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Tunisian Pension System Sustainability: Towards A Multidimensional Reform

Author

Listed:
  • Tahar ABDESSALEM

    (LEGI, Ecole Polytechnique de Tunisie)

  • Houyem CHEKKI CHERNI

    (LEGI, Ecole Polytechnique de Tunisie)

Abstract

Using a computable general equilibrium model with overlapping generations we found that accounting reforms of the Tunisian pension system led to a dead end. The results point to the ineffectiveness of the reforms based only on changing pension parameters to ensure sustainability of the system. The effect of such measures will be limited, even in the short term. Such restricted impact can be attributed to the massive increase of pension system deficits, indicating that the pension situation is an undeniable urgency. Therefore, a wide-range reform of the current pension system is inevitable. In the medium and long term, a structural reform should be adopted. A new and fruitful direction of reform would consist in diversifying financing sources by expanding the contribution base for pension financing beyond labor income.

Suggested Citation

  • Tahar ABDESSALEM & Houyem CHEKKI CHERNI, 2016. "Tunisian Pension System Sustainability: Towards A Multidimensional Reform," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 44, pages 165-182.
    • Handle: RePEc:tou:journl:v:44:y:2016:p:165-182
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    References listed on IDEAS

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    1. Tahar Abdessalem & Houyem Chekki Cherni, 2011. "Macroeconomic Effects of Pension Reforms in the Context of Ageing Populations: Overlapping Generations Model Simulations for Tunisia," Working Papers 603, Economic Research Forum, revised 07 Jan 2011.
    2. Martin Feldstein, 1995. "Would Privatizing Social Security Raise Economic Welfare?," NBER Working Papers 5281, National Bureau of Economic Research, Inc.
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    13. Tahar Abdessalem & Houyem Chekki Cherni, 2016. "Macroeconomic effects of pension reforms in the context of aging populations: overlapping generations model simulations for Tunisia," Middle East Development Journal, Taylor & Francis Journals, vol. 8(1), pages 84-108, January.
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    Cited by:

    1. Houyem Chekki Cherni, 2021. "Complementary Funded Pensions And Economic Growth: Theoretical And Empirical Evidence Using An Overlapping Generations Model Applied To The Case Of Tunisia," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 66(231), pages 59-98, October –.
    2. EL-HOUJJAJI, Hind & ECHAOUI, Abdellah, 2020. "Assessing the financial sustainability of parametric pension system reforms: The case of Morocco," MPRA Paper 98912, University Library of Munich, Germany.
    3. Marie Claude Kamar & Riccardo Magnani, 2022. "Population ageing and labor market frictions. An OLG model applied to Lebanon," Working Papers 3, SITES.

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    More about this item

    Keywords

    PAY-AS-YOU-GO PENSION SYSTEM; FUNDED PENSION; AGEING POPULATION; OVERLAPPING GENERATIONS;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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