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The reform of the Spanish public pension system: The sustainability factor

Author

Listed:
  • Mercedes Alda*
  • Isabel Marco**
  • Adrián Marzo***

Abstract

This paper analyzes the future impact of the implementation of the sustainability factor, introduced in the last reform of the Spanish public pension system. This factor aims to regulate the initial pension according to the evolution of life expectancy. Additionally, it examines what could have happened in case of an earlier implementation of the factor. The results show that the factor produces a progressive pension reduction if life expectancy continues to increase, and pension spending is adjusted to demographic evolution. Specifically, the initial pension could be reduced up to 23 % in 2051 if the demographic trend does not change.

Suggested Citation

  • Mercedes Alda* & Isabel Marco** & Adrián Marzo***, 2018. "The reform of the Spanish public pension system: The sustainability factor," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 10(1), pages 45-63, February.
    • Handle: RePEc:col:000443:016486
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    More about this item

    Keywords

    intergenerational equality factor; sustainability factor; publicpensions; reforms.;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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