Social Security and Retirement in Spain
81 Pages Posted: 18 Jul 2000 Last revised: 9 Oct 2022
Date Written: August 1997
Abstract
We describe the historical evolution of the Spanish Social Security system and its current organization. Our attention concentrates on the main public pension scheme for private employees in the manufacturing and service sector (RGSS) which covers by far the largest majority of Spanish workers. After describing the way in which pension and retirement decisions are regulated by this system, we try to compute the incentives to early retirement it provides to different kinds of individuals. We show that the Spanish SS legislation generates strong incentives to retire early and that Spanish workers tend to do so. In particular, our findings support the idea that pensions-induced incentives matter for the labor supply behavior of" Spanish workers. While the Spanish system does not pay a particularly generous average pension relative to GDP per-capita, its generosity' concentrates on providing large minimum pensions to individuals with below average working histories and/or low wages. At the same time, the pension system provides workers earning average or above average salaries and with complete working histories with relatively weak financial gains from not retiring after the age of 60. The combination of these features of the Spanish legislation seems to account well for the observed increase in the percentage of early retirees among Spanish pensioners during the nineties.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Political Economy of Social Security
By Georges Casamatta, Helmuth Gremer, ...
-
The Aging of the Population and the Size of the Welfare State
By Assaf Razin, Efraim Sadka, ...
-
The Aging Population and the Size of the Welfare State
By Assaf Razin, Efraim Sadka, ...
-
Social Security, Retirement, and the Single-Mindedness of the Electorate
-
Social Security, Retirement, and the Single-Mindedness of the Electorate
-
The Ageing Population and the Size of the Welfare State
By Assaf Razin, Efraim Sadka, ...