Policy Challenges of Population Aging in Ireland

17 Pages Posted: 25 Jan 2008

See all articles by Dennis P. J. Botman

Dennis P. J. Botman

International Monetary Fund (IMF) - Fiscal Affairs Department

Dora Iakova

International Monetary Fund (IMF)

Date Written: October 2007

Abstract

The projected rise in age-related government spending as a share of GDP in Ireland over the next forty years is among the highest in the euro area. In the absence of reforms, public debt will increase to unsustainable levels. This paper uses the IMF's Global Fiscal Model to compare the macroeconomic effects of different fiscal strategies to accommodate the rise in age-related spending. The simulations suggest that adopting a package of measures, including an increase in the retirement age, broadening the tax base, and raising indirect taxes, would be a more growth-friendly strategy than relying exclusively on raising the social security contribution rate.

Keywords: Working Paper, Pension regulations, Ireland, Aging, Government expenditures, Public debt, Fiscal policy, Tax bases, Economic models

Suggested Citation

Botman, Dennis P. J. and Iakova, Dora, Policy Challenges of Population Aging in Ireland (October 2007). IMF Working Paper No. 07/247, Available at SSRN: https://ssrn.com/abstract=1087162

Dennis P. J. Botman (Contact Author)

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Dora Iakova

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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