Editing Pension (section)

==== Increase of employee social contribution ====
This channel involves the increase of employee social contribution by for instance 2 points. This social contribution is spent by household as a share of income received by them. It turns out to be a demand shock because household's [[Disposable Income|disposable income]] decreases. Indeed, the income perceived by employees is reduced following the increase of employee social contribution. As the previous channel, the drop of purchasing power result in a diminishment of consumption and demand in general. It implies a drop in activity. However, the [[Current account (balance of payments)|current account]] is improved as imports are reduced following the cut of interior demand. In the medium term, the implications are similar to the decrease of real pensions. Employment and the price index decrease. Exports increase and the drop of investments is limited. The [[Gross domestic product|GDP]] decreases too. Finally, in the short term, the public finance balance increases but is quickly limited (but remains an increase) with the decrease of revenues from [[Value-added tax|VAT]] and [[income tax]]es and the increase of unemployment.<ref name=":0" />