Aging and the Financing of Social Security in Switzerland
| Autor: | Mirela Keuschnigg, Christian Jaag, Christian Keuschnigg |
|---|---|
| Rok vydání: | 2011 |
| Předmět: |
Statistics and Probability
Economics and Econometrics Labour economics J26 Aging unemployment Aging social security retirement human capital unemployment Population Overlapping generations model jel:J64 jel:J26 Economics ddc:330 D91 human capital D58 H55 education social security Finance jel:D91 education.field_of_study business.industry economics Per capita income jel:H55 jel:D58 Social security retirement Value-added tax Life expectancy Dependency ratio J64 business Retirement age |
| Zdroj: | Swiss Journal of Economics and Statistics. 147(II):181-231 |
| Popis: | This paper studies the quantitative impact of aging on the financing of social security and the public sector in Switzerland. Demographic projections forecast a doubling of the dependency ratio until 2050 as well as an increase of 10% in total population due to longer life expectancy. We use a computational growth model with overlapping generations, including labor market adjustment on five different behavioural margins: labor market participation, hours worked, job search, retirement, and on-the-job training. Starting with a passive fiscal strategy, our simulations show that a doubling of the old age dependency ratio might reduce per capita income by more than 20 percent and necessitate a long-run increase of wage taxes and social security contributions by 21 percentage points. A comprehensive reform package, including an increase in the effective retirement age to 68 years and several other measures, may limit the increase of the tax burden to 4 percentage points of the value added tax and reduce the decline of per capita income to 6% in the long-run. firms typically have a high growth potential, need external funds to finance investment, and rely on the key effort and know-how of inside entrepreneurs. Given the limited amount of tangible assets and the non-contractible nature of entrepreneurial effort, these firms are often financially constrained. Access to external funds becomes an important factor in the expansion of innovative industries. This paper models a two sector economy of innovative and standard industries and shows how the pattern of comparative advantage is shaped by factor endowments and variables relating to corporate finance. In particular, a larger equity ratio of young entrepreneurial firms and tough corporate governance standards relax the financing constraints and create a comparative advantage in innovative industries. |
| Databáze: | OpenAIRE |
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