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2014 Fiscal Year Final Research Report

Effects of Pay-As-You-Go Pension on Macroeconomy

Research Project

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Project/Area Number 24530349
Research Category

Grant-in-Aid for Scientific Research (C)

Allocation TypeMulti-year Fund
Section一般
Research Field Public finance/Monetary economics
Research InstitutionKobe City University of Foreign Studies (2014)
Fukuyama University (2013)
Kobe University (2012)

Principal Investigator

FUJII Takao  神戸市外国語大学, 外国語学部, 准教授 (80547216)

Co-Investigator(Kenkyū-buntansha) IRITANI Jun  福山大学, 経済学部, 教授 (30107106)
Project Period (FY) 2012-04-01 – 2015-03-31
Keywords賦課方式年金 / 世代内公平性
Outline of Final Research Achievements

We have studied the effects of pay-as-you-go pension system on capital accumulation, welfare and income inequality under a two-period overlapping generations model with heterogeneous agents. According to conventional wisdom, an increase in PAYGO pension size will crowd out capital if an economy is dynamically efficient, which imply the decrease in social welfare. Our research, however, obtained exactly the opposite results. We examine a pay-as-you-go policy in an economy containing heterogenous households--an increase in constant contribution financed by a decrease in contribution rate proportional to income. We can show that the policy crowds in capital and increases welfare. Moreover, we obtained a necessary and sufficient condition under which the policy will decrease the inequality in life income distribution.

Free Research Field

マクロ経済、財政政策

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Published: 2016-06-03  

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