Over the last decade, government welfare expenditure sharply increased together with sharply increasing national burden to cope with rapidly expanding income inequality in Korea. It is generally believed that national burden increases as much as the increase in tax burden. Therefore, the recent increase in welfare expenditure has often been criticized for its overspeed with the resulting heavy fiscal burden.
Sometimes, it is quite possible that government or public welfare expenditures including public pension layouts crowd out private transfers rendered between relatives and/or friends to support living expenses, which are quite popular in developing countries where social security systems are not sufficiently established. If there exist strong crowding-out effects between private and public transfers, the overall net burden of individuals will not increase much when an increase in public welfare expenditures is financed by the tax increase since private transfers will decrease due to the crowds-out. In this case, the speed of tax increases may not be a serious problem, since total burden of individuals can increase at a moderate rate due to the decrease in private transfers. The only differences are reallocation of burdens between individuals and, also, who bears the costs of welfare transfers between government and individuals. In this sense, the political pressure or burden can be mitigated by the crowds-out between private and public transfers. (The rest omitted)
- 공적이전소득이 사적이전소득 및 소비구조에 미치는 영향(Effects of public transfers on private transfers and consumption expenditures)
- 성명재; 박기백
공적이전소득이 사적이전소득 및 소비구조에 미치는 영향(Effects of public transfers on private transfers and consumption expenditures)
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Economic System|