Paper #652

Title:

Evaluating Spanish pension expenditure under alternativa reform scenario

Authors:

Sergi Jiménez-Martín and Michele Boldrin

Date:

November 2002

Abstract:

In this paper we evaluate the quantitative impact that a number of alternative reform scenarios may have on the total expenditure for public pensions in Spain. Our quantitative findings can be summarized in two sentences. For all the reforms considered, the financial impact of the mechanical effect (change in benefits) is order of magnitudes larger than the behavioral impact or change in behavior. For the two Spanish reforms, we find once again that their effect on the outstanding liability of the Spanish Social Security System is essentially negligible: neither the mechanical nor the behavioral effects amount to much for the 1997 reform, and amount to very little for the 2002 amendment.

Keywords:

Social security, reform, Spain, option value

JEL codes:

H55, J26

Area of Research:

Labour, Public, Development and Health Economics / Statistics, Econometrics and Quantitative Methods

Published in:

Social Security Programs and Retirement around the World: Fiscal Implications, Jon Gruber and D. Wise (eds), Chicago University Press for the NBER, forthcoming in 2007

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