Pension expenditure in Spain: a European comparison

Miguel Ángel Martín and Roberto Ramos
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Miguel Ángel Martín: Banco de España

Economic Bulletin, 2023, issue 2023/Q1, No 09

Abstract: Rationale There is significant disparity in the pension expenditure-to-GDP ratio across European countries. This article examines the size of the Spanish pension system relative to those of other EU countries and analyses the drivers behind the differences observed.Takeaways. • In 2019, pension expenditure in Spain, relative to the size of its economy, was above the EU’s simpleaverage and similar to the GDP-weighted average. • In comparison with the EU in 2019, the ageing process was less advanced in Spain and pensionscheme coverage was lower. In contrast, Spain had a lower employment rate and a higher level ofbenefits relative to the average wage. • Demographic projections suggest that pension expenditure in Spain will increase significantly. Slightlymore than 40% of this increase could be offset if Spain’s employment rate were to rise to equal that of Germany.

Keywords: Pension expenditure; social protection; demographic factor; coverage ratio; employment rate; benefit ratio (search for similar items in EconPapers)
JEL-codes: H55 J11 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:bde:journl:y:2023:i:01:n:09

DOI: 10.53479/29470

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