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Public Education, Pension and Debt Policy

Author

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  • Kazumasa Oguro

    (Hosei University)

  • Masaya Yasuoka

    (School of Economics, Kwansei Gakuin University)

Abstract

In some OECD countries, public debt is increasing to the point that fiscal reforms should be considered. Our paper sets a government budget constraint with the deficit of primary balance and examines how such a policy affects public debt in the long run. In the model, we consider policies of three types to reduce the deficit of primary balance: decreases in pension benefits and public education investment, and an increase in income tax. A decrease in pension benefit or an increase in tax revenues can inevitably raise the capital stock per unit of effective labor. Depending on the parametric conditions, they can also reduce the public debt per unit of effective labor and the ratio of public debt to gross domestic product (GDP).

Suggested Citation

  • Kazumasa Oguro & Masaya Yasuoka, 2023. "Public Education, Pension and Debt Policy," Discussion Paper Series 259, School of Economics, Kwansei Gakuin University.
    • Handle: RePEc:kgu:wpaper:259
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    References listed on IDEAS

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    More about this item

    Keywords

    Education Investment; Fiscal Sustainability; Pension; Public Debt;
    All these keywords.

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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