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Integration of Pension, Assistance and Taxation: How to Balance Insurance Role with Redistribution Role


  • Tanaka, Hideaki


The Pension Reform 2004 in Japan has fixed the schedule of contribution hike until 2017 and incorporated a, mechanism of maintaining the financial sustainability of pension funds to some extent. However, there still, remain a lot of problems including unequal burden-sharing, unqualified pensioners, old-age poverty and, missing of contribution records. These problems are fundamentally originated in the structure of Japanese, pension systems which are divided into several occupational groups. Firstly, this paper addresses the Japanese, pension system is "inefficient" in terms of both smoothing income (insurance role) and providing adequate, income (redistribution role), although the overall income level of Japanese elderly relative to young workers is, better than that of the OECD average. Secondly, the paper reveals this inefficiency derives from, fragmentations within pension systems, between pension and public assistance, and between pension and, taxation. Finally, the paper argues the urgency of integration of relevant provisions for ensuring old-age, income security in the context of rapid change in economic and social circumstances and discusses major issuesin proposing several alternatives for integration with reference to major OECD countries' experiences.

Suggested Citation

  • Tanaka, Hideaki, 2008. "Integration of Pension, Assistance and Taxation: How to Balance Insurance Role with Redistribution Role," PIE/CIS Discussion Paper 370, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:piecis:370 Note: This paper was originally presented at the Tokyo Meeting for ESRI (Economic and Social Research Institute, Cabinet Office) International Collaboration Projects 2007, March 4&5 2008., "April 1, 2008" -- p. 1

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    References listed on IDEAS

    1. Townsend, Robert M, 1994. "Risk and Insurance in Village India," Econometrica, Econometric Society, vol. 62(3), pages 539-591, May.
    2. Ogaki, Masao & Zhang, Qiang, 2001. "Decreasing Relative Risk Aversion and Tests of Risk Sharing," Econometrica, Econometric Society, vol. 69(2), pages 515-526, March.
    3. Chiaki Hara, 2006. "Heterogeneous Risk Attitudes In A Continuous-Time Model," The Japanese Economic Review, Japanese Economic Association, vol. 57(3), pages 377-405.
    4. Hara, Chiaki, 2008. "Heterogeneous Impatience in a Continuous-Time Model," PIE/CIS Discussion Paper 396, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    5. Maurizio Mazzocco & Shiv Saini, 2012. "Testing Efficient Risk Sharing with Heterogeneous Risk Preferences," American Economic Review, American Economic Association, vol. 102(1), pages 428-468, February.
    6. Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 537-579.
    7. Christian Gollier & Richard Zeckhauser, 2005. "Aggregation of Heterogeneous Time Preferences," Journal of Political Economy, University of Chicago Press, vol. 113(4), pages 878-896, August.
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    More about this item


    universal pension; social insurance; integration; public assistance; taxation on pension;

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies


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