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

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Pension reform
Demographics
Japan
Fiscal
Economic activity
Scenarios
Retirement age
Replacement rate
Tax burden
Equivalence
Costs

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

When do we Start? Pension reform in ageing Japan. / Kitao, Sagiri.

In: Japanese Economic Review, Vol. 68, No. 1, 01.03.2017, p. 26-47.

Research output: Contribution to journalArticle

Kitao, Sagiri. / When do we Start? Pension reform in ageing Japan. In: Japanese Economic Review. 2017 ; Vol. 68, No. 1. pp. 26-47.
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