When do we Start? Pension reform in ageing Japan

Sagiri Kitao

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Japan is faced with rapid demographic ageing and fiscal challenges. This paper simulates pension reform to reduce the replacement rate by 20% and raise the retirement age by 3 years gradually over a 30-year period. We consider three scenarios with different points in time to initiate reform in 2020, 2030 and 2040, respectively. A delay would suppress economic activities, lowering output by up to 4% and raising tax burden by more than 8% of total consumption. Delaying reform implies a transfer of costs of demographic ageing to the young and deteriorates the welfare of future generations by up to 3% in terms of consumption equivalence.

Original languageEnglish
Pages (from-to)26-47
Number of pages22
JournalJapanese Economic Review
Volume68
Issue number1
DOIs
Publication statusPublished - 2017 Mar 1

ASJC Scopus subject areas

  • Economics and Econometrics

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