Generational Accounting in Korea

Alan Auerbach and Young Jun Chun

No 9983, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper reassesses the long-term fiscal position of Korea using Generational Accounting, modified to reflect the special features of the Korean fiscal situation, such as prospective changes in public pension benefit profiles and social welfare expenditures due to the maturing of public pensions, increasing demand for social welfare expenditures, and population aging. Our findings suggest that unless policy toward existing generations is substantially altered, future generations will face an excessively heavy fiscal burden. For reasonable growth and interest rate assumptions, the difference between 2000 newborns and those born after 2000 ranges from 60% to 120%. We also find that a substantial part of the fiscal burden on the future generations is explained by the long-run budgetary imbalance of public pensions and Medical Insurance.

JEL-codes: H22 H55 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe
Date: 2003-09
Note: AG PE
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Journal Article: Generational accounting in Korea (2006)
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