Beyond the Toledo Agreement: The Intergenerational Impact of the Spanish Pension Reform
31 Pages Posted: 8 Oct 1999
Date Written: August 1999
Abstract
The paper investigates the intergenerational impact of the Spanish public pension system after the 1997 Pension Reform Act. Using a Generational Accounting framework we find that maintaining the new legal setting could leave future generations with liabilities as high as 176 percent of base year GDP. As the recent reform measures have been insufficient to achieve sustainability of the current pension system, we also analyse the impact of alternative reform strategies. Within the current pay-as-you-go setting, a further improvement of the tax-benefit linkage in the original spirit of the Toledo Agreement is shown to yield the intergenerationally most balanced outcome, compared to an increase in retirement age or an expansion of public subsidies financed through indirect taxes. Finally, we investigate the generational impact of a move toward a partially funded pension system which could restore the intergenerational balance.
JEL Classification: E62, H55
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Aspects of Fiscal Performance in Some Transition Economies Under Fund-Supported Programs
-
Generational Accounting in General Equilibrium
By Hans Fehr and Laurence J. Kotlikoff
-
Generational Accounts, Aggregate Saving and Intergenerational Distribution
-
Government Solvency, Ponzi Finance and the Redundancy and Usefulness of Public Debt
-
Generational Accounts, Aggregate Savings, and Intergenerational Distribution
-
By Garry J. Schinasi and Mark S Lutz