Policy Challenges of Population Aging in Ireland

Author/Editor: Botman, Dennis P. J. ; Iakova, Dora M.
Publication Date: October 01, 2007
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: 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.
Series: Working Paper No. 07/247
Subject(s): Pension regulations | Ireland | Aging | Government expenditures | Public debt | Fiscal policy | Tax bases | Economic models

Author's Keyword(s): Aging | simulation | taxation | general equilibrium
Publication Date: October 01, 2007
Format: Paper
Stock No: WPIEA2007247 Pages: 15
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