Beyond the Toledo agreement: the intergenerational impact of the spanish pension reform

Holger Bonin (holger.bonin@ihs.ac.at), Joan Gil and Concepció Patxot

No 54, Working Papers in Economics from Universitat de Barcelona. Espai de Recerca en Economia

Abstract: The paper examines the intergenerational impact of the Spanish public pension system after the 1997 Pension Reform Act. Working within a Generational Accounting framework, we find that maintaining the new legal setting could leave future generations with liabilities as high as 176 percent of base year GDP. As the recent reform measures have been insufficient to achieve the sustainability of the current pension system, we also analyse the impact of alternative reform strategies. Within the current pay-as-you-go setting, a further improvement to tax-benefit linkage in line with the original spirit of the Toledo Agreement is shown to yield and intergenerationally more balanced outcome, than an increase in the retirement age or an expansion of public subsidies financed through indirect taxes. Finally, we examine the generational impact of a move toward a partially funded pension system which might restore the intergenerational balance.

JEL-codes: E62 H55 (search for similar items in EconPapers)
Pages: 37 pages
Date: 1999
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Citations: View citations in EconPapers (6)

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Journal Article: Beyond the Toledo agreement: the intergenerational impact of the Spanish Pension Reform (2001)
Working Paper: Beyond the Toledo agreement: The intergenerational impact of the Spanish pension reform
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