Pension Reforms and Taxation in Estonia
AbstractEstonia completed its pension system reforms in 2002. The new 3-pillar system features a first pillar of universal state pension, a second pillar of funded supplementary pension and a third pillar of independent pension savings. The paper reviews the new pension system and the early experience. It also brings up a number of unsettled issues, in part stemming from the interplay between the pension and taxation systems. Albeit the new pension scheme has been successfully implemented, it is excessively complex and non-transparent. Certain groups could experience inadequate pension coverage. The public finances are in the short term adversely affected by lower payroll and income tax revenue. Any longer-term effects on economic performance are very uncertain and likely to stem primarily from changes in the labour supply.
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Bibliographic InfoArticle provided by Baltic International Centre for Economic Policy Studies in its journal Baltic Journal of Economics.
Volume (Year): 4 (2003)
Issue (Month): 1 (December)
Pension reform; payroll taxes; savings; incentive effects;
Find related papers by JEL classification:
- G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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- Karsten Staehr, 2008. "Estimates of employment and welfare effects of personal labour income taxation in a flat-tax country : The case of Estonia," Bank of Estonia Working Papers 2008-03, Bank of Estonia, revised 30 Oct 2008.
- Tiiu Paas & Marit Hinnosaar & Jaan Masso & Orsolya Szirko, 2004. "Social Protection Systems In The Baltic States," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 26, Faculty of Economics and Business Administration, University of Tartu (Estonia).
- Fedotenkov, I., 2012. "Pensions and ageing in a globalizing world. International spillover effects via trade and factor mobility," Open Access publications from Tilburg University urn:nbn:nl:ui:12-5590843, Tilburg University.
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