Editing Pension (section)

==== Increase of employer social contribution ====
This pension reform channel increases employer social contributions by for instance 2 points. This social contribution is spent by the employer as a share of mass wages paid to each employee. The rise of the [[Direct labor cost|labour cost]] degrades the labour demand and increases the costs of production. The [[Competition (economics)|competitivity]] is degraded and results in the drop of the purchasing power. Job losses are then attended: the unemployment strongly increases. This shock is also [[inflationary]] given that household's consumption prices rise. As corporations' [[profitability]] drops, exports and companies' investment fall too. The current account drops and this shock is not [[Expansionism|expansionist]]: the GDP decreases. Finally, the public finance balance is improved but less than planned. Indeed, employer social contribution is increased but it happens to be less than expected as unemployment rises. In addition, income tax is lower than before the shock, employee social contribution increases and unemployment benefits expenses increase.<ref name=":0" />