IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-00627727.html
   My bibliography  Save this paper

A general equilibrium evaluation of the sustainability of the new pension reforms in Italy

Author

Listed:
  • Riccardo Magnani

    (CEPII - Centre d'études prospectives et d'informations internationales - CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)

Abstract

Most European countries have recently introduced pension system reforms to face the financial problem related to population ageing. Italy is not an exception. The reforms introduced during the Nineties (Amato Reform in 1992 and Dini Reform in 1995), even if they will produce a strong reduction in pension benefits, are generally considered not sufficient to adequately face the population ageing problem. For this reason, in 2004, the Berlusconi government introduced a new reform that increases the retirement age to 60 years from January 2008 onwards, to 61 years from 2010 and to 62 from 2014. In 2007, the left-wing government replaced this reform with a softer one that fixes the minimum retirement age at 58 from 2008. Using an applied overlapping-generations general equilibrium model with endogenous growth due to human capital accumulation, we analyse the impact of the new reforms on the macroeconomic system and in particular on the long-run sustainability of the pension system. We show that the increase in the retirement age would permit to reduce pension deficits in the short and medium run, while in the long run these reforms would become completely ineffective. ©

Suggested Citation

  • Riccardo Magnani, 2011. "A general equilibrium evaluation of the sustainability of the new pension reforms in Italy," Post-Print halshs-00627727, HAL.
  • Handle: RePEc:hal:journl:halshs-00627727
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00627727
    as

    Download full text from publisher

    File URL: https://halshs.archives-ouvertes.fr/halshs-00627727/document
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bouzahzah, Mohamed & De la Croix, David & Docquier, Frederic, 2002. "Policy reforms and growth in computable OLG economies," Journal of Economic Dynamics and Control, Elsevier, vol. 26(12), pages 2093-2113, October.
    2. Kjetil Storesletten, 2000. "Sustaining Fiscal Policy through Immigration," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 300-323, April.
    3. Miles, David, 1999. "Modelling the Impact of Demographic Change upon the Economy," Economic Journal, Royal Economic Society, vol. 109(452), pages 1-36, January.
    4. Axel Börsch-Supan & Alexander Ludwig & Joachim Winter, 2006. "Ageing, Pension Reform and Capital Flows: A Multi-Country Simulation Model," Economica, London School of Economics and Political Science, vol. 73(292), pages 625-658, November.
    5. Regina T. Riphahn & Jochen Mayer, 2000. "Fertility assimilation of immigrants: Evidence from count data models," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(2), pages 241-261.
    6. Aglietta, Michel & Chateau, Jean & Fayolle, Jacky & Juillard, Michel & Le Cacheux, Jacques & Le Garrec, Gilles & Touze, Vincent, 2007. "Pension reforms in Europe: An investigation with a computable OLG world model," Economic Modelling, Elsevier, vol. 24(3), pages 481-505, May.
    7. Riccardo Magnani, 2006. "Vieillissement de la population en Italie et efficacité des réformes Amato et Dini : un modèle d'équilibre général à générations imbriquées," Recherches économiques de Louvain, De Boeck Université, vol. 72(3), pages 287-338.
    8. Chateau, Jean & Chojnicki, Xavier & Magnani, Riccardo, 2009. "Disparities in pension systems and financial flows among European countries," Journal of Pension Economics and Finance, Cambridge University Press, vol. 8(01), pages 1-33, January.
    9. 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.
    10. Fougere, Maxime & Merette, Marcel, 1999. "Population ageing and economic growth in seven OECD countries," Economic Modelling, Elsevier, vol. 16(3), pages 411-427, August.
    11. Sadahiro, Akira & Shimasawa, Manabu, 2003. "The computable overlapping generations model with an endogenous growth mechanism," Economic Modelling, Elsevier, vol. 20(1), pages 1-24, January.
    12. Robert J. Barro, 2001. "Human Capital and Growth," American Economic Review, American Economic Association, vol. 91(2), pages 12-17, May.
    13. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Ekaterina A. Klepikova, 2015. "Estimating the Relationship between Health and Employment of Russian People in Pensionable Age," HSE Working papers WP BRP 100/EC/2015, National Research University Higher School of Economics.
    2. Johannes Berger & Thomas Davoine & Philip Schuster & Ludwig Strohner, 2016. "Cross-country differences in the contribution of future migration to old-age financing," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(6), pages 1160-1184, December.

    More about this item

    Keywords

    pension reforms; applied OLG models; immigration; endogenous growth;

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

    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:hal:journl:halshs-00627727. 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: (CCSD). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.