Sustainability of the Slovenian Pension System: An Analysis with an Overlapping-generations General Equilibrium Model

Miroslav Verbič, Boris Majcen and Renger van Nieuwkoop
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Renger van Nieuwkoop: ECOPLAN Berne

GE, Growth, Math methods from University Library of Munich, Germany

Abstract: The article presents an analysis of welfare effects in Slovenia, an analysis of macroeconomic effects of the Slovenian pension reform and an analysis of effects of the pension fund deficit on sustainability of Slovenian public finances with a dynamic OLG general equilibrium model. It has been established that while young generations and new generations will lose from the pension reform, even complete implementation of the reform might not be sufficient to compensate unfavourable demographic developments. The level of expected deficit of the PAYG-financed state pension fund seems to be most worrying. Financing the pension system with VAT revenues as an extreme case could result in more sustainable public finances, since GDP and welfare levels ought to increase, yet this might be infeasible to implement politically, given that the generations of voters would have their welfare decreased. In addition, the present pension system is intransparent and tremendously complicated and should primarily be made more comprehensible to the public.

Keywords: general equilibrium models; macroeconomic effects; OLG-GE; PAYG; pension system; sustainability of public finances; Slovenia; welfare analysis (search for similar items in EconPapers)
JEL-codes: C68 D58 D61 D91 E62 H55 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2005-07-19
New Economics Papers: this item is included in nep-dge, nep-eec, nep-fmk, nep-mac and nep-pbe
Note: Type of Document - pdf; pages: 24
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Citations: View citations in EconPapers (5)

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Journal Article: Sustainability of the Slovenian Pension System: An Analysis with an Overlapping-Generations General Equilibrium Model (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpge:0507010

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