Evaluating Spanish Pension Expenditure Under Alternative Reform Scenarios

57 Pages Posted: 19 Jun 2003

See all articles by Sergi Jimenez-Martin

Sergi Jimenez-Martin

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Michele Boldrin

University of Minnesota - Twin Cities - Department of Economics; Universidad Carlos III de Madrid - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: November 12, 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 Classification: H55, J26

Suggested Citation

Jimenez-Martin, Sergi and Boldrin, Michele, Evaluating Spanish Pension Expenditure Under Alternative Reform Scenarios (November 12, 2002). Available at SSRN: https://ssrn.com/abstract=394640 or http://dx.doi.org/10.2139/ssrn.394640

Sergi Jimenez-Martin (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(34) 93 542 16 67 (Phone)
(34) 93 542 17 46 (Fax)

Michele Boldrin

University of Minnesota - Twin Cities - Department of Economics ( email )

271 19th Avenue South
Minneapolis, MN 55455
United States
612-624-4551 (Phone)
612-624-0209 (Fax)

Universidad Carlos III de Madrid - Department of Economics

Calle Madrid 126
Getafe, 28903
Spain

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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