Macroeconomic Effects of Pension Reform in Russia

25 Pages Posted: 12 Sep 2008

See all articles by David Hauner

David Hauner

International Monetary Fund (IMF) - African Department

Date Written: August 2008


Putting the pension system on a sustainable footing arguably remains the biggest challenge in Russia's economic policies. The debate about the policy options was hitherto constrained by the absence of general equilibrium analysis. This paper fills this gap by simulating their macroeconomic effects in a DSGE model calibrated to Russia's economy - the first of its kind to the best of our knowledge. The results suggest that a minimum benefit level in the public system should optimally be financed through lower government consumption, while higher taxation of labor and capital should be avoided. Reducing public investment spending is superior to increasing consumption taxes unless investment generates high rates of return.

Keywords: Russian Federation, Pensions, Economic reforms, Private savings, Tax policy, Public investment, Consumption taxes, Aging, Population, Value added tax, Working Paper

Suggested Citation

Hauner, David, Macroeconomic Effects of Pension Reform in Russia (August 2008). IMF Working Papers, Vol. , pp. 1-23, 2008. Available at SSRN:

David Hauner (Contact Author)

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

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