French Public Finances: Modeling Long-Term Prospects and Reform Options

51 Pages Posted: 15 Feb 2006

See all articles by Karl Habermeier

Karl Habermeier

International Monetary Fund (IMF)

Fabrice Lenseigne

affiliation not provided to SSRN

Date Written: February 1998

Abstract

Over the coming decades, demographic developments will lead to a significant increase in public outlays on pensions and health care, relative to national income. This study extends earlier work by considering the adverse effects of taxation on the determinants of economic growth -- in particular, investment, productivity growth, and labor force participation. Available empirical evidence suggests that these adverse effects could well be sizable, and that conventional estimates of the adverse effects of population aging probably severely underestimate their impact on the public finances and economic performance. The paper uses stochastic simulations to examine the robustness of the results to changes in parameter values. It also provides quantitative simulations of various reform options, including mainly an increase in the effective retirement age and flanking labor market measures.

Keywords: Population Aging, Economic Growth, Public Finance, Pensions, Health Care, Stochastic Simulations

JEL Classification: H1, O4, J2

Suggested Citation

Habermeier, Karl and Lenseigne, Fabrice, French Public Finances: Modeling Long-Term Prospects and Reform Options (February 1998). IMF Working Paper No. 98/12, Available at SSRN: https://ssrn.com/abstract=882232

Karl Habermeier (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Fabrice Lenseigne

affiliation not provided to SSRN

No Address Available

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
35
Abstract Views
694
PlumX Metrics