Does Population Aging Contribute to Increased Fiscal Spending?

Purpose – With rapid population aging in Korea, changes in the population structure will result in a rise in the fiscal burden. This paper investigates the effects of population aging on fiscal spending based on Korea’s province data and country panel data from the OECD. Research design, data, and methodology - We use province-level fiscal data from Local Finance Integrated Open System and the Korean Statistical Information Service and also collect country panel data from the OECD. To investigate the relationship between population aging and fiscal expenditures, our analysis uses the fixed effects model. Results - The empirical analysis based on Korean local finance and country panel data show that population aging has a positive impact on social welfare expenditures and it also has a positive impact on spending related to children and the elderly, implying that population aging may lead to an increase in fiscal spending via an increase in social welfare expenditures and spending related to children and the elderly. Conclusion - These empirical results suggest that countries like Korea that expect to experience rapid population aging need to pay more attention to prepare for the expected increase in age-related spending in the near future.

keywords: Population Aging, Fiscal Expenditure, Social Securities

참고문헌

Bloom, D., Canning, D., & Fink, G. (2010). Implications of population ageing for economic growth. Oxford Review of Economic Policy, 26(4), 583-612.

Cai, Y., Feng, W., & Shen, K. (2018), Fiscal Implications of Population Aging and Social Sector Expenditure in China. Population and Development Review, 44, 811-831.

Futagami, K., & Nakajima, T. (2001). Population aging and economic growth. Journal of Macroeconomics, 23(1), 31-44,

Hsu, M., & Yamada, T. (2019), Population Aging, Health Care, and Fiscal Policy Reform: The Challenges for Japan. Scand. J. of Economics, 121, 547-577.

Hu, Y. (2015). Population ageing and saving rates in China, Japan and Korea: A panel granger causality analysis. Global Economic Review, 44(1), 64-73.

Imrohoroglu, S., Kitao, S., & Yamada, T. (2016). achieving fiscal balance in japan. International Economic Review, 57(1), 117-154. doi:10.1111/iere.12150

Jang, S-Y., Gu, S-H., Kim, D-S., & Ping, W. (2014). Development of an Overseas Real Estate Valuation Model Considering Changes in Population Structure. Journal of Distribution Science, 12(3), 65-73.

Kim, J., & Go, S. (2017). Impact of Railroads on Local Economies: Evidence from U.S. History. Journal of Distribution Science, 15(4), 25- 32.

Loayza, N., Schmidt-Hebbel, K., & Servén, L. (2000). What Drives Saving across the World? The Review of Economics and Statistics, 82, 165-181.

10.

OECD (2017). Government at a Glance 2017.

11.

Prettner, K. (2013). Population aging and endogenous economic growth. Journal of Population Economics, 26(2), 811-834.

12.

Ruggeri, J., & Zou, Y. (2007). The fiscal burden of rising dependency ratios. Population Research and Policy Review, 26(2), 185-201.

13.

Takáts, E. (2012). Aging and house prices. Journal of Housing Economics, 21(2), 131-141.

14.

Wang, P., & Kim, J. P. (2014). The Value of Reverse Mortgage Loans: Case Study of the Chinese Market. The Journal of Asian Finance, Economics and Business, 1, 5-13.

15.

Wang, X., Hui, E., & Sun, J. (2018). Population aging, mobility, and real estate price: Evidence from cities in china. Sustainability, 10(9), 3140.

16.

Yashiro, N. (1997). Aging of the population in Japan and its implications to the other Asian countries. Journal of Asian Economics, 8(2), 245-261.

17.

Zeng, S., Zhang, X., Wang, X., & Zeng, G. (2019). Population aging, household savings and asset prices: A study based on urban commercial housing prices. Sustainability, 11(11), 3194.

바로가기메뉴

논문 상세

Vol.9 No.4

Does Population Aging Contribute to Increased Fiscal Spending?

Abstract

참고문헌

Asian Journal of Business Environment