Macroeconomic effects of social security in a demographic bonus context: simulating a life cycle model

Authors

DOI:

https://doi.org/10.20947/S0102-3098a0168%20%20

Keywords:

Demographic transition, Demographic shocks, Social security, Life cycle model

Abstract

This paper analyzes the impact of fiscal and social security policies in the presence of demographic bonuses in a dynamic general equilibrium model with life cycle hypothesis. Based on the theoretical framework proposed by Gertler (1999), but allowing a non-stationary demographic structure, the context of the demographic bonus was captured to infer the impact of tax and social security policy on income distribution during the demographic bonus phase. The results of the simulations indicate that the temporary increase in the share of workers in the population generates an increase in savings and a reduction in interest rates, while the behavior of the capital stock in the economy showed that the trajectory is an inverted U shape, as already suggested in the literature. In addition, it was seen that policies increasing the degree of social security contribution are tools to stimulate consumption and income redistribution in favor of retirees. The contribution of the paper is the analysis of macroeconomics implications of a demographic dividend with investment and fully microfounded consumption decisions.

Keywords: Demographic Transition. Demographic shocks. Social Security. Life cycle model.

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Author Biographies

Henrique Reichert, Universidade Federal de Santa Catarina (UFSC), Florianópolis-SC, Brasil

Henrique Reichert é doutor em economia pela Universidade Federal de Santa Catarina (UFSC). Coordenador geral de apoio às micro e pequenas empresas, na Subsecretaria de Desenvolvimento das Micro e Pequenas Empresas, Empreendedorismo e Artesanato, do Ministério da Economia.

Patricia Bonini, Universidade do Estado de Santa Catarina (Udesc), Florianópolis-SC, Brasil

Patricia Bonini é PhD em Economia pela Universidade de Birmingham, Reino Unido. Professora e pesquisadora no departamento de Ciências Econômicas da Universidade do Estado de Santa Catarina (Udesc).

Carolina Fernandes Custodio, Instituto Brasileiro de Ensino, Desenvolvimento e Pesquisa (IDP), Brasília-DF, Brasil

Carolina Fernandes Custodio é mestranda em Economia no Instituto Brasileiro de Ensino, Desenvolvimento e Pesquisa (IDP) e bacharel em Ciências Econômicas pela Universidade do Estado de Santa Catarina (Udesc). Bolsista voluntária externa no “Grupo de Estudos de Programação Aplicado à Economia” na Udesc e sócia e pesquisadora na Caravela Soluções, empresa especializada em análise de dados e estatísticas.

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Published

2021-11-05

How to Cite

Reichert, H., Bonini, P., & Fernandes Custodio, C. (2021). Macroeconomic effects of social security in a demographic bonus context: simulating a life cycle model. Brazilian Journal of Population Studies, 38, 1–30. https://doi.org/10.20947/S0102-3098a0168

Issue

Vol. 38 (2021)

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