IMF Working Papers

French Public Finances: Modeling Long-Term Prospects and Reform Options

By Karl F Habermeier, Fabrice Lenseigne

February 1, 1998

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Karl F Habermeier, and Fabrice Lenseigne. French Public Finances: Modeling Long-Term Prospects and Reform Options, (USA: International Monetary Fund, 1998) accessed December 26, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Over the coming decades, demographic developments will lead to a significant increase in public outlays on pensions and health care, relative to national income. This study extends earlier work by considering the adverse effects of taxation on the determinants of economic growth -- in particular, investment, productivity growth, and labor force participation. Available empirical evidence suggests that these adverse effects could well be sizable, and that conventional estimates of the adverse effects of population aging probably severely underestimate their impact on the public finances and economic performance. The paper uses stochastic simulations to examine the robustness of the results to changes in parameter values. It also provides quantitative simulations of various reform options, including mainly an increase in the effective retirement age and flanking labor market measures.

Subject: Aging, Expenditure, Health care spending, Labor, Pension spending, Pensions, Population and demographics

Keywords: Aging, Economic growth, Entitlement expenditure, Expenditure policy, Expenditure ratio, Expenditure restraint, GDP, Global, Health Care, Health care spending, Indexation rule, Inflation indexation, Long-run expenditure trend, Pension spending, Pensions, Population Aging, Present value, Public Finance, Public goods, Rate of return, Real GDP, Reducing personnel outlay, Standard of living, Stochastic Simulations, Wage, WP

Publication Details

  • Pages:

    51

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1998/012

  • Stock No:

    WPIEA0121998

  • ISBN:

    9781451842876

  • ISSN:

    1018-5941

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