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Policy Challenges of Population Aging in Ireland

Author

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  • Dora M Iakova
  • Dennis P Botman

Abstract

The projected rise in age-related government spending as a share of GDP in Ireland over the next forty years is among the highest in the euro area. In the absence of reforms, public debt will increase to unsustainable levels. This paper uses the IMF's Global Fiscal Model to compare the macroeconomic effects of different fiscal strategies to accommodate the rise in age-related spending. The simulations suggest that adopting a package of measures, including an increase in the retirement age, broadening the tax base, and raising indirect taxes, would be a more growth-friendly strategy than relying exclusively on raising the social security contribution rate.

Suggested Citation

  • Dora M Iakova & Dennis P Botman, 2007. "Policy Challenges of Population Aging in Ireland," IMF Working Papers 07/247, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:07/247
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=21420
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    References listed on IDEAS

    as
    1. Manmohan S. Kumar & Dennis P Botman, 2007. "Global Aging Pressures; Impact of Fiscal Adjustment, Policy Cooperation, and Structural Reforms," IMF Working Papers 07/196, International Monetary Fund.
    2. Nicoletta Batini & Papa N'Diaye & Alessandro Rebucci, 2005. "The domestic and global impact of Japan’s policies for growth," Proceedings, Federal Reserve Bank of San Francisco.
    3. Ford, Robert & Laxton, Douglas, 1999. "World Public Debt and Real Interest Rates," Oxford Review of Economic Policy, Oxford University Press, pages 77-94.
    4. Dirk V Muir & Douglas Laxton & Dennis P Botman & Andrei Romanov, 2006. "A New-Open-Economy Macro Model for Fiscal Policy Evaluation," IMF Working Papers 06/45, International Monetary Fund.
    5. Hans Fehr & Sabine Jokisch & Laurence J. Kotlikoff, 2004. "The Role of Immigration in Dealing with the Developed World's Demographic Transition," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(3), pages 296-296, September.
    6. repec:rus:hseeco:316801 is not listed on IDEAS
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    Cited by:

    1. Justin Doran, 2012. "An analysis of the interdependence of demographic factors, labour effort and economic growth in Ireland," International Journal of Social Economics, Emerald Group Publishing, vol. 39(3), pages 221-237, February.

    More about this item

    Keywords

    Economic models; Aging; Ireland; Government expenditures; Fiscal policy; Pension regulations; Public debt; Taxation; Tax bases; simulation; general equilibrium; pension; pension system; retirement; pensions;

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