 The Crisis of Romania's Pension System: A Diagnosis, and an Analysis of the Proposed CureGeorge de Menil and Eytan Sheshinski DELTA Working Papers from DELTA (Ecole normale supérieure) Abstract: This paper describes the crisis of Romania's pension system , and analyses the reforms the government elected in 1996 is undertaking to resolve this crisis. Insolvency was principally due to demoralization of the system in the period following the collapse of Communism. Governments from 1990 to 1996 multiplied provisions for early retirement and increased benefit formulas. During the same period, the number of contributors fell by over a third, as workers migrated to the unofficial economy. The tax increases enacted to bridge the gap produced less and less revenue. In 1997, a new government made fundamental pension reform a program priority. It started by overhauling the public, pay-as-you-go system, notably by replacing an open-ended "best five of the last ten years" formula with a point system. It then further proposed the partial replacement of the public system by a mandatory, privately managed system of private accounts. The paper discusses the budgetary and economic effects of these reforms, and their relation to the development of capital markets. Keywords: CAPITAL MARKET; PENSION SCHEMES; RETIREMENT (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:del:abcdef:2000-10 Access Statistics for this paper More papers in DELTA Working Papers from DELTA (Ecole normale supérieure) Contact information at EDIRC. |
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