IDEAS home Printed from https://ideas.repec.org/p/ern/wpaper/01-2013.html
   My bibliography  Save this paper

Demography, Sustainability, and Growth Notes on the future of the European "Social Market" Economy

Author

Listed:
  • Fabio Pammolli

    () (Politecnico di Milano and CERM Foundation - Competitività, Regole, Mercati)

Abstract

In most European countries, a rebalance of the excess of Pay-as-You-Go financing for pension and health expenditure is important, to reduce the current and expected future pressure on public finances. A debate should be promoted on how to achieve an optimal design, which combines PayGo and real accumulation plans. In general, a few priorities can be outlined for a new dialogue on the future of the European Social Market Economy: 1) Increase the technical quality of pension and health care expenditure projections incorporated in the annual Stability Programs of EU Partners, developing adequate sensitivity analysis around the central scenario through sound stochastic models (A stress test on fiscal sustainability of welfare systems); 2) Strengthen the link between medium-long term projections and the economic policy guidelines that EU Partners indicate at the end of the discussion session of Stability Programs; 3) Strengthen the link between the policy guidelines at European level and the annual budget of each Partner; 4) Promote a debate on the future of the European Social Market Economy, with a specific focus on the consequences of the status quo for States and individuals, as well as for economic growth and fiscal consolidation; 5) Promote a debate on how to achieve a balance between PayGo and capitalized funds to finance age related expenditures for pensions and health. Such an effort could contribute to set up a common ground to coordinate welfare systems among Member States, with positive effects on the mobility of labor and capital.

Suggested Citation

  • Fabio Pammolli, 2013. "Demography, Sustainability, and Growth Notes on the future of the European "Social Market" Economy," Working Papers CERM 01-2013, Competitività, Regole, Mercati (CERM).
  • Handle: RePEc:ern:wpaper:01-2013
    as

    Download full text from publisher

    File URL: http://www.cermlab.it/wp-content/uploads/cerm/wp/wpcerm-2013-01.pdf
    File Function: First version, 2013
    Download Restriction: no

    References listed on IDEAS

    as
    1. Feldstein, Martin, 1996. "The Missing Piece in Policy Analysis: Social Security Reform," American Economic Review, American Economic Association, vol. 86(2), pages 1-14, May.
    2. Meena Seshamani & Alastair Gray, 2004. "Ageing and health-care expenditure: the red herring argument revisited," Health Economics, John Wiley & Sons, Ltd., vol. 13(4), pages 303-314.
    3. Andrew B. Abel & N. Gregory Mankiw & Lawrence H. Summers & Richard J. Zeckhauser, 1989. "Assessing Dynamic Efficiency: Theory and Evidence," Review of Economic Studies, Oxford University Press, vol. 56(1), pages 1-19.
    4. Breyer, Friedrich & Craig, Ben, 1997. "Voting on social security: Evidence from OECD countries," European Journal of Political Economy, Elsevier, vol. 13(4), pages 705-724, December.
    5. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 73-94, Winter.
    6. Gordon, Roger H. & Varian, Hal R., 1988. "Intergenerational risk sharing," Journal of Public Economics, Elsevier, vol. 37(2), pages 185-202, November.
    7. Assar Lindbeck & Mats Persson, 2003. "The Gains from Pension Reform," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 74-112, March.
    8. Fabio Pammolli & Nicola Carmine Salerno, 2004. "Le proiezioni di lungo periodo della spesa sociale nell'UE: l'impatto demografico e il possibile impatto della tecnologia sulla spesa sanitaria," Working Papers CERM 02-2004, Competitività, Regole, Mercati (CERM).
    9. Pammolli, Fabio & Salerno, Nicola, 2011. "The Multipillar System for Health Care Financing: Thirteen Good Reasons for Open Capitalisation Funds, Covering both Pension and Health Care Provisions," MPRA Paper 36928, University Library of Munich, Germany.
    10. Broer, D Peter & Westerhout, Ed W M T & Bovenberg, A Lans, 1994. " Taxation, Pensions and Saving in a Small Open Economy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(3), pages 403-424.
    11. Cui, Jiajia & Jong, Frank De & Ponds, Eduard, 2011. "Intergenerational risk sharing within funded pension schemes," Journal of Pension Economics and Finance, Cambridge University Press, vol. 10(01), pages 1-29, January.
    12. Fabio Pammolli & Nicola Carmine Salerno, 2010. "I trend della spesa sanitaria e le ragioni del finanziamento multipillar con componente ad accumulazione reale," Working Papers CERM 06-2010, Competitività, Regole, Mercati (CERM).
    13. Salerno, Nicola Carmine & Pammolli, Fabio, 2012. "La Riforma del Welfare, il Paygo, i nuovi Ammortizzatori per il Mercato del Lavoro
      [Reform of Welfare System, Scale of functioning of PayGo, and development of modern Unemployment Benefits]
      ," MPRA Paper 38396, University Library of Munich, Germany, revised 15 Apr 2012.
    14. Andrew J. G. Cairns & David Blake & Kevin Dowd, 2006. "A Two-Factor Model for Stochastic Mortality with Parameter Uncertainty: Theory and Calibration," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 73(4), pages 687-718.
    15. Heijdra, Ben J., 2017. "Foundations of Modern Macroeconomics," OUP Catalogue, Oxford University Press, edition 3, number 9780198784135.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    health expenditure; welfare; demography; sustainability; paygo;

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I00 - Health, Education, and Welfare - - General - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ern:wpaper:01-2013. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guido Bora`). General contact details of provider: http://edirc.repec.org/data/cermmit.html .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.