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Pension expenditure in Spain: a European comparison

Author

Listed:
  • Miguel Ángel Martín

    (Banco de España)

  • Roberto Ramos

    (Banco de España)

Abstract

Rationale There is significant disparity in the pension expenditure-to-GDP ratio across European countries. This article examines the size of the Spanish pension system relative to those of other EU countries and analyses the drivers behind the differences observed.Takeaways. • In 2019, pension expenditure in Spain, relative to the size of its economy, was above the EU’s simpleaverage and similar to the GDP-weighted average. • In comparison with the EU in 2019, the ageing process was less advanced in Spain and pensionscheme coverage was lower. In contrast, Spain had a lower employment rate and a higher level ofbenefits relative to the average wage. • Demographic projections suggest that pension expenditure in Spain will increase significantly. Slightlymore than 40% of this increase could be offset if Spain’s employment rate were to rise to equal that of Germany.

Suggested Citation

  • Miguel Ángel Martín & Roberto Ramos, 2023. "Pension expenditure in Spain: a European comparison," Economic Bulletin, Banco de España, issue 2023/Q1.
    • Handle: RePEc:bde:journl:y:2023:i:01:n:09
    DOI: https://doi.org/10.53479/29470
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    More about this item

    Keywords

    Pension expenditure; social protection; demographic factor; coverage ratio; employment rate; benefit ratio;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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