Browsing by Subject "H55"

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  • Kinnunen, Helvi (2008)
    Bank of Finland Research Discussion Papers 21/2008
    This paper investigates public pension funding using a dynamic general equilibrium macroeconomic model (DSGE) that facilitates investigation of distortionary effects of fiscal and pension policy responses to ageing. The model is calibrated to the Finnish economy, which will encounter substantial ageing pressures in the near future. During the transition to an older population structure ageing costs can be substantially lowered by allowing public funds to smooth out the tax responses. Cutting down on pension prefunding at a time when the pace of ageing is at its peak reduces the necessary tax hikes and stimulates labour supply growth at the moment when the labour market is tightest. With smaller funding needs, ageing leads to a slower growth in labour costs, a better employment conditions and faster production growth. Keywords: ageing, general equilibrium, public finance, government funds JEL classification numbers: E13, H55, J11, J26
  • Kilponen, Juha; Kinnunen, Helvi; Ripatti, Antti (2006)
    Bank of Finland Research Discussion Papers 28/2006
    This paper extends Gertler's (1999) tractable overlapping generations model with life-cycle features by allowing for distortionary taxation, demographic transition and stochastic variation in demographic structure.The model is then used to study demographic change in the small open economy of Finland. Simulations highlight the key role played by labour market responses to ageing.When the responses of labour supply, wages, and hence private consumption, to higher taxation are consistently accounted for, population ageing has clearly much larger effects on public finance, when compared to mechanical sustainability calculations.Stochastic simulations suggest that lengthening of working time has only a modest alleviating effect on the fiscal burden of ageing.This is due to the fact that stochastic variation in the length of working time has only a relatively small effect on the model's dependency ratio.Variation in life expectancy is clearly much more important. Key words: ageing, general equilibrium, public finance, demographic uncertainty JEL classification numbers: E13, H55, J11, J26
  • Feng, Jin; He, Lixin; Sato, Hiroshi (2009)
    BOFIT Discussion Papers 2/2009
    Published in Journal of Comparative Economics, Vol. 39, Iss.4, Dec. 2011, pp. 470-485.
    We relate household saving to pension reform, to explain the high household saving rates in urban China from a new perspective. We use the exogenous - policy induced - variation in pension wealth to explicitly estimate the impact of pension wealth on household saving, and obtain a significant offset effect of pension wealth on household saving. Our estimations show that pension reform boosted the household saving rate in 1999 by about 6 percentage points for cohort aged 25-29 and by about 3 percentage points for cohort aged 50-59. Our results also indicate that declining pension wealth reduces expenditure on education and health more than on other consumption items. Keywords: pensions, pension reform, household savings rate, China JEL: H31, H55, P35
  • Vlasov, Sergey; Mamedli, Mariam (2018)
    BOFIT Policy Brief 10/2018
    Russia’s level of pension provision lags most OECD countries, as well as faces challenges from rising pension fund deficits and an aging population. On the current course, in the long run Russia can expect decreased budget revenues that would require to adjust government spending. While many countries moved after the 2008 global financial crisis to overhaul their pension systems, Russia postponed action until recently. This paper presents estimates of retirement pension expenditures through 2035 under various assumptions about economic growth, demographic composition, and possible reforms to the pension system. Two recent measures by the government (abolition of indexing adjustments for working retirees and an increase in the retirement age for public servants) will slightly mitigate the long-term negative trends. For any of our assumptions, Russia’s decision to begin raising the retirement age by six months a year starting in 2019 will put the retirement pension expenditures relative to GDP on the downward trajectory. This reform allows an accelerating increase in pensions to improve retiree welfare and makes up for some of expected decline in overall budget revenues, making it easier to stabilize the level of public spending relative to GDP. Acceleration of economic growth backed by structural reforms limits further the growth in pension expenditures.
  • Kinnunen, Helvi (2002)
    Suomen Pankin keskustelualoitteita 28/2002
    Julkisen talouden rahoituspohjan kestävyys väestön vanhetessa on kiistaton ongelma Suomessa kuten useissa muissakin länsimaissa. Työikäisen väestön väheneminen, työvoiman ikääntyminen ja hyvin vanhojen ihmisten lukumäärän kasvu on vaikea yhdistelmä julkisen talouden kestävyyden näkökulmasta.Epäedulliseksi muuttuvalla ikärakenteella on pitkäaikaiset vaikutukset julkisen talouden tasapainoon ja liikkumavaraan.Suureksi jäänyt rakenteellinen työttömyys ja työvoiman keski-iän nousu lähivuosina heikentävät julkisten palveluiden rahoitusperustaa.Vuoteen 2004 saakka ulottuvan Suomen Pankin ennusteen jatkoksi tehdyt laskelmat osoittavat, että jos eläkkeelle hakeutuminen ei selvästi muutu, paineet verotuksen kiristämiseen lähivuosina ovat ilmeiset. Laskelmat osoittavat, että eläkeuudistus ei riitä purkamaan ikääntymisestä aiheutuvia verotuksen kiristämispaineita.Jos eläkeuudistuksen lisäksi julkisen palvelutuotannon tuottavuutta saataisiin kohennettua, ikääntyminen ei välttämättä johtaisi verotuksen kiristämiseen. väestön ikääntyminen, veroaste, eläkeuudistus, julkisen palvelutuotannon tehokkuus JEL-luokittelu: H55, H62, J11, J18