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A Study on Financial Deficit and Declining Birthrate  From the Viewpoint of “Children as a Social Security Revenue Sourceâ€Â

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  • Kazumasa Oguro

    (PRI)

  • Shoichiro Yuyama

Abstract

With a declining birthrate and an aging population, Japan is increasingly finding itself in deeper financial difficulties. Recognizing these conditions, the government is now examining a framework for maintaining fiscal sustainability, mainly at the Council of Economic and Fiscal Policy. The predominant cause of such financial difficulties is the existence of financial deficit which has persevered for several years. In the background, however, it has also been largely influenced by the increasing social security cost . In actual fact, social security benefit made up 11.3% of the annual GDP in 1987, rising to 16.8% in 2003, which was an increase of about 1.5 times. On the other hand, the financial balance (relative to GDP) of the general government account accrued a 0.3% surplus in 1987, but a 7.7% deficit in 2003. This paper presents a hypothesis, as one of possible explanations, that the supplementing of social security benefits by the financial deficit also acts as a factor to encourage the decline in birthrate.

Suggested Citation

  • Kazumasa Oguro & Shoichiro Yuyama, 2008. "A Study on Financial Deficit and Declining Birthrate  From the Viewpoint of “Children as a Social Security Revenue Sourceâ€Â," Development Economics Working Papers 22605, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:develo:22605
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    More about this item

    Keywords

    hypothesis; social security; Japan; Financial Deficit; Declining Birthrate;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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