Motivating people to supply more labour and save for the later stage of life

Authors: J. Babecký; K. Dybczak Publisher: Czech National Bank, Czech Republic, 2009 The Czech Republic is facing a population-ageing phenomenon, and its demographic structure is expected to change dramatically, which might have a significant impact on the Czech economy. This paper analyses the potential effects of the expected demographic changes on aggregate economic performance taking into account alternative fiscal policy setups. Furthermore, it provides a rough estimate of the amendments necessary on the revenue and expenditure sides in order to keep the current system financially balanced. Based on the running scenarios, the paper demonstrates the following expectations for the next 50 years: the aggregate employment will fall by 10% to 20% compared to the 2008 levels as labour becomes scarce, capital demand will drop... [read full story]                    

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