On December 12, 2019, Fed in Print will introduce its new platform for discovering content. Please direct your questions to Anna Oates
Federal Reserve Bank of Minneapolis
On Financing Retirement, Health Care, and Long-Term Care in Japan
Japan is facing the problem of how to finance retirement, health care, and long-term care expenditures as the population ages. This paper analyzes the impact of policy options intended to address this problem by employing a dynamic general equilibrium overlapping generations model, specifically parameterized to match both the macro- and microeconomic level data of Japan. We find that financing the costs of aging through gradual increases in the consumption tax rate delivers better macroeconomic performance and higher welfare for most individuals relative to other financing options, including raising social security contributions, debt financing, and a uniform increase in health care and long-term care copayments.
Cite this item
Ellen R. McGrattan & Kazuaki Miyachi & Adrian Peralta-Alva, On Financing Retirement, Health Care, and Long-Term Care in Japan, Federal Reserve Bank of Minneapolis, Staff Report 586, 07 Jun 2019.
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
Keywords: Retirement; Health care; Taxation; Aging; Japan
This item with handle RePEc:fip:fedmsr:586
is also listed on EconPapers
For corrections, contact Jannelle Ruswick ()