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Title Retrospective Generational Accounts for Korea
Author Young Jun Chun (Hanyang University) and Ji Eun Song (National Assembly Futures Institute)
Volume 34 Number 2
Pages 157-185 
Keywords Retrospective Generational Accounts, Generational Equity, Fiscal Sustainability
Abstract This study addresses fiscal sustainability and generational equity of Korea by using
generational accounting (GA). Unlike previous Korean GA studies, we compute
retrospective GA, assessing the value of net taxes paid in the past combining this with
traditional forward-looking GA, appraising the rest-of-life net tax burden to obtain full
lifetime accounts (FLGA). FLGA cover the entire life for all the cohorts. We find that the
fiscal policies of Korea bring about generational inequity. The net tax burden of future
generations should be raised to an unbearable level, higher than 40% of lifetime income, to
service government spending under the current policies. In addition, we show that
parametric reforms to resolve the problem have only limited effects even under the
demographic assumptions that subsidy to childbirth and childcare and open-door
immigration policy substantially reverse population aging and reduction, which indicates
the requirement of many fundamental reforms.
File KER-20180701-34-2-03.pdf
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