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Outline three economic consequences of raising the retirement age for public sector workers to 70 years - Leaving Cert Economics - Question 8 - 2018
Question 8
Outline three economic consequences of raising the retirement age for public sector workers to 70 years. Economic consequences: (i) (ii) (iii)
Worked Solution & Example Answer:Outline three economic consequences of raising the retirement age for public sector workers to 70 years - Leaving Cert Economics - Question 8 - 2018
Step 1
Economic consequence (i): Contribution to government revenue
Answer
As public sector workers continue to work until the age of 70, they will contribute to government revenue through ongoing income tax payments. This increase in tax revenue can provide greater financial resources for government programs and services.
Step 2
Economic consequence (ii): Increased demand for goods and services
Answer
With more workers earning salaries instead of depending on pensions, there will be an increased demand for goods and services. Higher disposable income can stimulate economic growth as businesses see increased sales, potentially leading to job creation.
Step 3
Economic consequence (iii): Reduction in government spending on pensions
Answer
By raising the retirement age, the government may reduce its expenditures on pension payments. This reduction in spending can free up funds that can be allocated to other essential services or projects, improving overall public service delivery.