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A dynamic analysis of the effects on pensioners’ welfare of social security reforms

Published online by Cambridge University Press:  16 June 2011

PATRICIA PEINADO  and
FELIPE SERRANO
PATRICIA PEINADO
Affiliation:
University of the Basque Country (e-mail: patricia.peinado@ehu.es)
FELIPE SERRANO
Affiliation:
University of the Basque Country
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Abstract

The aim of this paper is to analyze the dynamic effects of the different parametric reforms oriented to reach the financial balance of public pension systems on the well-being of the retired population. Using the Spanish social security system as a case study, a duration analysis is implemented to look for a causal relationship and then estimate separately the effects of an effective retirement age delay and a replacement rate reduction as well as the combined effect of these two measures. We also estimate the effects of a delay on the reforms. We find that a change in the effective retirement age would have positive effects on the individual welfare of retired population, while a reduction of the replacement rate would diminish it. The combined effect of the two measures would finally translate into a welfare lost of the retired population. The delay on the reforms implies higher welfare loss (to the affected generations) than the analyzed reforms.

Keywords

H55I38J14Pensionswelfare dynamic analysissocial securitySpainreform
Type
Articles
Information
Journal of Pension Economics & Finance , Volume 11 , Issue 1 , January 2012 , pp. 71 - 87
Copyright
Copyright © Cambridge University Press 2011

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