期刊名称:International Journal of Economics and Research
电子版ISSN:2229-6158
出版年度:2013
卷号:4
期号:1
页码:8-19
出版社:Sanben Agency
摘要:Increasing of unproductive population tends to change the dependency ratio, the ratio of unproductive population to productive population. Given the labour productivity, the fall in the labour supply will reduce output, thereby slowing down the economic growth. Hence, an unproductive population potentially reduces the future tax revenue. At the same time the government spending is likely to increase since the increase in the number of senior citizens demands more spending on the pensioners, health care and social security. Hence, the government income and spending will move to an opposite direction, which leads to fiscal imbalances. An unproductive population therefore potentially generates future fiscal difficulties that include fiscal in sustainability and fiscal weakening. This paper attempts to examine the effects of the labour change process on the fiscal performance, including tax revenue, total government revenue, government spending, and primary budget deficit in Indonesia. This study employs the system dynamics of structural equations based on the overlapping loss generation approach. The estimated model is used to predict and simulate the effects the labour change on various indicators of fiscal variables in Indonesia. The result shows that the labour change process tends to reduce the growth of tax revenue. Consequently, Indonesia potentially will faces weak fiscal performances