 Endogenous retirement and public pension system reform in SpainUC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de EconomÃa Abstract: All around the world , developed countries have resorted to parametric reforms of their Social Security systems, in an attempt to lessen the impact of the population aging. In particular, pension formulae have been modified to reduce the generosity of the systems and to induce longer working careers. In this paper we explore the capacity of these reforms to alleviate the expected financial difficulties of current PAYG systems. This is accomplished by developing and Heterogeneous Agents, Applied General Equilibrium model where individuals can freely adjust their retirement ages in response to the incentives provided by the pension regulations. This inclusion is relevant, as parametric changes tend to significantly alter retirement incentives. We find that the calibrated model successfully reproduces the basic stylized facts of retirement behavior in Spain. In particular, it mimics the early retirement pattern of low income workers under the effects of minimum pensions. The model is then used to explore the effects of several changes in pension formula, including the reform actually implemented in 1997. The general conclusion is that parametric changes can significantly improve the financial condition of the system, but are far away from being able to fully restoring it. Date: 2001-04 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:we013503 Access Statistics for this paper More papers in UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de EconomÃa |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.