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What has been Wrong with the Retirement Rules in Hungary?

Author

Listed:
  • Tibor Czeglédi

    (Data Bank, Research Center for Economics and Regional Sciences, Hungarian Academy of Sciences)

  • András Simonovits

    (Institute of Economics, Research Center for Economics and Regional Sciences, Hungarian Academy of Sciences)

  • Endre Szabó

    (Data Bank, Research Center for Economics and Regional Sciences, Hungarian Academy of Sciences)

  • Melinda Tir

    (Data Bank, Research Center for Economics and Regional Sciences, Hungarian Academy of Sciences)

Abstract

A basic problem with the ever-changing Hungarian retirement rules has been that they created excessive shares of gainers and of losers. Certain workers with long (and continuous) employment could retire well below the normal retirement age (NRA) with full benefit. Other workers, with fragmented and therefore short employment had to work until reaching the ever rising NRA. A peculiar consequence of these rules is the strong negative correlation between the retirement age and the length of contribution. Moving in the direction of a fair system, like the Nonfinancial Defined Contribution system, would improve sustainability and fairness.

Suggested Citation

  • Tibor Czeglédi & András Simonovits & Endre Szabó & Melinda Tir, 2017. "What has been Wrong with the Retirement Rules in Hungary?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 67(3), pages 359-387, September.
    • Handle: RePEc:aka:aoecon:v:67:y:2017:i:3:p:359-387
    Note: We express our debt to the experts of the Central Administration of National Pension Insurance who created a very detailed dataset for the public; and to Nick Barr, Rudolf Borlói, Róbert Iván Gál, Gábor Kézdi, Ádám Reiff and the three anonymous referees for their valuable comments. András Simonovits’ research was supported by the Hungarian Research Fund (OTKA), Grant no. 108668.
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    References listed on IDEAS

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    Cited by:

    1. Andras Simonovits, 2018. "The best indexation of public pensions: the point system," CERS-IE WORKING PAPERS 1815, Institute of Economics, Centre for Economic and Regional Studies.

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    More about this item

    Keywords

    normal retirement age; early retirement; years of contributions; rights; flexible (variable) retirement;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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