What Will Retirement Pensions Be Like? Analysis of Spanish Future Pensioner Households in Terms of Poverty

Blanca Urbano, Antonio Jurado and Beatriz Rosado-Cebrián
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Blanca Urbano: Faculty of Business, Finance and Tourism, University of Extremadura, 10003 Cáceres, Spain
Antonio Jurado: Department of Economics, School of Technology, University of Extremadura, 10003 Cáceres, Spain
Beatriz Rosado-Cebrián: Department of Financial Economy and Accountancy, School of Technology, University of Extremadura, 10003 Cáceres, Spain

Sustainability, 2021, vol. 13, issue 4, 1-14

Abstract: The Spanish public retirement pension system, the same as that of many European countries, faces two important risks in the long term. On the one hand, the sustainability of the current pay-as-you-go system and, on the other hand, the ability to maintain an acceptable standard of living for the retired population. This paper presents a study on the current situation of the Spanish public retirement pension system and its effect on the future retired population. In recent years, the concern for the long-term sustainability of the system, which is based on pay-as-you-go and defined benefit, has been very present. For this reason, two major reforms were carried out in 2011 and 2013; however, different investigations have indicated the reduction in future retirement pensions as a possible consequence. Regarding this dilemma, this paper aims to study the future poverty risk of the retired population due to the current formulation of the system, by conducting, for this purpose, an analysis of the purchasing power of future pensioners based on the EU-Statistics on Income and Living Conditions (SILC) 2016 of the National Institute of Statistics of Spain. As a result, a future reduction in the replacement rate was observed, affecting the younger population to a greater extent, as well as an increase in poverty in pensioner households using two different scenarios.

Keywords: pay-as-you-go; reforms; poverty; retirement pension; European Union Statistics on Income and Living Conditions (EU-SILC) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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