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Population Aging, Labor Market Frictions, and PAYG Pension

Author

Listed:
  • Takaaki Morimoto

    (Graduate School of Economics, Osaka University)

  • Yuta Nakabo

    (Graduate School of Economics, Osaka University)

  • Ken Tabata

    (School of Economics, Kwansei Gakuin University)

Abstract

Employing a two-period OLG model with labor market frictions and PAYG pension, this paper examines the effects of population aging on the unemployment rate and the per capita output of the economy. We show that in economies in which the population growth rate is already low and the size of PAYG pension is relatively large, a further decline in the population growth rate reduces the unemployment rate and increases the per capita output of the economy in the short run, but it increases the unemployment rate and reduces the per capita output of the economy in the long run.

Suggested Citation

  • Takaaki Morimoto & Yuta Nakabo & Ken Tabata, 2018. "Population Aging, Labor Market Frictions, and PAYG Pension," Discussion Paper Series 172, School of Economics, Kwansei Gakuin University, revised Jan 2018.
    • Handle: RePEc:kgu:wpaper:172
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    References listed on IDEAS

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    Cited by:

    1. Friese, Max, 2017. "The interplay between trade unions and the social security system in an aging economy," Thuenen-Series of Applied Economic Theory 148, University of Rostock, Institute of Economics.
    2. Rudra Narayan Kushwaha & Taniya Ghosh, 2023. "The Effects of population growth on patents and economic growth dynamics," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2023-05, Indira Gandhi Institute of Development Research, Mumbai, India.

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    More about this item

    Keywords

    Population aging; Labor market frictions; Unemployment; PAYG pension;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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