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Julkisen talouden rahoituksellinen kestävyys Suomessa

Author

Listed:
  • Lassila, Jukka
  • Valkonen, Tarmo

Abstract

This study analyses financial sustainability of the Finnish public sector. Current tax rates are unlikely to yield sufficient tax revenue for financing public expenditure under an ageing population. The estimate of the sustainability gap is 2œ per cent of GDP, for the period 2010 - 2060. The estimate is based on the 2009 population projection by Statistics Finland, where life expectancies are higher and net migration substantially larger than in earlier projections. Health and long-term care costs are modeled to be partly dependent on the proximity to death, and thus grow slowly compared to the growth in the number of old people. The higher initial public debt increases the vulnerability of the public finances to economic and demographic risks.

Suggested Citation

  • Lassila, Jukka & Valkonen, Tarmo, 2011. "Julkisen talouden rahoituksellinen kestävyys Suomessa," Discussion Papers 1237, The Research Institute of the Finnish Economy.
  • Handle: RePEc:rif:dpaper:1237
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    File URL: http://www.etla.fi/wp-content/uploads/2012/09/dp1237.pdf
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    Cited by:

    1. Oksanen, Heikki, 2014. "Public finance sustainability gap and raising the retirement age, abstract and full summary," Research Reports 177, VATT Institute for Economic Research.

    More about this item

    Keywords

    public finance; pensions; health and long-term care; sustainability gap;

    JEL classification:

    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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