Sustainability of the Slovenian Pension System: An Analysis with an Overlapping-Generations General Equilibrium Model
AbstractThis paper uses a dynamic overlapping-generations (OLG) general equilibrium model to analyze welfare effects in Slovenia, the macroeconomic effects of the Slovenian pension reform, and the effects of the pension fund deficit on the sustainability of Slovenian public finances. Although young and new generations will lose from the pension reform, even complete implementation of reforms might not sufficiently compensate for unfavorable demographic developments. The level of expected deficit for the pay-as-you-go state pension fund seems to be most worrying. Financing the pension system with value-added tax revenues, as an extreme case, could result in more sustainable public finances, because gross domestic product and welfare levels ought to increase; however, this might be infea-sible to implement politically, given that generations of voters would have their welfare decreased. In addition, the present pension system is opaque and tremendously complicated and primarily, should be made more comprehensible to the public.
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Bibliographic InfoArticle provided by M.E. Sharpe, Inc. in its journal Eastern European Economics.
Volume (Year): 44 (2006)
Issue (Month): 4 (August)
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Other versions of this item:
- Miroslav Verbic & Boris Majcen & Renger van Nieuwkoop, 2005. "Sustainability of the Slovenian Pension System: An Analysis with an Overlapping-generations General Equilibrium Model," GE, Growth, Math methods 0507010, EconWPA.
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
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