Population Aging, Fiscal Policies, and National Saving: Predictions for Korean Economy
This paper evaluates the effects of population aging and fiscal policies on national saving in Korean situation. For the prediction of the national savings rate of Korea for the next several decades, we employ a life-cycle model, which incorporates the generational accounting approach needed to assess the distribution of fiscal burden across generations. We found that the rapid population aging and long-term budgetary imbalance will substantially lower the national savings rate in Korea. A sensitivity analysis based on an alternative model, an altruistic family model, shows that these predictions are robust to the specification of altruism among generations. In addition, the estimation results of consumption functions with respect to various kinds of wealth suggest that the annuitization of wealth due to maturing of public pensions and introduction of reverse annuity mortgage is likely to further decrease the savings rate in the future.
|Date of creation:||May 2006|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jagadeesh Gokhale & Laurence J. Kotlikoff & John Sabelhaus, 1996.
"Understanding the Postwar Decline in U.S. Saving: A Cohort Analysis,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 27(1), pages 315-407.
- Jagadeesh Gokhale & Laurence J. Kotlikoff & John Sabelhaus, 1996. "Understanding the Postwar Decline in U.S. Saving: A Cohort Analysis," NBER Working Papers 5571, National Bureau of Economic Research, Inc.
- Guest, R.S. & McDonald, I.M., 1999.
"Demographic Change in Asia: the Impact on Optimal National Saving, Investment and the Current Account,"
Department of Economics - Working Papers Series
726, The University of Melbourne.
- Ian S McDonald & Serge BÃ©sanger & Ross Guest, 2000. "Demographic Change in Asia; The Impacton Optimal National Saving, Investment, and the Current Account," IMF Working Papers 00/115, .
- A. Bovenberg & Harry Rele, 2000. "Generational Accounts for The Netherlands: An Update," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(4), pages 411-430, August.
- Alan J. Auerbach & Young Jun Chun, 2003.
"Generational Accounting in Korea,"
NBER Working Papers
9983, National Bureau of Economic Research, Inc.
- Auerbach, Alan J. & Chun, Young Jun, 2006. "Generational accounting in Korea," Journal of the Japanese and International Economies, Elsevier, vol. 20(2), pages 234-268, June.
- Alan J. Auerbach & Young Jun Chun & Ilho Yoo, 2005.
"The Fiscal Burden of Korean Reunification: A Generational Accounting Approach,"
FinanzArchiv: Public Finance Analysis,
Mohr Siebeck, Tübingen, vol. 61(1), pages 1-62, March.
- Alan J. Auerbach & Young Jun Chun & Ilho Yoo, 2004. "The Fiscal Burden of Korean Reunification: A Generational Accounting Approach," NBER Working Papers 10693, National Bureau of Economic Research, Inc.
- Ilho Yoo & Alan J. Auerbach & Young Jun Chun, 2004. "The Fiscal Burden of Korean Reunification: A Generational Accounting Approach," Econometric Society 2004 Latin American Meetings 313, Econometric Society.
- Auerbach, Alan J & Kotlikoff, Laurence J, 1992. " The Impact of the Demographic Transition on Capital Formation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(2), pages 281-295.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:12265. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.