Population growth and social security financing |
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| Authors: | Shuanglin Lin Xiaowen Tian |
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| Institution: | (1) Department of Economics, University of Nebraska, Omaha, NE 68182-0048 (Fax: +01-402-554-2853. e-mail: slin@mail.unomaha.edu), US;(2) East Asian Institute, National University of Singapore, AS5, Level 4, 7 Arts Link, Singapore, 117571 (Fax: +65-779-3409. e-mail: eaitianxw@nus.edu.sg), SG |
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| Abstract: | By allowing the population growth to be flexible, this paper analyzes the effect of a tax reform that involves an introduction
of consumption taxation for social security financing. It is found that population growth and labor supply play an important
role in determining the effect of the tax reform. If population growth and labor supply are exogenous, then an introduction
of a consumption tax for social security financing, with the payroll tax rate being endogenous, decreases the interest rate
and increases capital accumulation. However, if population growth and labor supply are endogenous, then an introduction of
a consumption tax for social security financing increases the interest rate and reduces capital accumulation.
Received: 26 February 2001/Accepted: 26 August 2001 |
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| Keywords: | JEL classification: H2 J2 |
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