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Welfare Effects of Social Security Reforms Across Europe: The Case of France and Italy

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  • Raquel Fonseca
  • Thepthida Sopraseuth

Abstract

This paper uses a calibrated life cycle model to quantify the distributional effects of Social Security reforms. The authors focus on two countries, Italy and France, because they adopted two different strategies to cope with aging. While France marginally modified its defined benefit pension plan, Italy switched from a defined benefit pension plan to a contributive system. They find both reforms redistribute welfare unevenly: high skilled workers are the primary winners of the French reform and self employed individuals, especially unskilled workers, are the losers under the new Italian Social Security arrangement. Finally, they estimate that the French reform only finances 20% of the expected deficit. This is in sharp contrast with the Italian reform which finances the expected deficit by cutting drastically the generosity of Social Security benefits.

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File URL: http://www.rand.org/content/dam/rand/pubs/working_papers/2007/RAND_WR437.pdf
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Bibliographic Info

Paper provided by RAND Corporation Publications Department in its series Working Papers with number 437.

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Length: 44 pages
Date of creation: Oct 2006
Date of revision:
Handle: RePEc:ran:wpaper:437

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Cited by:
  1. Devis Geron, 2011. "Severance Pay or Pension Funds?," "Marco Fanno" Working Papers 0139, Dipartimento di Scienze Economiche "Marco Fanno".
  2. repec:cep:sticas:case161 is not listed on IDEAS
  3. Aaron George Grech, 2012. "Evaluating the possible impact of pension reforms on future living standards in Europe," CASE Papers /161, Centre for Analysis of Social Exclusion, LSE.
  4. Devis Geron, 2009. "Social Security Incidence under Uncertainty Assessing Italian Reforms," CESifo Working Paper Series 2812, CESifo Group Munich.

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