Generational Accounting in Korea

55 Pages Posted: 21 Sep 2003

See all articles by Alan J. Auerbach

Alan J. Auerbach

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Young-Jun Chun

Incheon National University - Department of Economics

Date Written: September 2003

Abstract

This paper reassesses the long-term fiscal position of Korea using Generational Accounting, modified to reflect the special features of the Korean fiscal situation, such as prospective changes in public pension benefit profiles and social welfare expenditures due to the maturing of public pensions, increasing demand for social welfare expenditures, and population aging. Our findings suggest that unless policy toward existing generations is substantially altered, future generations will face an excessively heavy fiscal burden. For reasonable growth and interest rate assumptions, the difference between 2000 newborns and those born after 2000 ranges from 60% to 120%. We also find that a substantial part of the fiscal burden on the future generations is explained by the long-run budgetary imbalance of public pensions and Medical Insurance.

Suggested Citation

Auerbach, Alan Jeffrey and Chun, Young-Jun, Generational Accounting in Korea (September 2003). NBER Working Paper No. w9983. Available at SSRN: https://ssrn.com/abstract=447270

Alan Jeffrey Auerbach (Contact Author)

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States
510-643-0711 (Phone)
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National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
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CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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Munich, DE-81679
Germany

Young-Jun Chun

Incheon National University - Department of Economics ( email )

(402-749) 177 Dowha-Dong,nam-gu
Incheon
Korea

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