Public Education, Pension and Debt Policy

Kazumasa Oguro and Masaya Yasuoka
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Kazumasa Oguro: Hosei University

No 259, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: In some OECD countries, public debt is increasing to the point that fiscal reforms should be considered. Our paper sets a government budget constraint with the deficit of primary balance and examines how such a policy affects public debt in the long run. In the model, we consider policies of three types to reduce the deficit of primary balance: decreases in pension benefits and public education investment, and an increase in income tax. A decrease in pension benefit or an increase in tax revenues can inevitably raise the capital stock per unit of effective labor. Depending on the parametric conditions, they can also reduce the public debt per unit of effective labor and the ratio of public debt to gross domestic product (GDP).

Keywords: Education Investment; Fiscal Sustainability; Pension; Public Debt (search for similar items in EconPapers)
JEL-codes: E61 H20 H63 I28 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2023-09
New Economics Papers: this item is included in nep-age and nep-pbe
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http://192.218.163.163/RePEc/pdf/kgdp259.pdf First version, 2023 (application/pdf)

Related works:
Working Paper: Public Education, Pension and Debt Policy (2015)
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