Endogenous retirement and public pension system reform in Spain

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dc.contributor.author Sánchez Martín, Alfonso R.
dc.date.accessioned 2006-11-09T11:06:21Z
dc.date.available 2006-11-09T11:06:21Z
dc.date.issued 2001-04
dc.identifier.issn 2340-5031
dc.identifier.uri http://hdl.handle.net/10016/249
dc.description.abstract All around the world , developed countries have resorted to parametric reforms of their Social Security systems, in an attempt to lessen the impact of the population aging. In particular, pension formulae have been modified to reduce the generosity of the systems and to induce longer working careers. In this paper we explore the capacity of these reforms to alleviate the expected financial difficulties of current PAYG systems. This is accomplished by developing and Heterogeneous Agents, Applied General Equilibrium model where individuals can freely adjust their retirement ages in response to the incentives provided by the pension regulations. This inclusion is relevant, as parametric changes tend to significantly alter retirement incentives. We find that the calibrated model successfully reproduces the basic stylized facts of retirement behavior in Spain. In particular, it mimics the early retirement pattern of low income workers under the effects of minimum pensions. The model is then used to explore the effects of several changes in pension formula, including the reform actually implemented in 1997. The general conclusion is that parametric changes can significantly improve the financial condition of the system, but are far away from being able to fully restoring it.
dc.format.extent 722512 bytes
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries UC3M Working Paper. Economics
dc.relation.ispartofseries 2001-03
dc.rights Atribución-NoComercial-SinDerivadas 3.0 España
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.title Endogenous retirement and public pension system reform in Spain
dc.type workingPaper
dc.subject.eciencia Economía
dc.rights.accessRights openAccess
dc.identifier.repec we013503
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