Transitional Effects of a Pension System Change in Spain
AbstractThis paper studies the output effects, transition costs and the change in pension benefits derived from the substitution of the current unfunded pension system by a fully funded pension system financed through mandatory savings. These effects are estimated by using reduced versions of the neoclassical and endogenous growth frameworks. Because of the greater capital accumulation during the transition phase, final output increases by 23,6% (neoclassical framework); and a 24,5-31,5% (endogenous growth framework). The initial revenue loss for the government would represent a 4,8% of the GDP, raising very slowly during the transition period. Given the new growth rates, rates of return of physical capital, and financial intermediation costs, we have that the capitalization pension benefits obtained by all 30-contribution-year worker would be more than twice than those that guarantee the financial sustainability of the public pension system.
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Bibliographic InfoPaper provided by FEDEA in its series Working Papers with number 96-24.
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Other versions of this item:
- Joan Gil Trasfi & Jose Bailen, 1997. "Transitional effects of a pension system change in spain," Working Papers in Economics, Universitat de Barcelona. Espai de Recerca en Economia 18, Universitat de Barcelona. Espai de Recerca en Economia.
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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- Argimon, Isabel & Roldan, JoseMaria, 1994. "Saving, investment and international capital mobility in EC countries," European Economic Review, Elsevier, Elsevier, vol. 38(1), pages 59-67, January.
- Roman Arjona, . "Gradually Capitalizing the Spanish Retirement Pension System," Studies on the Spanish Economy, FEDEA 81, FEDEA.
- Roman Arjona, . "Optimal Social Security Taxation in Spain," Studies on the Spanish Economy, FEDEA 80, FEDEA.
- Carlos Vidal-Meliá & Inmaculada Domínguez-Fabian, 2005. "The Spanish Pension System: Issues Of Introducing Notional Defined Contribution Accounts," Public Economics, EconWPA 0504006, EconWPA.
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