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Differential Mortality and Redistribution in the Italian Notional Defined Contribution System

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  • Carlo Mazzaferro
  • Marco Savegnago

Abstract

In this paper we assess, through a financial measure (Net Present Value Ratio), the extent of the lifetime earning redistribution operated by the Notional Defined Contribution in a sample of individuals representative of the Italian population born from 1975 to 2000. Controlling mortality by the level of education we identify at least three channels of redistribution: among genders (from men to women), along educational lines (from low to high educated) and among income quintiles (from poor to rich). This happens because some groups systematically live less than average (men, loweducated and poor) while others live more than average (women, high educated and rich). This finding is not trivial: even if the NDC system assure long term financial sustainability, it harms the most disadvantaged groups like poor and low-educated people.

Suggested Citation

  • Carlo Mazzaferro & Marco Savegnago, 2008. "Differential Mortality and Redistribution in the Italian Notional Defined Contribution System," Center for the Analysis of Public Policies (CAPP) 0047, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    • Handle: RePEc:mod:cappmo:0047
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    Cited by:

    1. Culotta, Fabrizio & Alaimo, Leonardo Salvatore & Bravo, Jorge Miguel & di Bella, Enrico & Gandullia, Luca, 2022. "Total-employed longevity gap, pension fairness and public finance: Evidence from one of the oldest regions in EU," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).
    2. Angelo Marano & Carlo Mazzaferro & Marcello Morciano, 2012. "The strengths and failures of incentive mechanisms in notional defined contribution pension systems," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 71(1), pages 33-70, October.
    3. Morciano, Marcello & Hancock, Ruth M. & Pudney, Stephen E., 2015. "Birth-cohort trends in older-age functional disability and their relationship with socio-economic status: Evidence from a pooling of repeated cross-sectional population-based studies for the UK," Social Science & Medicine, Elsevier, vol. 136, pages 1-9.
    4. Fabrizio Culotta, 2021. "Life Expectancy Heterogeneity and Pension Fairness: An Italian North-South Divide," Risks, MDPI, vol. 9(3), pages 1-22, March.
    5. Javier Pla-Porcel & Manuel Ventura-Marco & Carlos Vidal-Meliá, 2017. "How do unisex life care annuities embedded in a pay-as-you-go retirement system affect gender redistribution?," Documentos de Trabajo del ICAE 2017-11, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    6. Anca-Stefania Jijiie & Jennifer Alonso Garcia & Séverine Arnold (-Gaille), 2019. "Mortality by socio-economic class and its impact on the retirement schemes: How to render the systems fairer?," ULB Institutional Repository 2013/300032, ULB -- Universite Libre de Bruxelles.

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    More about this item

    Keywords

    Social security; Notional Defined Contribution; Italy;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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