Sustainability of the Slovenian Pension System: An Analysis with an Overlapping-generations General Equilibrium Model
AbstractThe article presents an analysis of welfare effects in Slovenia, an analysis of macroeconomic effects of the Slovenian pension reform and an analysis of effects of the pension fund deficit on sustainability of Slovenian public finances with a dynamic OLG general equilibrium model. It has been established that while young generations and new generations will lose from the pension reform, even complete implementation of the reform might not be sufficient to compensate unfavourable demographic developments. The level of expected deficit of the PAYG-financed state pension fund seems to be most worrying. Financing the pension system with VAT revenues as an extreme case could result in more sustainable public finances, since GDP and welfare levels ought to increase, yet this might be infeasible to implement politically, given that the generations of voters would have their welfare decreased. In addition, the present pension system is intransparent and tremendously complicated and should primarily be made more comprehensible to the public.
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Bibliographic InfoPaper provided by EconWPA in its series GE, Growth, Math methods with number 0507010.
Length: 24 pages
Date of creation: 19 Jul 2005
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general equilibrium models; macroeconomic effects; OLG-GE; PAYG; pension system; sustainability of public finances; Slovenia; welfare analysis;
Other versions of this item:
- Miroslav VerbiÃ„Â & Boris Majcen & Renger Van Nieuwkoop, 2006. "Sustainability of the Slovenian Pension System: An Analysis with an Overlapping-Generations General Equilibrium Model," Eastern European Economics, M.E. Sharpe, Inc., M.E. Sharpe, Inc., vol. 44(4), pages 60-81, August.
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-07-25 (All new papers)
- NEP-DGE-2005-07-25 (Dynamic General Equilibrium)
- NEP-EEC-2005-07-25 (European Economics)
- NEP-FMK-2005-07-25 (Financial Markets)
- NEP-MAC-2005-07-25 (Macroeconomics)
- NEP-PBE-2005-07-25 (Public Economics)
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