Sosiaalietuuksien rahoituksen alueelliset kuluttajahintavaikutukset

Olavi Rantala

No 1125, Discussion Papers from The Research Institute of the Finnish Economy

Abstract: This study develops a model which can be used to evaluate the producer price effects and regional consumer price effects of alternative methods of financing social security, i.e. employers social security contributions and value added taxes. In the model system producer prices are determined by an input-output price model. National and regional consumer prices are determined by domestic producer prices, import prices and value added taxes. Simulations made by the model show e.g. that a decrease in the value added tax rate of food financed by a simultaneous increase in employers social security contributions leads to a fall in consumer price level and benefits mostly the elderly and pensioner households and the unemployed people, i.e. households with relatively large food expenditures. Regionally the largest consumer price fall takes place in Northern Finland. Consumer prices decrease least in Southern Finland.

Keywords: producer prices; regional consumer prices (search for similar items in EconPapers)
JEL-codes: D12 D57 E31 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2008
New Economics Papers: this item is included in nep-mac
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