All new papers)
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