The Effect of Pension Expenditure on Fiscal Deficit: Global Evidence

• Main Authors: Jhih-Sian Pan, 潘芷嫻
• Other Authors: Yi-Chung Hsu
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/y4h5vb

碩士 === 國立臺中科技大學 === 財政稅務系租稅管理與理財規劃碩士班 === 106 === Population Aging has become a demographic trend in the world, and after the bankruptcy of Greece, countries have begun to examine the fiscal situation and have a wave of reform on pension expenditure. In Taiwan, for example, the fiscal situation of the central government has been in deficit for eight years from 2009 to 2016, and the pension expenditure has increased from more than 130 billion to 140 billion. There are few studies researching on the relationship between the pension expenditure and fiscal deficit, so the aim of this paper focuses on the effect between the pension expenditure and the fiscal deficit in 29 countries from 1999 to 2012 by using the ordinary least square method and the quantile regression method. The empirical results show that the pension expenditure has a significantly negative effect on the fiscal deficit both in the ordinary least square method and the quantile regression method, especially in the countries with higher pension expenditure. In other words, when governments want to reduce pension expenditure due to the maintenance of the country’s financial situation, it may be useful to look first at the country’s pension expenditure. If it is in the low quantile, the increase in the pension expenditure will not affect the national finances; if in the middle or high quantile, it may have other effects, which will eventually reduce the country’s fiscal deficit. Otherwise, this study also finds some effects which may make the pension expenditure and dependency ratio have a significantly negative effect on the fiscal deficit both under the ordinary least square method and the quantile regression method.