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How Should A Government Finance for Pension Benefit?

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  • Yasuoka, Masaya

Abstract

Based on Ono (2010), this short note presents consideration of the consumption tax and examines how tax reform to maintain the neutrality of pension benefit affects income growth rate and the employment rate. A decrease in the contribution rate of workers with an increase in consumption tax raises employment, but the effect on income growth is ambiguous. A decrease in the contribution rate of firms with an increase in consumption tax decreases the employment and facilitates income growth.

Suggested Citation

  • Yasuoka, Masaya, 2018. "How Should A Government Finance for Pension Benefit?," MPRA Paper 87483, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:87483
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    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Grossman, Gene M. & Yanagawa, Noriyuki, 1993. "Asset bubbles and endogenous growth," Journal of Monetary Economics, Elsevier, vol. 31(1), pages 3-19, February.
    3. Berthold U. Wigger, 1999. "Public Pensions and Growth," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 56(2), pages 241-241, June.
    4. Fanti, Luciano & Gori, Luca, 2010. "Increasing PAYG pension benefits and reducing contribution rates," Economics Letters, Elsevier, vol. 107(2), pages 81-84, May.
    5. Yeopil Yoon & Gabriel Talmain, 2001. "Endogenous Fertility, Endogenous Growth and Public Pension System: Should We Switch from a Pay‐As‐You‐Go to a Fully Funded System?," Manchester School, University of Manchester, vol. 69(5), pages 586-605, October.
    6. Shuanglin Lin & Xiaowen Tian, 2003. "Population growth and social security financing," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(1), pages 91-110, February.
    7. Tetsuo Ono, 2010. "Growth and unemployment in an OLG economy with public pensions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(2), pages 737-767, March.
    8. Berthold U. Wigger, 1999. "Pay-as-you-go financed public pensions in a model of endogenous growth and fertility," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(4), pages 625-640.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Aging society; Elderly care services; Tax system; Endogenous growth;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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