EconPapers    
Economics at your fingertips  
 

Political economy of pension reforms: an empirical investigation

Miroslav Verbič () and Rok Spruk

European Journal of Law and Economics, 2019, vol. 47, issue 2, No 2, 232 pages

Abstract: Abstract We examine effects of political institutions on the probability of introducing pension reforms. A novel dataset is constructed that tracks the systematic development of pension legislation in 36 countries for the period 1970–2013 by focusing on mandatory pay-as-you-go, occupational, and supplementary pension reforms. The evidence highlights the fundamental importance of political institutions in shaping the probability of pension reforms, after controlling for potentially confounding effects of demographic structure, preferences for redistribution and macroeconomic fundamentals. Countries with stronger constraints on the chief executive, non-fractionalized political competition with moderate political power of government and opposition parties with centrist parties in power, and fiscal federalism in the presence of electoral rules with vote sharing thresholds and a high degree of regional autonomy are significantly more likely to introduce pension reforms. The beneficial effects of executive constraints, political competition and inter-jurisdictional federalism on reforms are robust to several misspecification checks, unobserved heterogeneity, and country-specific time trends. We show that when pension reforms occur, some layers of political institutions strengthen public and private pensions relative to GDP while others tend to weaken it.

Keywords: Pension reform; Political economy; Applied econometrics (search for similar items in EconPapers)
JEL-codes: C20 H30 H55 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10657-018-9606-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:kap:ejlwec:v:47:y:2019:i:2:d:10.1007_s10657-018-9606-7

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10657

Access Statistics for this article

European Journal of Law and Economics is currently edited by Jürgen Georg Backhaus, Giovanni B. Ramello and Alain Marciano

More articles in European Journal of Law and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-10-09
Handle: RePEc:kap:ejlwec:v:47:y:2019:i:2:d:10.1007_s10657-018-9606-7