by Keisuke Otsu, Keio University and University of Kent; and Katsuyuki Shibayama, University of Kent. Discussion paper KDPE 1809, July 2018.
The Japanese economy has gone through important transitions during the postwar period such as the gradual slowdown in economic growth and the steady increase in the share of people aged above 65 years old among the adult population. In this paper we construct a parsimonious neoclassical growth model to quantitatively assess the impact of population aging and various government policies on output growth in Japan over the 1975-2015 period.
We consider several interactions between government policies and population aging. First, labor income tax has been rising steadily as the social security burden of the working age population has increased. Next, population aging tends to decrease employment and increase hours worked per worker in exchange; the workweek reduction policy introduced in the late 1980s is crucial to account for the decline in hours worked per worker during this period. Finally, the composition of fiscal spending has shifted from public investment to medical expenditure as the demand for health care services has risen.
Our main findings are that:
i) the increase in the aged-population share can account for most of the decline in employment and reduced output by 8% from its potential level
ii) workweek shortening policy led to a 20% reduction in output from its potential level by reducing hours worked over the 1988-1992 period
iii) labor income tax led to an 11% reduction in output from its potential level by discouraging hours worked
iv) the shift in the composition of government spending may have caused a slowdown in productivity growth and hence a reduction in the potential output level itself
You can download the complete paper here.
A new building to house the University’s School of Economics has been ‘topped out’ by Vice-Chancellor and President Professor Karen Cox.
She was joined in the ceremony, which took place on 23 July on the roof of the new building, by Roger Forsdyke, Managing Director of project contractor Willmott Dixon.
Guests from the University and Willmott Dixon watched as the pair wrote ‘good luck’ messages on a wooden plinth to mark the traditional point when a new building reaches its maximum height.
The new L-shaped building, located at the Canterbury campus, will house the whole of the School of Economics, together with some other teaching rooms.
The new building is planned to be ready for the start of the 2019-20 academic year.
Article by Martin Herrema, Kent News Site
Larger informal insurance groups need not provide better insurance in low-income settings. That is the conclusion of a study by Bansi Malde (School of Economics), Emla Fitzsimons (UCL and IFS) and Marcos Vera-Hernandez (UCL and IFS), published in the July 2018 issue of the Economic Journal. Their research indicates that in the event of a crop loss in rural Malawi, women with a large number of brothers fare considerably worse than those with fewer brothers.
Full details of the findings of this research were highlighted in the Royal Economic Society’s Media Briefings in July 2018: http://www.res.org.uk/details/mediabrief/11079066/INFORMAL-INSURANCE-IN-POOR-COUNTRIES-Evidence-from-Malawi-of-the-downside-of-hav.html
Congratulations to Alan Carruth, Alex Klein and Charlotte Ransom from the School of Economics have been awarded Kent Union Above and Beyond awards.
Above and Beyond awards recognise tutors who have exceeded expectations and gone “above and beyond” to enhance the student experience.
Students commended Charlotte on being friendly and approachable, spending countless hours helping the Economics Society. She has also helped build an academic community within the school and has been an attentive listening ear to student feedback. Alex received the award for his excellent teaching style, which encouraged students to learn and made it enjoyable. Alan was praised for his dedication to teaching, running extra revision sessions for students before exams.
The School of Economics would like to congratulate Alan, Alex and Charlotte for their wonderful achievements.