The Resource The effect of population aging on optimal redistributive taxes in an overlapping generations model
The effect of population aging on optimal redistributive taxes in an overlapping generations model
Resource Information
The item The effect of population aging on optimal redistributive taxes in an overlapping generations model represents a specific, individual, material embodiment of a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation.This item is available to borrow from 1 library branch.
Resource Information
The item The effect of population aging on optimal redistributive taxes in an overlapping generations model represents a specific, individual, material embodiment of a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation.
This item is available to borrow from 1 library branch.
 Summary
 The impact of population aging on the steadystate solution to an Ordover and Phelps overlapping generations optimal nonlinear income tax problem with two types of worker and quasilinearinleisure preferences is investigated. A decrease in the rate of population growth, which leads to an aging population, increases the relative price of consumption per person in retirement, which tends to decrease optimal consumption for retirees of both skill types. Nevertheless, it is also shown that the optimal marginal income tax rates are independent of the rate of population growth. In addition, the steadystate interest rate unambiguously declines when the rate of population growth declines. Resulting adjustments in production plans have an ambiguous effect on the aggregate wage rate. This article identifies factors contributing to an increase in the aggregate wage when the population ages, namely normality of consumption in retirement, complementarity between capital and labour in production, and a large capital deepening effect relative to the increase in dependency owing to demographic change. Depending on the sign of this wage effect, ambiguities may arise in the direction of change in the optimal steadystate consumption and production plans. However, when the dependency effect is sufficiently strong, it is possible to sign the direction of change in all production and consumption plans. Moreover, regardless of the direction of change in optimal consumption plans, the absolute value of the changes in consumption plans are smaller for lowskilled workers than for highskilled when utility is timeseparable and preferences exhibit decreasing absolute risk aversion. Adopting, instead, a quasilinearinconsumption specification of preferences sharpens the comparative statics of consumption allocations, but introduces ambiguity into the effect of the rate of population growth on the optimal marginal income tax rate
 Language
 eng
 Label
 The effect of population aging on optimal redistributive taxes in an overlapping generations model
 Title
 The effect of population aging on optimal redistributive taxes in an overlapping generations model
 Language
 eng
 Summary
 The impact of population aging on the steadystate solution to an Ordover and Phelps overlapping generations optimal nonlinear income tax problem with two types of worker and quasilinearinleisure preferences is investigated. A decrease in the rate of population growth, which leads to an aging population, increases the relative price of consumption per person in retirement, which tends to decrease optimal consumption for retirees of both skill types. Nevertheless, it is also shown that the optimal marginal income tax rates are independent of the rate of population growth. In addition, the steadystate interest rate unambiguously declines when the rate of population growth declines. Resulting adjustments in production plans have an ambiguous effect on the aggregate wage rate. This article identifies factors contributing to an increase in the aggregate wage when the population ages, namely normality of consumption in retirement, complementarity between capital and labour in production, and a large capital deepening effect relative to the increase in dependency owing to demographic change. Depending on the sign of this wage effect, ambiguities may arise in the direction of change in the optimal steadystate consumption and production plans. However, when the dependency effect is sufficiently strong, it is possible to sign the direction of change in all production and consumption plans. Moreover, regardless of the direction of change in optimal consumption plans, the absolute value of the changes in consumption plans are smaller for lowskilled workers than for highskilled when utility is timeseparable and preferences exhibit decreasing absolute risk aversion. Adopting, instead, a quasilinearinconsumption specification of preferences sharpens the comparative statics of consumption allocations, but introduces ambiguity into the effect of the rate of population growth on the optimal marginal income tax rate
 Citation source
 In: International tax and public finance.  Norwell.  Vol. 19 (2012), no. 6 ; p. 777799
 http://library.link/vocab/creatorName
 Brett, C
 Geographic coverage
 International
 Language note
 English
 http://library.link/vocab/subjectName

 individual income tax
 fiscal sociology
 Label
 The effect of population aging on optimal redistributive taxes in an overlapping generations model
 Label
 The effect of population aging on optimal redistributive taxes in an overlapping generations model
Embed (Experimental)
Settings
Select options that apply then copy and paste the RDF/HTML data fragment to include in your application
Embed this data in a secure (HTTPS) page:
Layout options:
Include data citation:
<div class="citation" vocab="http://schema.org/"><i class="fa faexternallinksquare fafw"></i> Data from <span resource="http://link.library.ibfd.org/portal/Theeffectofpopulationagingonoptimal/sCZA0iT08EU/" typeof="Book http://bibfra.me/vocab/lite/Item"><span property="name http://bibfra.me/vocab/lite/label"><a href="http://link.library.ibfd.org/portal/Theeffectofpopulationagingonoptimal/sCZA0iT08EU/">The effect of population aging on optimal redistributive taxes in an overlapping generations model</a></span>  <span property="potentialAction" typeOf="OrganizeAction"><span property="agent" typeof="LibrarySystem http://library.link/vocab/LibrarySystem" resource="http://link.library.ibfd.org/"><span property="name http://bibfra.me/vocab/lite/label"><a property="url" href="http://link.library.ibfd.org/">International Bureau of Fiscal Documentation</a></span></span></span></span></div>
Note: Adjust the width and height settings defined in the RDF/HTML code fragment to best match your requirements
Preview
Cite Data  Experimental
Data Citation of the Item The effect of population aging on optimal redistributive taxes in an overlapping generations model
Copy and paste the following RDF/HTML data fragment to cite this resource
<div class="citation" vocab="http://schema.org/"><i class="fa faexternallinksquare fafw"></i> Data from <span resource="http://link.library.ibfd.org/portal/Theeffectofpopulationagingonoptimal/sCZA0iT08EU/" typeof="Book http://bibfra.me/vocab/lite/Item"><span property="name http://bibfra.me/vocab/lite/label"><a href="http://link.library.ibfd.org/portal/Theeffectofpopulationagingonoptimal/sCZA0iT08EU/">The effect of population aging on optimal redistributive taxes in an overlapping generations model</a></span>  <span property="potentialAction" typeOf="OrganizeAction"><span property="agent" typeof="LibrarySystem http://library.link/vocab/LibrarySystem" resource="http://link.library.ibfd.org/"><span property="name http://bibfra.me/vocab/lite/label"><a property="url" href="http://link.library.ibfd.org/">International Bureau of Fiscal Documentation</a></span></span></span></span></div>