The Demographic and Educational Transitions and the Sustainability of the Spanish Public Pension System

Javier Díaz-Giménez and Julián Díaz-Saavedra

MPRA Paper from University Library of Munich, Germany

Abstract: We use a calibrated overlapping generations model economy to quantify the consequences of the demographic and the educational transitions for the viability of the Spanish public pension system. The households in our model economy differ in their education and in the random market value of their time, they understand the link between payroll taxes and public pensions, and they choose when to retire from the labor force. We find that the demographic transition makes the public pension system in our model economy unsustainable. The pension system starts running a deficit in the year 2016, the pension fund is depleted in the year 2029, and the accumulated pension deficits reach a shocking 277 percent of the model economy output by the year 2060.

Keywords: Computable general equilibrium; Social Security (search for similar items in EconPapers)
JEL-codes: C68 H55 (search for similar items in EconPapers)
Date: 2006-07-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in Moneda y Crédito 222.222(2006): pp. 223-270

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/69287/1/MPRA_paper_69287.pdf original version (application/pdf)

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:pra:mprapa:69287

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().