Working life and retirement pensions in Spain: The simulated impact of a parametric reform

Authors


  • This article was written with financial support (FIPROS/2006/61) of the General Social Security Secretariat of the Ministry of Labour and Social Affairs of the Government of Spain. The views presented herein should not be regarded as representing the position of the Spanish social security authorities. Any errors or omissions are the full responsibility of its authors. The authors thank the reviewers for suggestions and comments.

Rafael Muñoz de Bustillo, Department of Applied Economics, University of Salamanca, Facultad de Derecho, Campus Miguel de Unamuno, s/n. 37007 Salamanca. Spain; Email: bustillo@usal.es. Pablo de Pedraza, Department of Applied Economics, University of Salamanca, Facultad de Derecho, Campus Miguel de Unamuno, s/n. 37007 Salamanca, Spain; Email: pablodepedraza@usal.es. José Ignacio Antón, Department of Applied Economics, University of Salamanca, Facultad de Derecho, Campus Miguel de Unamuno, s/n. 37007 Salamanca, Spain; Email: janton@usal.es. Luis Alberto Rivas, Faculty of Communication, Universidad Pontificia de Salamanca, Henry Collet, 90-98. 37007 Salamanca, Spain; Email: larh@upsa.es.

Abstract

This article aims to offer an ex ante evaluation of the impact of a parametric reform of the Spanish pension system that would involve increasing the reference period used to calculate benefits, an approach proposed many times by various actors in the socio-economic field. Such gradual change may be categorized as a non-structural reform of the pension system. This contrasts with reforms of a structural nature that have been very popular in Latin America and elsewhere, involving the creation of defined contribution individual account schemes. As regards the parametric reform proposed in this article, the main findings indicate that it would have a small but negative impact on pension income for pensioners and would reduce income distribution.

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