El futuro de las pensiones en España: Perspectivas y lecciones

As European population is becoming older, the financial foundations of Europe’s state-pension systems are beginning to crumble. European governments must face the unpalatable truth that their current pensions schemes are not sustainable, and provide all the required information to voters so they can take their own decisions and accept changes. The first part of the paper collects in a comprehensive way, Spanish pensions expenditure future evolution estimated by different studies. All studies agree that by 2040, Spanish government overall unfounded pensions liabilities will be well above rational levels, if nothing is done before then; but differ on the figure of the deficit. Differences in the methodology used to estimate the generosity of the system (measured as the average pension?average productivity ratio) account for this discrepancy. The second part of the paper analyses how productivity gains are transferred to the pensions and to the average pension?average productivity ratio, in particular. For this purpose, two models have been used: i) a representative agent model (Alonso and Herce (2003)) and ii) an heterogeneous agents model (Jimeno 2002b). The first model examines the effect over the generosity of the system between price indexation (or the policy recommended by the Pacto de Toledo) and wage indexation. The second model completes the analysis considering the existence of a maximum pension fixed exogenously by law.