CIRJE-F-372 | "Public Debt and Economic Growth in an Aging Japan" |
Author Name | Ihori, Toshihiro, Ryuta Ray Kato, Masumi Kawade and Shun-ichiro Bessho |
Date | September 2005 |
Full Paper | PDF file |
Remarks | 貝塚啓明 アンクルーガー編, 『日本財政 破綻回避への戦略』, 日本経済新聞社, 所収。 |
Abstract |
This paper examines the effects of the demographic change and the government debt
policy in Japan on economic growth and economic welfare, particularly by taking into account
the existing public pension scheme as well as national medical expenditure through the
existing public health insurance, where a computational overlapping generations model is
used within a general equilibrium context. One of the main results of this paper is that
the tax burden (GDP) ratio will increase up to about 36%, and the social security burden
(GDP) ratio will increase up to 23.3% in 2050, even though the government tries to have a
positive primary balance by 2010. The ratio of public health insurance benefits to GDP is
expected to increase at 1% every 10 years, and the ratio will be around 9.6% in 2050. The
2004 public pension reform will successfully result in a 13 point decrease in the contribution
rate from 36.44% to 23.53%, and reduce the social security burden (GDP) ratio by about 8
points from 23.27% to 15.02% in 2050, compared with the benchmark case. |