Post-Employment Benefits In Romania And Serbia: A Comparative Impact Analysis

This study is conducted to identify and assess the economic impact of post-employment benefits such as pensions in the case of Romania and Serbia. The International Accounting Standard - IAS 19 describes employee benefits as all kind of advantages granted by companies in exchange for the work and services performed as tasks of their job. Globally, one of the most important employee benefits is represented by the pension system, its importance being extremely high within the present unfavourable demographic context shaped by low fertility rates associated with a lower life expectancy rate and an increased infant mortality rate. These aspects point out that the decreasing active population financially supports a large number of pensioners. The two main pension schemes, respectively the pay as you go pension system and the accumulating funds pension plan perform properly on a global level, these two being at the same time long term saving programs which transfer resources from young to elderly people. Our empirical analysis is performed based on developing several double-log macroeconometric models using a complex set of macroeconomic (GDP total and per capita, resource productivity), labour market (employment and unemployment rates, net earnings), education (first stage of tertiary education, programmes that are theoretically based/research preparatory or giving access to professions with high skills requirements) and pension specific (pension beneficiaries total, old age pension values) indicators, processed by fixed and random effects, respectively through OLS and GLS methods. The results highlight a significant positive impact of pension systems on overall economic activity, increasing the total and per capita GDP, as well as improving labour market stability. Thus, employees consider this type of benefit as providing a security for them on retirement, increasing productivity and reducing unemployment. Nevertheless, the results comply with the economic literature, highlighting that post-employment benefits, especially pensions, represent important incentives that could increase net earnings and improve living standards along with the educational level.