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Sustainability of the Slovenian Pension System: An Analysis with an Overlapping-generations General Equilibrium Model

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Author Info
Miroslav Verbic (Institute for Economic Research Ljubljana)
Boris Majcen (Institute for Economic Research Ljubljana)
Renger van Nieuwkoop (ECOPLAN Berne)

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Abstract

The 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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Publisher Info
Paper provided by EconWPA in its series GE, Growth, Math methods with number 0507010.

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Length: 24 pages
Date of creation: 19 Jul 2005
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Handle: RePEc:wpa:wuwpge:0507010

Note: Type of Document - pdf; pages: 24
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Related research
Keywords: general equilibrium models; macroeconomic effects; OLG-GE; PAYG; pension system; sustainability of public finances; Slovenia; welfare analysis;

Other versions of this item:

Find related papers by JEL classification:
C68 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - 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 and Growth - - - Intertemporal Consumer 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

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Andrew B. Abel, 2003. "The Effects of a Baby Boom on Stock Prices and Capital Accumulation in the Presence of Social Security," Econometrica, Econometric Society, vol. 71(2), pages 551-578, March. [Downloadable!] (restricted)
    Other versions:
  2. Rutherford, Thomas F., 1995. "Extension of GAMS for complementarity problems arising in applied economic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 19(8), pages 1299-1324, November. [Downloadable!] (restricted)
  3. Deaton, A. & Grosh, M., 1998. "Consumption," Papers 191, Princeton, Woodrow Wilson School - Development Studies.
  4. James M. Poterba, 2001. "Demographic Structure And Asset Returns," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 565-584, November. [Downloadable!] (restricted)
  5. Modigliani, Franco, 1986. "Life Cycle, Individual Thrift, and the Wealth of Nations," American Economic Review, American Economic Association, vol. 76(3), pages 297-313, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Verbic, Miroslav, 2007. "Supplementary pension insurance in Slovenia: an analysis with an overlapping-generations general equilibrium model," MPRA Paper 10352, University Library of Munich, Germany. [Downloadable!]
  2. Verbic, Miroslav, 2007. "Varying the parameters of the Slovenian pension system: an analysis with an overlapping-generations general equilibrium model," MPRA Paper 10349, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  3. Miroslav Verbic, 2005. "A Quarterly Econometric Model of the Slovenian Economy," Econometrics 0511015, EconWPA. [Downloadable!]
  4. Verbic, Miroslav, 2008. "The ageing population and the associated challenges of the Slovenian pension system," MPRA Paper 10347, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  5. Verbic, Miroslav, 2007. "Modelling the pension system in an overlapping-generations general equilibrium modelling framework," MPRA Paper 10350, University Library of Munich, Germany. [Downloadable!]
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