Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/112747
Authors: 
Friese, Max
Year of Publication: 
2015
Series/Report no.: 
Thünen-Series of Applied Economic Theory 138 [rev.]
Abstract: 
The paper shows the effect of demographic change on per capita burden of financing a PAYG social security system in the standard OLG model with frictional labor markets. Rising longevity and decreasing fertility both induce a rise in the employment level via increased capital accumulation and job openings. Simulations of the theoretical model show that this labor market effect indirectly crowds out part of the initial demographic shock's direct impact on per capita financing burden. This holds true for the generation at the period of impact as well as for the following generations.
Subjects: 
OLG
demographic change
frictional labor market
PAYG social security
tax burden
JEL: 
E24
E62
H55
Document Type: 
Working Paper

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