Social Security Tax and Endogenous Technical Change in an Economy with an Aging Population
AbstractThis paper presents a classical model of economic growth which incorporates class conflict and induced technological change to show how demographic changes can affect future income distribution and production relations in industrialized countries. Specifically, I use an extended real wage Phillips curve to account for the effects of a social security tax on income distribution and therefore on capital accumulation and employment. In this framework output growth is determined from the supply side by available savings. Analytical and simulation results indicate that the sustainability of an economy with fast population aging over transient paths hinges upon improvements in labor productivity, hence, the specific mechanism of technical progress in place.
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Bibliographic InfoPaper provided by University of Utah, Department of Economics in its series Working Paper Series, Department of Economics, University of Utah with number 2011_04.
Length: 26 pages
Date of creation: 2011
Date of revision:
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Population aging; Social security tax; Endogenous technical change;
Other versions of this item:
- Codrina Rada, 2012. "Social Security Tax And Endogenous Technical Change In An Economy With An Aging Population," Metroeconomica, Wiley Blackwell, vol. 63(4), pages 727-756, November.
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-02-26 (Economics of Ageing)
- NEP-ALL-2011-02-26 (All new papers)
- NEP-MAC-2011-02-26 (Macroeconomics)
- NEP-PUB-2011-02-26 (Public Finance)
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