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The future of pension systems in europe: a reappraisal

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  • Boldrin, Michele
  • Dolado, Juan José
  • Jimeno, Juan F.
  • Peracchi, Franco

Abstract

In this paper we examine and ultimately challenge the traditional viewpoint on the future of current pension systems in Europe, according to which the effects of the ageing bomb will inevitably bring down our unfunded PA YG public pension systems. First, we claim that the projected dramatic increase in the pension burden in mostly due to labour market problems and the generosity of the system, rather than to demographic factors. Secondly, we conclude that a fully funded system cannot be achieved without a substantial reduction in current pension payments unless it is financed by issuing earnmarked public debt. Finally we claim that a socially efficient pension system should be a mixed one, partly funded and partly PA VG, on the basis of optimal portfolio allocation in a context of uncertain returns to both human and physical capital and on the role ofPAYG for financing the accumulation of human capital.

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  • Boldrin, Michele & Dolado, Juan José & Jimeno, Juan F. & Peracchi, Franco, 1999. "The future of pension systems in europe: a reappraisal," UC3M Working papers. Economics 6153, Universidad Carlos III de Madrid. Departamento de Economía.
  • Handle: RePEc:cte:werepe:6153
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    Cited by:

    1. Tito Boeri & Pietro Garibaldi & Espen R. Moen, 2022. "In medio stat victus: Labor Demand Effects of an Increase in the Retirement Age," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(2), pages 519-556, April.
    2. Jiménez-Martín, Sergi & Labeaga, José M. & Martínez-Granado, Maite, 1999. "Health status and retirement decisison for older european couples," UC3M Working papers. Economics 6170, Universidad Carlos III de Madrid. Departamento de Economía.
    3. Angel de la Fuente & Doménech, Rafael., 2009. "Series enlazadas de algunos agregados económicos regionales, 1955-2007. Versión 1.1," Economic Reports 03-09, FEDEA.
    4. Vincenzo Galasso, 2012. "The Political Feasibility of Postponing Retirement," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(4), pages 27-31, December.
    5. Juan F. Jimeno, "undated". "El sistema de pensiones contributivas en España: Cuestiones básicas y perspectivas en el medio plazo," Working Papers 2000-15, FEDEA.
    6. J. Ignacio Conde-Ruiz & Vincenzo Galasso, 2003. "Early Retirement," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 6(1), pages 12-36, January.
    7. D'Amato, Marcello & Galasso, Vincenzo, 2010. "Political intergenerational risk sharing," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 628-637, October.
    8. Jimeno, Juan F., 2015. "Long-lasting consequences of the European crisis," Working Paper Series 1832, European Central Bank.
    9. Bishnu, Monisankar & Wang, Min, 2017. "The political intergenerational welfare state," Journal of Economic Dynamics and Control, Elsevier, vol. 77(C), pages 93-110.
    10. Milan Vodopivec, 2004. "Income Support for the Unemployed : Issues and Options," World Bank Publications - Books, The World Bank Group, number 14922, December.
    11. Laura Mayoral & Evi Pappa, 2022. "Introduction to the special issue in honor of Juan Jose Dolado," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 13(1), pages 1-9, May.
    12. Bermejo Patón, Fernando & Febrero Paños, Eladio & Uxó González, Jorge, 2015. "La sostenibilidad del sistema español de pensiones: Una aproximación alternativa/Sustainability of the Spanish Pension System: An Alternative View," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 33, pages 783-800, Septiembr.
    13. Vincenzo Galasso, 2012. "The Political Feasibility of Postponing Retirement," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(04), pages 27-31, December.
    14. Luc Behaghel & Eve Caroli & Muriel Roger, 2014. "Age-biased Technical and Organizational Change, Training and Employment Prospects of Older Workers," Economica, London School of Economics and Political Science, vol. 81(322), pages 368-389, April.
    15. Juan Carlos Conesa & Carlos Garriga, 2001. "Sistema Fiscal y Reforma de la Seguridad Social," Working Papers in Economics 67, Universitat de Barcelona. Espai de Recerca en Economia.
    16. Juan F. Jimeno, "undated". "Demografía, empleo, salarios y pensiones," Working Papers 2002-04, FEDEA.
    17. Juan F. Jimeno, "undated". "Incentivos y desigualdad en el sistema español de pensiones contributivas de jubilación," Working Papers 2002-13, FEDEA.
    18. Clara Isabel González & J. Ignacio Conde-Ruiz & Michele Boldrin, 2008. "Immigration and Social Security in Spain," Working Papers 2008-36, FEDEA.
    19. Piekkola, Hannu & Deschryvere, Matthias, 2004. "Retirement Decisions and Option Values: Their Application Regarding Finland," Discussion Papers 951, The Research Institute of the Finnish Economy.
    20. Carlos Vidal-Meliá & Inmaculada Domínguez-Fabian, 2005. "The Spanish Pension System: Issues Of Introducing Notional Defined Contribution Accounts," Public Economics 0504006, University Library of Munich, Germany.
    21. repec:ces:ifodic:v:10:y:2012:i:4:p:19074540 is not listed on IDEAS
    22. repec:dau:papers:123456789/4094 is not listed on IDEAS
    23. Tito Boeri & Jan van Ours, 2013. "The Economics of Imperfect Labor Markets: Second Edition," Economics Books, Princeton University Press, edition 1, number 10142.
    24. Galasso, Vincenzo & D'Amato, Marcello, 2002. "Aggregate Risk, Political Constraints and Social Security Design," CEPR Discussion Papers 3330, C.E.P.R. Discussion Papers.

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