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The Economics of Ageing—What Do We Face?

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  • Ian M. McDonald

Abstract

We, as taxpayers, face challenging problems in assisting the well‐being of old people mainly because preparing for and living through old age is a risky business. Through government, taxpayers can provide some insurance against the risks of old age, especially the risk of bad health and the risk of a long life. However, the ageing population suggests that maintaining this support will require increased taxation. This article quantifies this challenge for Australia and concludes that although increased taxation may be required it will be easily affordable from the much higher incomes generally received due to the secular increase in productivity.

Suggested Citation

  • Ian M. McDonald, 2020. "The Economics of Ageing—What Do We Face?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 53(4), pages 586-597, December.
    • Handle: RePEc:bla:ausecr:v:53:y:2020:i:4:p:586-597
    DOI: 10.1111/1467-8462.12391
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    References listed on IDEAS

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    1. ROSS GUEST & IAN M. McDONALD, 2003. "How Much Support Will The Taxpayer Provide For Us When We Are Old?," Economic Papers, The Economic Society of Australia, vol. 22(1), pages 1-12, March.
    2. Henrik Jacobsen Kleven, 2014. "How Can Scandinavians Tax So Much?," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 77-98, Fall.
    3. Ian M. McDonald, 2019. "The Economics of Ageing—What do you Face?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 52(4), pages 496-506, December.
    4. Kleven, Henrik Jacobsen, 2014. "How can Scandinavians tax so much?," LSE Research Online Documents on Economics 66111, London School of Economics and Political Science, LSE Library.
    5. Kudrna, George & Tran, Chung & Woodland, Alan, 2015. "The dynamic fiscal effects of demographic shift: The case of Australia," Economic Modelling, Elsevier, vol. 50(C), pages 105-122.
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