Fiscal Implications of Pension Reforms in Italy

Agar Brugiavini and Franco Peracchi

No 2008_30, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: In this paper, we contribute to the current debate on the Italian pension system by analyzing the impact of social security reforms, in terms of both budgetary implications and distributional effects. This is done by simulating the effects of three hypothetical reforms, plus the effects of the 1995- reform of the Italian pension system (the so-called Dini reform). Our approach relies on the use of a semi-structural econometric model to predict retirement probabilities under different policy scenarios, so as to properly take into account the behavioral effects of the reforms. On the basis of the estimated retirement model, we develop a complete accounting exercise which includes not only changes in gross future benefits due to policy changes, but also changes in social security contributions, income taxes and value added taxes. Thus, our results provide not only estimates of the workers� gains or losses, but also an exhaustive evaluation of the gains and losses for the government budget. We find that the reforms, particularly the Dini reform (once fully phased in), have a substantial impact on individuals� retirement decisions and their net social security wealth, as well as substantial gains for the government finances.

Keywords: Social security budget; early retirement; fiscal effects of pension reforms (search for similar items in EconPapers)
JEL-codes: H55 J21 J26 (search for similar items in EconPapers)
Pages: 55
Date: 2008
New Economics Papers: this item is included in nep-acc and nep-age
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.unive.it/web/fileadmin/user_upload/dip ... i_peracchi_30_08.pdf

Related works:
Chapter: Fiscal Implications of Pension Reforms in Italy (2007)
Working Paper: Fiscal Implications of Pension Reforms in Italy (2005)
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:ven:wpaper:2008_30

Access Statistics for this paper

More papers in Working Papers from Department of Economics, University of Venice "Ca' Foscari" Contact information at EDIRC.
Bibliographic data for series maintained by Sassano Sonia ().