## Policy Challenges of Population Aging in Ireland

_IMF Working Papers, October 1, 2007_

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**Canonical URL:** [Policy Challenges of Population Aging in Ireland](https://www.imf.org/en/publications/wp/issues/2016/12/31/policy-challenges-of-population-aging-in-ireland-21420)

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## Bibliographic details
- Authors: Dora M Iakova, Dennis P Botman
- Published: October 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451868104.001

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### Overview and context
- Authors: Dora M Iakova, Dennis P Botman
- Publication date: October 1, 2007
- Series: Working Paper No. 2007/247
- Pages: 15
- DOI: https://doi.org/10.5089/9781451868104.001
- ISBN: 9781451868104
- ISSN: 1018-5941
- Subjects: Aging, Expenditure, Pension spending, Pensions, Social security contributions
- Keywords: debt, GDP, rate, social security contribution rate, spending, WP

### Key findings and projections
- 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.
- The 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.
- Simulations suggest that adopting a package of measures would be more growth-friendly than relying exclusively on raising the social security contribution rate.

### Policy analysis and recommended measures
- Measures evaluated (via simulation):
  - Increase in the retirement age
  - Broadening the tax base
  - Raising indirect taxes
  - Raising the social security contribution rate (assessed as a less growth-friendly, exclusive strategy)
- Principal policy recommendation:
  - Adopt a package of measures including an increase in the retirement age, broadening the tax base, and raising indirect taxes rather than relying exclusively on raising the social security contribution rate.

### Implications
- Fiscal strategy matters: a multi-pronged package can better accommodate demographic-driven spending pressures while being more growth-friendly than single-tool approaches focused on social security contribution rate increases.
- Without policy adjustments, long-term fiscal sustainability is at risk due to rising age-related spending and consequent public debt increases.

*IMF Working Paper: "Policy Challenges of Population Aging in Ireland", Working Paper No. 2007/247 (Dora M Iakova and Dennis P Botman), October 1, 2007.*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/policy-challenges-of-population-aging-in-ireland-21420_