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Retrospective Generational Accounts for Korea

Title
Retrospective Generational Accounts for Korea
Author
전영준
Keywords
Retrospective Generational Accounts; Generational Equity; Fiscal Sustainability
Issue Date
2018-07
Publisher
KOREAN ECONOMIC ASSOCIATION
Citation
KOREAN ECONOMIC REVIEW, v. 34, no. 2, page. 157-185
Abstract
This study addresses fiscal sustainability and generational equity of Korea by using generational accounting (GA). Unlike previous Korean GA studies, we compute retrospective GA, assessing the value of net taxes paid in the past combining this with traditional forward-looking GA, appraising the rest-of-life net tax burden to obtain full lifetime accounts (FLGA). FLGA cover the entire life for all the cohorts. We find that the fiscal policies of Korea bring about generational inequity. The net tax burden of future generations should be raised to an unbearable level, higher than 40% of lifetime income, to service government spending under the current policies. In addition, we show that parametric reforms to resolve the problem have only limited effects even under the demographic assumptions that subsidy to childbirth and childcare and open-door immigration policy substantially reverse population aging and reduction, which indicates the requirement of many fundamental reforms.
URI
https://repository.hanyang.ac.kr/handle/20.500.11754/119522https://www.kci.go.kr/kciportal/ci/sereArticleSearch/ciSereArtiView.kci?sereArticleSearchBean.artiId=ART002360791
ISSN
0254-3737
Appears in Collections:
COLLEGE OF ECONOMICS AND FINANCE[S](경제금융대학) > ECONOMICS & FINANCE(경제금융학부) > Articles
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