A Study on Japan's Social Security System by a Macro-economic Model Endogenizing It(in Japanese)

Japan's social security expenditure has been increasing rapidly. Its ratio against the national income reached to as high as 19.6% in fiscal year 1999. The interdependency between Japan's macro-economy and her social security system is now obvious and cannot be neglected when we discuss possible reform plans of the system. To take it into account empirically, we have built a macro-economic model of the Japanese economy that places special emphasis on the social security system, which consists of public pension, medical care, social welfare and long-term care. In this paper, we have conducted several policy simulations of pension reform plans by using the model. Main conclusions are as follows. a. The Employee's Pension ( Kosei Nenkin ) is considered to be sustainable if the 1999 Pension Reform is fully realized as scheduled. b. On the other hand, the sustainability of the National Pension ( Kokumin Nenkin ) remains doubtful even if the 1999 reform is fulfilled. c. Switching the revenue source of the Basic Pension (=National Pension) from a mixture of taxes and social security contributions to taxes only by increasing the consumption tax, may raise Japan's potential economic growth rate. It is because that the change would make it possible to reduce the contribution rates and to raise the real wage, which would result in increasing the labor supply especially of women and elders. This proposal would deserve full consideration at least from the standpoint of the potential growth rate.