The Effect of Latvian Pension Reform on Savings and Government Budget

Konstantins Benkovskis

Baltic Journal of Economics, 2006, vol. 6, issue 1, 3-21

Abstract: This paper deals with pension reform’s effect on Latvian savings. We are studying the reaction of total savings and their components on change in the fully funded pillar’s share in the total pension system and on increase of the retirement age using overlapping generations model with many generations. The paper describes both the long-term and the short-term theoretical consequences of the changes in pension legislation. Finally, we evaluate the effect of Latvian pension reform on private savings, fully funded savings and government budget balance over the next 10 years. Model’s simulations show that the increase of the retirement age improves budget balance and total savings, while the introduction of the fully funded pensions redistributes the tax payments from the social budget to fully funded savings.

Keywords: Pension reform; overlapping generations model; savings (search for similar items in EconPapers)
JEL-codes: D91 E21 H55 (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://biceps.org/wp-content/uploads/2023/03/spring_summer_2006.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bic:journl:v:6:y:2006:i:1:p:3-21

Access Statistics for this article

More articles in Baltic Journal of Economics from Baltic International Centre for Economic Policy Studies Contact information at EDIRC.
Bibliographic data for series maintained by Anna Zasova ().