Study on Generational Accounting Model with the Social Security System(in Japanese)

Minoru Masujima, Manabu Shimasawa and Takaaki Murakami

ESRI Discussion paper series from Economic and Social Research Institute (ESRI)

Abstract: We have estimated each generation's lifetime benefit and burden as well as lifetime income as of 2005 by using the generational accounting model with the social security system and computed its lifetime net burden ratio (LNBR = net lifetime burden / lifetime income) As a result, the following points have been revealed; (1) LNBR of the 0-year-old generation is 24% points higher than that of the 90-year-old generation. (2) LNBR of the future generation is 35% points higher than that of the 0-year-old generation. (3) Higher productivity growth, lower interest rate and higher birthrate would decrease LNBR particularly in the future and the young generations, which would reduce the difference of LNBR between the future and the 0-year-old generations (generational imbalance). The effect of productivity gain is especially large. (4) Tax increase equivalent to 10% of consumption tax rate would eliminate the generational imbalance by raising the existing generation's burden. Postponing tax increase would raise the future generation's burden. (5) Previous pension system reforms would have been effective in reducing the generational imbalance. Introduction of the Macroeconomic Slide, in particular, would have an impact of 13% points of LNBR. (6) 13% points of the generational imbalance would remain by keeping the growth of social security benefits under the economic growth rate.

Pages: 57 pages
Date: 2009-06
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Citations: View citations in EconPapers (1)

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