IDEAS home Printed from https://ideas.repec.org/a/cup/jpenef/v11y2012i04p500-530_00.html

Differential mortality and redistribution in the Italian notional defined contribution system

Author

Listed:
  • MAZZAFERRO, CARLO
  • MORCIANO, MARCELLO
  • SAVEGNAGO, MARCO

Abstract

In this paper, we adopt a financial measure (net present value ratio) to assess the extent of the redistribution of lifetime earnings operated by the introduction of a notional defined contribution (NDC) system in the Italian PAYGO system. Our simulations are based on a representative sample of the Italian population consisting of individuals born between 1975 and 2000. We identify three channels of redistribution: between genders (from men to women), along educational lines (from the less-well-educated to the highly educated) and between diverse lifetime-earnings quintiles (from the poor to the rich). This happens because certain groups of individuals systematically live shorter-than-average lives (men, the less well-educated and the poor), whereas others live longer-than-average lives (women, the highly educated and the rich) and, at the same time, the NDC system does not take into account such differences. Comparison between the old defined benefit system and the reformed NDC one shows that intergenerational fairness has improved sensibly but differences between gender and educational levels remained nearly the same. Sensitivity analysis and the consideration of survival pensions in our simulations confirm the general trends of our base case.

Suggested Citation

  • Mazzaferro, Carlo & Morciano, Marcello & Savegnago, Marco, 2012. "Differential mortality and redistribution in the Italian notional defined contribution system," Journal of Pension Economics and Finance, Cambridge University Press, vol. 11(4), pages 500-530, October.
    • Handle: RePEc:cup:jpenef:v:11:y:2012:i:04:p:500-530_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1474747212000091/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    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. 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).
    4. 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.
    5. 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.
    6. Fabrizio Culotta, 2021. "Life Expectancy Heterogeneity and Pension Fairness: An Italian North-South Divide," Risks, MDPI, vol. 9(3), pages 1-22, March.

    More about this item

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jpenef:v:11:y:2012:i:04:p:500-530_00. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/pef .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.