An Assessment of the Italian 2007 Second Pillar Reform: a simulation approach
Lorenzo Corsini (),
Pier Mario Pacini and
Luca Spataro ()
MPRA Paper from University Library of Munich, Germany
In this paper we aim at assessing the outcomes of the 2007 Italian reform of the complementary social security and to identify the determinants behind them. The reform gave relevant incentives to workers to switch from investing about 7% of their gross wages into a compulsory defned benefit scheme inside the firm (which took the form of a termination indemnity payment, the TFR scheme) to an external pension fund. We provide a theoretical framework to model workers' choice problem of switching between these pension schemes and we then perform an agent-based simulation taking into account all the details of the reform. Our simulations are able to replicate the Italian data in term of adhesion rates to complementary social security and also to identify some of the key determinants of that outcome, like the fiscal incentives, the financial literacy and the expectations on the rate of returns of pension funds.
Keywords: Agent Based Simulation; Pension Schemes; Second Pillar (search for similar items in EconPapers)
JEL-codes: C63 E27 G23 J32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age and nep-cmp
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