Macroeconomic Effects of Pension Reform in Russia

Author/Editor: Hauner, David
Publication Date: August 01, 2008
Electronic Access: Free Full text (PDF file size is 658KB).
Use the free Adobe Acrobat Reader to view this PDF file

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: 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.
Series: Working Paper No. 08/201
Subject(s): Russian Federation | Pensions | Economic reforms | Private savings | Tax policy | Public investment | Consumption taxes | Aging | Population | Value added tax

Author's Keyword(s): Russia | pension reform | DSGE models.
Publication Date: August 01, 2008
Format: Paper
Stock No: WPIEA2008201 Pages: 23
US$18.00 (Academic Rate:
US$18.00 )
Please address any questions about this title to