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(Un)Sustainability and reform of the social security system in Brasil: A generational Accounting Approach

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  • Sanches, Fabio Miessi
  • Souza, Andre Portela

Abstract

In this paper we apply the Generational Accounting methodology for the Brazilian public sector and for the two social security systems of the country – RGPS (private sector workers system) and RPPS (civil servants system). On the whole, in the basic scenario we found an imbalance of 98%, what is equivalent to say that future generations will face a fiscal burden 98% higher than the fiscal burden faced by an individual born in the base year. The imbalance observed in the RGPS and RPPS are also higher and has important impacts over the total imbalance. Moreover, the imposition of a set of social security reforms will tend to promote the intergenerational balance when we consider all taxes and transfers. Notwithstanding, the generational imbalance in the social security systems will persist. These considerations, in turn, indicate that the Brazilian public sector will continue to collect huge amounts of wealth, consumption and property taxes in order to afford the imbalance in its social security systems.

Suggested Citation

  • Sanches, Fabio Miessi & Souza, Andre Portela, 2007. "(Un)Sustainability and reform of the social security system in Brasil: A generational Accounting Approach," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 61(3), March.
    • Handle: RePEc:fgv:epgrbe:v:61:y:2007:i:3:a:1089
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