The Social Security Reform Process in Italy: Where do We Stand?
A reform process is under way in Italy. Achieving financial sustainability of the social security system has been the first objective characterizing the reforms of 1990s, but these have also introduced rules which aim at a more actuarially fair system. Indeed the social security system prevailing in Italy, financed on a PAYG basis, was, at the end of the 1980s, clearly unsustainable and also extremely unfair to some group of workers, enacting a form of perverse redistribution which is typical of “final salary” defined benefit systems. It was also a system characterized by strong incentives to retire early. In this paper we briefly describe the different regimes of the Italian pension system in its recent history and focus on some aspects of the reform process taking place during the 1990s. Since economists and policy makers are still struggling to assess the results and the long-term effects of these reforms we provide both a survey of this debate and some fresh evidence on the evaluation of the policy changes. We carry out this analysis with a particular emphasis on two aspects which are relevant in the debate. On the one hand we stress the role of economic incentives and the overall fiscal implications of changing the systems as well as these incentives. On the other hand we emphasize the intergenerational considerations and the political implications of the ageing process of the Italian population. From our description it emerges that the overall design of the Italian reform is probably a good one, and yet some more steps need to be taken to speed up some of the positive effects of the reform process that, due the adverse demographic trends affecting PAYG systems as well as the political arena, could easily evaporate.
|Date of creation:||Jul 2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (734) 615-0422
Fax: (734) 647-4575
Web page: http://www.mrrc.isr.umich.edu/publications/papers/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martin Feldstein & Jeffrey B. Liebman, 2001.
NBER Working Papers
8451, National Bureau of Economic Research, Inc.
- Vincenzo Galasso & Paola Profeta, 2003.
"Lessons for an Aging Society: The Political Sustainability of Social Security Systems,"
244, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Vincenzo Galasso & Paola Profeta, 2004. "Lessons for an ageing society: the political sustainability of social security systems," Economic Policy, CEPR;CES;MSH, vol. 19(38), pages 63-115, 04.
- GALASSO, Vincenzo & PROFETA, Paola, 2003. "Lessons for an aging society: the political sustainability of social security systems," CORE Discussion Papers 2003077, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Vincenzo Galasso & Paola Profeta, 2004. "Lessons for an Aging Society: The Political Sustainability of Social Security Systems," Working Papers, Center for Retirement Research at Boston College wp2004-7, Center for Retirement Research.
- Disney, Richard, 1999. "Notional accounts as a pension reform strategy : an evaluation," Social Protection Discussion Papers 21302, The World Bank.
- Marcello D’Amato & Vincenzo Galasso, 2002.
"Assessing the Political Sustainability of Parametric Social Security Reforms: the Case of Italy,"
Giornale degli Economisti,
GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 61(2), pages 171-213, December.
- D'Amato, Marcello & Galasso, Vincenzo, 2002. "Assessing the Political Sustainability of Parametric Social Security Reforms: The Case of Italy," CEPR Discussion Papers 3439, C.E.P.R. Discussion Papers.
- Courtney Coile & Jonathan Gruber, 2000. "Social Security and Retirement," NBER Working Papers 7830, National Bureau of Economic Research, Inc.
- Diamond, Peter A., 2002.
"Social Security Reform,"
Oxford University Press, number 9780199247899, March.
- Daniele Franco, 2002. "Italy: A Never-Ending Pension Reform," NBER Chapters, in: Social Security Pension Reform in Europe, pages 211-262 National Bureau of Economic Research, Inc.
- A. Javier Hamann, 1997. "The Reform of the Pension System in Italy," IMF Working Papers 97/18, International Monetary Fund.
- Disney, Richard, 2000. "Crises in Public Pension Programmes in OECD: What Are the Reform Options?," Economic Journal, Royal Economic Society, vol. 110(461), pages F1-23, February.
- Castellino Onorato & Fornero Elsa, 1997. "Privatizzare la previdenza sociale? Condizioni, modalità e limiti," Politica economica - Journal of Economic Policy (PEJEP), Società editrice il Mulino, issue 1, pages 3-26.
- Agar Brugiavini, 1999.
"Social Security and Retirement in Italy,"
in: Social Security and Retirement around the World, pages 181-237
National Bureau of Economic Research, Inc.
- Nicola Sartor & Laurence J. Kotlikoff & Willi Leibfritz, 1999. "Generational Accounts for Italy," NBER Chapters, in: Generational Accounting around the World, pages 299-324 National Bureau of Economic Research, Inc.
- Sheetal K. Chand & Albert Jaeger, 1996. "Aging Populations and Public Pension Schemes," IMF Occasional Papers 147, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:mrr:papers:wp052. 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: (MRRC Administrator)
If references are entirely missing, you can add them using this form.