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Long‐Run Implications of Social Security Taxation for Growth and Fertility
Author(s) -
Zhang Jie
Publication year - 2001
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/j.2325-8012.2001.tb00365.x
Subject(s) - economics , fertility , social security , payroll , labour economics , payroll tax , consumption (sociology) , investment (military) , double taxation , monetary economics , public economics , market economy , population , social science , demography , accounting , sociology , politics , political science , law
This paper compares long‐run implications for growth and fertility of four types of taxation for social security with positive bequests. A tax rise under lump‐sum taxation enhances growth but lowers fertility, while other types of taxation do so under additional restrictions. A tax rise under consumption taxation is less likely to stimulate growth and to reduce fertility than under payroll taxation. A rise in an interest income tax raises fertility, reduces both savings and human capital investment, and hence is harmful for growth. The case with zero bequests is also discussed.