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Hungarian Pension System and its Reform

Author

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  • Andras Simonovits

    () (Institute of Economics - Hungarian Academy of Sciences)

Abstract

The goal of this study is to present an insider view on the pension reforms implemented in Hungary between 1996 and 2009. Both political economy as well as institutional economics will be used as the main approaches to analyse and explain the reform process and some of its effects. The following studies provide valuable insights: Palacios and Rocha (1998), Bokros and Dethier eds. (1998), Augusztinovics (1999), Augusztinovics et al. (2002), Simonovits (1999), (2000), (2008a), Czúcz and Pintér (2002), European Commission (2006), Gál (2006), Impavido and Rocha (2006), and Guardiancich (2008). The structure of the paper is as follows: Section 1 considers the legacy of the pension system. Section 2 summarises the debate on the pension reform and the basic decisions. Section 3 outlines the implementation of the pension reform, while Section 4 discusses the implementation problems. Section 5 describes the changes since the reform, while Section 6 analyses and Section 7 evaluates the reform. An Appendix discusses the issues of contribution rates.

Suggested Citation

  • Andras Simonovits, 2009. "Hungarian Pension System and its Reform," IEHAS Discussion Papers 0908, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  • Handle: RePEc:has:discpr:0908
    as

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    References listed on IDEAS

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    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. Olivia S. Mitchell, 1999. "New Evidence on the Money's Worth of Individual Annuities," American Economic Review, American Economic Association, vol. 89(5), pages 1299-1318, December.
    3. András Simonovits, 2000. "Partial privatization of a pension system: lessons from Hungary," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(4), pages 519-529.
    4. Gal, Robert I. & Tarcali, Geza, 2003. "Pension Reform and Intergenerational Redistribution in Hungary," Economic Review, Hitotsubashi University, vol. 54(3), pages 237-247, July.
    5. Martin Neil Baily & Jacob Funk Kirkegaard, 2009. "US Pension Reform: Lessons from Other Countries," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4259.
    6. Palacios, Robert & Rocha, Roberto, 1998. "The Hungarian pension system in transition," Social Protection and Labor Policy and Technical Notes 20048, The World Bank.
    7. Andras Simonovits, 2009. "When and How to Subsidize Tax-Favored Retirement Accounts?," IEHAS Discussion Papers 0902, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    8. Gábor Orbán & Dániel Palotai, 2005. "The sustainability of the Hungarian pension system: a reassessment," MNB Occasional Papers 2005/40, Magyar Nemzeti Bank (Central Bank of Hungary).
    9. Michele Boldrin & Juan J. Dolado & Juan F. Jimeno & Franco Peracchi, 1999. "The future of pensions in Europe," Economic Policy, CEPR;CES;MSH, vol. 14(29), pages 287-320, October.
    10. 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.
    11. Andras Simonovits, 2008. "Underreported Earnings and Old-Age Pension: An Elementary Model," IEHAS Discussion Papers 0805, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    12. Smetters, Kent & Walliser, Jan, 2004. "Opting out of social security," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1295-1306, July.
    13. J. Kornai, 1996. "Postsocialist Transition: An Overall Survey," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 1.
    14. Impavido, Gregorio & Rocha, Roberto, 2006. "Competition and performance in the Hungarian second pillar," Policy Research Working Paper Series 3876, The World Bank.
    15. Szekely,Istvan & Newbery,David M. G., 2008. "Hungary: An Economy in Transition," Cambridge Books, Cambridge University Press, number 9780521057547, May.
    16. Peter A. Diamond & Peter R. Orszag, 2005. "Saving Social Security," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 11-32, Spring.
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    Cited by:

    1. Szabolcs Szikszai & Tamás Badics & Csilla Raffai & Zsolt Stenger & András Tóthmihály, 2013. "Studies in Financial Systems No 8 Hungary," FESSUD studies fstudy08, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    2. Major, Klára & Varga, Gergely, 2013. "Parametrikus nyugdíjreformok és életciklus-munkakínálat
      [Parametric pension reforms and life-cycle labour supply]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1169-1207.
    3. Miroslav Beblavý, 2011. "Why has the crisis been bad for private pensions, but good for the flat tax? The sustainability of ‘neoliberal’ reforms in the new EU member states," CEPS Papers 6313, Centre for European Policy Studies.
    4. MLADEN, Luise, 2012. "Pension Reforms In Central And Eastern European Countries And Their Outcomes," Annals of Spiru Haret University, Economic Series, Universitatea Spiru Haret, vol. 3(1), pages 59-68.

    More about this item

    Keywords

    Hungary; pension reform; social security; private pension;

    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
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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