A Long-Term Evaluation of Recent Hungarian Pension Reforms

Christoph Freudenberg (), Tamas Berki and Adam Reiff
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Christoph Freudenberg: Institute of Public Finance Freiburg University

No 2016/2, MNB Working Papers from Magyar Nemzeti Bank (Central Bank of Hungary)

Abstract: This paper studies the effect of Hungarian pension reforms between 2009-2012 on the adequacy and long-term fiscal stability of the Hungarian public pension system. For the adequacy analysis, we use a micro simulation model to project future initial pension levels relative to future gross wages. For the analysis of fiscal stability, we use a generational accounting-based macro model to forecast future yearly cash balances and calculate implicit pension liability (IPL) indicators. We find that major recent reforms have stabilized the public pension system until around 2035, but after this, mainly due to unfavorable demographic developments, we project increasing deficits that reach about 4% of GDP by 2060.

Keywords: Pension reforms; Sustainability of pension systems; Micro simulation (search for similar items in EconPapers)
JEL-codes: H55 (search for similar items in EconPapers)
Pages: 68 pages
Date: 2016
New Economics Papers: this item is included in nep-age, nep-cmp, nep-cse, nep-eec and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:mnb:wpaper:2016/2

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