 Public debt and social security: Level of formality mattersHelder de Mendonça () and Bruno Tiberto Economic Modelling, 2014, vol. 42, issue C, 490-507 Abstract: This paper presents a contribution to the empirical literature concerning the relationship between social security and public debt in emerging economies. In particular, several economic and social shocks, as income inequality, were considered in the analysis. Based on the Brazilian data from 2004 to 2010, and taking into account the effects of shocks on variables which are essential to the public debt and the social security deficit, two sets of GMM models were considered. Furthermore, with the objective of testing the results, a GMM system model was built. The findings confirmed that the social security deficit significantly contributes to an increase in the public debt. Regarding the effects on social security, it was observed that an increase in the level of formality in the economy reduces the deficit. In contrast, a reduction in income inequality, real increase in the minimum wage, and increase in health benefits imply an increase in the social security deficit. Therefore, these variables play a crucial role in the search for an efficient social security management system and cannot be overlooked in ensuring fiscal sustainability. Keywords: Public debt; Social security; Economic and social variables; Brazilian economy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:42:y:2014:i:c:p:490-507 DOI: 10.1016/j.econmod.2014.07.030 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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