2003 Fiscal Year Final Research Report Summary
Growth Effects of Public Pensions and Long-Term Care
| Project/Area Number |
13630023
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
経済理論
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| Research Institution | Nanzan University |
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Principal Investigator |
MIYAZAWA Kazutoshi Nanzan University, Faculty of Economics, Associate Professor, 経済学部, 助教授 (00329749)
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| Project Period (FY) |
2001 – 2003
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| Keywords | Public Long-term Care / Public Pension / Economic Growth / Human Capital Formation / Social Security / Family |
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| Research Abstract |
The report consists of seven chapters. Chapter 1 summarizes the purpose and key results of this research. Chapter 2 "Pension and growth : a financial perspective" analyzes the growth effect of unfunded public pensions, assuming three alternative tax base, i.e., wage income, capital income, and comprehensive income. It shows changing the tax base according to the stage of economic development is an easy and useful method to induce the growth effect of public pensions. Chapter 3 "Pension and growth : a consideration for intrafamily transfers" analyzes the macroeconomic effect of public pensions based on a two-way intrafamily transfer in middle age. One of the strong policy implications is public pensions can be used to lead economy from a stagnant equilibrium to a growth equilibrium.
Chapter 4 "Optimal pension system" discusses whether some kind of public pension achieve social optimum. The answer is no in general, although public pensions partly endogenize the intergenerational spillover
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effect of human capital formation. Nevertheless public pensions are effective to achieve optimal allocations of resource and time. Chapter 5 "Public long-term care and growth" analyzes the macroeconomic effect of public long-term care. Like a pension, public long-term care can lead economy from a stagnant equilibrium to a growth equilibrium. Further the magnitude is larger under public long-term care scheme because the nature of in-kind transfer has intrinsically an additional incentive to invest in human capital. Our result supports the current system of public long-term care insurance in Japan. Chapter 6 "Reforms in unemployment insurance and a public pension" discusses under what conditions the reforms in unemployment insurance and a public pension can be Pareto-improving. Assuming that labor force participation has an agglomeration effect, we show policy changes such as reducing unemployment and encouraging the unemployed to acquire general skills can be supported by every generations. Chapter 7 "Growth and inequality" analyzed the relationship between growth and inequality from a demographic point of view. We may find ourselves in a stagnant and inequitable situation in the near future. Social security systems cannot be preserved if the inequality generates a serious conflict between younger workers and older retirement. If the government would like to avoid it., it should pursue a policy in favor of younger workers such as tax reduction of savings in order to enhance capital formation. Less
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