Early Announcement of a Public Pension Reform in Italy
AbstractWhat is the macroeconomic impact of announcing a pension system reform in advance? The Italian reform in 1992 represents an illustrative case to address this question. Using an overlapping-generations model, we simulate the pre-announcement of five-year increase in the retirement eligibility age within 1992 Italian pension system. The simulation results show that the transition would be characterized by a drop in the employment rate of workers ages 55 and older explaining 77 percent of the actual drop. They also predict an 8 percent increase in pensions' expenditure and explain 83 percent of the actual increase. Finally, the welfare analysis highlights a loss for almost all the transitional generations.
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Bibliographic InfoArticle provided by SIPI Spa in its journal Rivista di Politica Economica.
Volume (Year): 96 (2006)
Issue (Month): 5 (September-October)
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Find related papers by JEL classification:
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
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