A Reexamination of Basic Pension Reform Financed by a Consumption Tax: An Analysis Using the Right-to-Manage Model

Ryouichi Ikeda ()
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Ryouichi Ikeda: Graduate School of Economics, Osaka University

No 09-08, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper examines pension premiums and a consumption tax as ways to finance basic pensions. The union wage model suggests that labor wage taxation increases the rate of unemployment. Using the right-to-manage model, it becomes clear that an increase in premiums for labor wages actually leads to increased unemployment rates. Furthermore, I argue that by decreasing premiums and introducing consumption tax for basic pension, the rate of unemployment will decrease. However, the study revealed that this basic pension reform would decrease benefits to individuals because of the additional charges.

Keywords: Pension; Unemployment; Union; Right-to-manage model (search for similar items in EconPapers)
JEL-codes: H55 J51 J64 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2009-02
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:0908

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