EFFECTS OF SOCIO-ECONOMIC FACTORS ON GOVERNMENTAL TAX EXPENDITURES FOR PRIVATE PENSIONS IN SELECTED OECD COUNTRIES

With the advent of an aging society all over the world, there has been a growing policy interest in the pension system that can guarantee old-age income at some level. Many countries also encourage people to join public pensions as well as private pensions. As a result, there has been a phenomenon of substituting private pensions. This study investigates the effects of various socio-economic factors on tax benefits for private pensions at the country level. The results of this study show that lower total income replacement rate of public pension and private pension assets leads to increasing tax expenditures on private pensions. And also, higher individual tax burden and governmental social welfare expenditure causes to increase tax expenditures on private pensions. Despite differences in the type of old-age income security systems by country, it is recognized that attempts to resolve the public pensions crisis caused by socio-economic changes take the form of expanding the roles of private pensions. So, this study provides politic implications that lower benefits from public pensions lead to expanded roles of private pensions supported by the government.