o Time : December 08, Friday 12:00 ~ 2:00 p.m.

o Venue : 9705(The 7th floor seminar room)


PAYG pension in a small open economy


Abstract


In a recent paper (2006), Pestieu et.al. showed that the optimal payroll tax rate for the PAYG pension in an open large economy should increase as number of countries increases. This rather counter intuitive result ？increasing the factor mobility makes redistribution easier―depends on two crucial assumptions; fixed labor supply, single (payroll) tax. In this paper, the former restriction is lifted in the small open economy setting. Under this new situation, it is shown here that the standard result of trade-off between equity and increase in the capital mobility is restored.