title: The marginal cost of public funds with an aging population.
abstract: "As populations in the United States and other advanced economies grow older, the burden of social security and health care financing is expected to rise markedly.  Payroll, income, and other taxes on working populations are projected to rise accordingly.  The marginal welfare cost to workers of social security and other public expenditures is analyzed within the context of a two-period life cycle model.  By relaxing separability assumptions that have become common in the literature, the theoretical structure properly incorporates the effect of these public expenditures on labor supply.  Comparative statics results indicate that changing age structure is likely to raise the marginal welfare to workers of social security, education, and other public expenditures. Illustrative calculations for the United States confirm this result, suggesting that the cost to workers of incremental social security benefits may easily double by 2025-2050."
authors.forename: D E
authors.initials: DE
authors.lastname: Wildasin
mesh_terms: D017677:Age Distribution; D000367:Age Factors; D000569:Americas; D003695:Delivery of Health Care; D003710:Demography; D003858:Dependency, Psychological; D019049:Developed Countries; D004467:Economics; D004651:Employment; D006262:Health; D006296:Health Services; D006280:Health Workforce; D018803:Models, Economic; D008962:Models, Theoretical; D009656:North America; D009826:Old Age Assistance; D011153:Population; D011154:Population Characteristics; D011157:Population Dynamics; D017150:Public Sector; D012106:Research; D014481:United States
keywords: Age Distribution--changes; Age Factors; Americas; Delivery Of Health Care; Demographic Aging; Demographic Factors; Dependency Burden; Developed Countries; Economic Factors; Economic Model; Health; Health Services--cost; Human Resources; Labor Force; Macroeconomic Factors; Microeconomic Factors; Models, Theoretical; North America; Northern America; Old Age Security--cost; Population; Population Characteristics; Population Dynamics; Public Sector; Research Methodology; United States