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Aging and the Financing of Social Security in Switzerland
Journal
Swiss Journal of Economics and Statistics
ISSN
0303-9692
Type
journal article
Date Issued
2011-06-02
Abstract
Demographic projections forecast a doubling of the dependency ratio until 2050 as well as an increase of 10% in population due to longer life expectancy in Switzerland. To quantify the effects on social security and public finances, we use a computational overlapping generations model with five margins of labor supply: labor market participation, hours worked, job search, retirement, and on-the-job training. Starting with a passive fiscal strategy, we find that aging might reduce per capita income by 20 percent and necessitate a long-run increase of wage taxes and social security contributions by 21 percentage points. A comprehensive reform package, including an increase in the effective retirement age to 68 years and several other measures, may limit the tax increases to 4 percentage points of value added tax and reduce the decline of per capita income to less than 6%.
Persistent link: http://EconPapers.repec.org/RePEc:ses:arsjes:2011-ii-3
Persistent link: http://EconPapers.repec.org/RePEc:ses:arsjes:2011-ii-3
Language
English
Keywords
Aging
social security
retirement
human capital
unemployment.
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Peter Lang
Publisher place
Bern
Volume
147
Number
2
Start page
181
End page
231
Pages
51
Subject(s)
Eprints ID
55806