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Demographic Change and Fiscal Sustainability in Asia

Sang-Hyop Lee (), Jungsuk Kim () and Donghyun Park ()
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Jungsuk Kim: Sogang University

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2017, vol. 134, issue 1, 287-322

Abstract: Abstract Changes in the population age structure can have significant effects on fiscal sustainability since they can affect both government revenue and expenditure. In this paper, we project government revenue, expenditure, and fiscal balance in developing Asia up to 2050 using a simple stylized model and the National Transfer Accounts data set. Rapidly aging countries are likely to suffer a tangible deterioration of fiscal sustainability under their current tax and expenditure system. On the other hand, rapid economic growth can improve fiscal health in poorer, relatively young countries with still-growing working-age populations. Overall, our results indicate that Asia’s population aging will adversely affect its fiscal sustainability, pointing to a need for Asian countries to further examine the impact of demographic shifts on their fiscal health.

Keywords: Fiscal projection; Tax; Public spending; Fiscal balance; Population aging; Asia (search for similar items in EconPapers)
Date: 2017
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Working Paper: Demographic Change and Fiscal Sustainability in Asia (2016) Downloads
Working Paper: Demographic Change and Fiscal Sustainability in Asia (2016) Downloads
Working Paper: Demographic Change and Fiscal Sustainability in Asia (2016) Downloads
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