Social Security Reforms and Inequality among Older Workers in Spain

Cristina Bellés-Obrero (cristina.belles@ub.edu), Manuel Flores, Pilar Garcia-Gomez, Sergi Jimenez-Martin and Judit Vall-Castelló (judit.vall@ub.edu)
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Cristina Bellés-Obrero: Department of Economics, Universitat de Barcelona & IEB
Judit Vall-Castelló: Department of Economics, Universitat de Barcelona, IEB & CRES (UPF)

Working Papers from Department of Applied Economics at Universitat Autonoma of Barcelona

Abstract: This chapter studies social security reforms and trends in inequalities among older workers over the last decades in Spain. Its main goal is to analyze the redistributive impact of the various pension reforms on older income inequality. Compared to the rules in 1985, recent pension reforms have led to an average increase on Social Security Wealth of approximately 18,000€ for men and 15,000€ for women. This represents a ten and eight percent increase, respectively. This effect is mostly driven by the mechanical or direct effect (e.g. via benefit adjustments), while changes in retirement probability (secondary or behavioral effect) are close to zero. Furthermore, we find striking differences across income quartiles, for both men and women. In both cases, there is a clear income gradient, where the richest quartile has benefitted the most with an increase close to twenty percent, or over €50,000, for both men and women. Conversely, the change for the poorest income quartile for men and the two poorest income quartiles for women is close to zero or even slightly negative. This is likely due to the effect of minimum benefits (that mark the generosity of the system, see Boldrin et al, 1999) that automatically absorb any other effect for low-income individuals.

Keywords: Social Security; Inequality; pension reforms; life expectancy; Spain. (search for similar items in EconPapers)
Pages: 36 pages
Date: 2024-11
New Economics Papers: this item is included in nep-com and nep-reg
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Citations: View citations in EconPapers (1)

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Working Paper: Social Security Reforms and Inequality among Older Workers in Spain (2024)
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