IDEAS home Printed from https://ideas.repec.org/a/cup/jpenef/v17y2018i04p576-593_00.html
   My bibliography  Save this article

Old-age provision in transition: the case of Croatia

Author

Listed:
  • WERDING, MARTIN
  • PRIMORAC, MARKO

Abstract

Like in a number of other transition countries, the Croatian pension system comprises a traditional public pay-as-you-go scheme and a mandatory funded scheme (second pillar) that will provide increasing amounts of supplementary pensions to those entering retirement in the future. Due to the continuing economic crisis, the public scheme is currently under enormous financial strain, with a sizeable impact on central government finances. At the same time, the level of benefits deriving from the overall system is likely to become inadequately low in the long run. In this paper, we describe the existing system and project its future development under current rules. We also discuss options for further reforming the system and highlight their potential impact on pension finances, public budgets and retirement incomes, as this may provide lessons, which are of interest elsewhere.

Suggested Citation

  • Werding, Martin & Primorac, Marko, 2018. "Old-age provision in transition: the case of Croatia," Journal of Pension Economics and Finance, Cambridge University Press, vol. 17(4), pages 576-593, October.
  • Handle: RePEc:cup:jpenef:v:17:y:2018:i:04:p:576-593_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1474747217000166/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Andrew B. Abel & N. Gregory Mankiw & Lawrence H. Summers & Richard J. Zeckhauser, 1989. "Assessing Dynamic Efficiency: Theory and Evidence," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(1), pages 1-19.
    2. Volker Meier & Martin Werding, 2010. "Ageing and the welfare state: securing sustainability," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 26(4), pages 655-673, Winter.
    3. Martin Feldstein, 1995. "Would Privatizing Social Security Raise Economic Welfare?," NBER Working Papers 5281, National Bureau of Economic Research, Inc.
    4. Axel Börsch‐Supan & Alexander Ludwig & Joachim Winter, 2006. "Ageing, Pension Reform and Capital Flows: A Multi‐Country Simulation Model," Economica, London School of Economics and Political Science, vol. 73(292), pages 625-658, November.
    5. Dobronogov, Anton & Murthi, Mamta, 2005. "Administrative fees and costs of mandatory private pensions in transition economies," Journal of Pension Economics and Finance, Cambridge University Press, vol. 4(1), pages 31-55, March.
    6. Homburg, Stefan, 1990. "The Efficiency of Unfunded Pension Schemes," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 146, pages 640-647.
    7. Jonathan Gruber & David A. Wise, 2004. "Social Security Programs and Retirement around the World: Micro-Estimation," NBER Books, National Bureau of Economic Research, Inc, number grub04-1.
    8. Peter Diamond & John Geanakoplos, 2003. "Social Security Investment in Equities," American Economic Review, American Economic Association, vol. 93(4), pages 1047-1074, September.
    9. Barr, Nicholas, 2002. "Reforming pensions: myths, truths, and policy choices," LSE Research Online Documents on Economics 286, London School of Economics and Political Science, LSE Library.
    10. World Bank, 2011. "Croatia : Policy Options for Further Pension System Reform," World Bank Publications - Reports 12892, The World Bank Group.
    11. Garibaldi, Pietro & Oliveira Martins, Joaquim & van Ours, Jan (ed.), 2010. "Ageing, Health, and Productivity: The Economics of Increased Life Expectancy," OUP Catalogue, Oxford University Press, number 9780199587131.
    12. Nicholas Barr, 2002. "Reforming pensions: Myths, truths, and policy choices," International Social Security Review, John Wiley & Sons, vol. 55(2), pages 3-36.
    13. Alessandro Cigno & Martin Werding, 2007. "Children and Pensions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262033690, April.
    14. Diamond, Peter A., 2002. "Social Security Reform," OUP Catalogue, Oxford University Press, number 9780199247899.
    15. Mitchell, Olivia S. & Utkus, Stephen P. (ed.), 2004. "Pension Design and Structure: New Lessons from Behavioral Finance," OUP Catalogue, Oxford University Press, number 9780199273393.
    16. Barr, Nicholas & Diamond, Peter, 2008. "Reforming Pensions: Principles and Policy Choices," OUP Catalogue, Oxford University Press, number 9780195311303.
    17. Robert Fenge & Martin Werding, 2004. "Ageing and the tax implied in public pension schemes: simulations for selected OECD countries," Fiscal Studies, Institute for Fiscal Studies, vol. 25(2), pages 159-200, June.
    18. repec:dau:papers:123456789/7971 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Josip FRANIC, 2020. "Why workers engage in quasi-formal employment? Some lessons from Croatia," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 11, pages 94-112, December.
    2. Andersen, Torben M. & Bhattacharya, Joydeep & Gestsson, Marias H., 2021. "Pareto-improving transition to fully funded pensions under myopia," Journal of Demographic Economics, Cambridge University Press, vol. 87(2), pages 169-212, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oliver Falck & Siegfried Schönherr, 2016. "An Economic Reform Agenda for Croatia: a comprehensive economic reform package prepared for the Croatian Statehood Foundation," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 70.
    2. Martin Werding, 2016. "One Pillar Crumbling, the Others Too Short: Old-Age Provision in Germany," National Institute Economic Review, National Institute of Economic and Social Research, vol. 237(1), pages 13-21, August.
    3. Börsch-Supan, A. & Härtl, K. & Leite, D.N., 2016. "Social Security and Public Insurance," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 781-863, Elsevier.
    4. Sinn, Hans-Werner, 2005. "Europe's Demographic Deficit," Munich Reprints in Economics 934, University of Munich, Department of Economics.
    5. Volker Meier & Martin Werding, 2010. "Ageing and the welfare state: securing sustainability," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 26(4), pages 655-673, Winter.
    6. Assar Lindbeck & Mats Persson, 2003. "The Gains from Pension Reform," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 74-112, March.
    7. Geri, Milva, 2022. "Pension arrangements and economic thinking: unreal assumptions and false predictions in the case of Argentina," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    8. Gustavo DeSantis, 2014. "More with less: the Almost Ideal Pension Systems (AIPS)," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 12(1), pages 169-192.
    9. Martin Werding & Sonja Munz & Vera Gács, 2008. "Fertility and prosperity : links between demography and economic growth," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 42.
    10. Aleksander Grad & Jakub Karnowski & Andrzej Rzońca, 2022. "Jak powiązać prywatyzację i rozwój filara kapitałowego w systemie emerytalnym – propozycja," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 4, pages 484-508.
    11. Georges Casamatta & L. Batté, 2016. "The Political Economy of Population Aging," Post-Print hal-02520521, HAL.
    12. Kent Smetters, 2005. "Social Security Privatization with Elastic Labor Supply and Second-Best Taxes," Working Papers wp092, University of Michigan, Michigan Retirement Research Center.
    13. Casamatta, G. & Batté, L., 2016. "The Political Economy of Population Aging," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 381-444, Elsevier.
    14. Øystein Thøgersen, 2001. "Reforming social security: assessing the effects of alternative funding strategies," Applied Economics, Taylor & Francis Journals, vol. 33(12), pages 1531-1540.
    15. Lindbeck, Assar & Persson, Mats, 2000. "What Are the Gains from Pension Reform?," Working Paper Series 535, Research Institute of Industrial Economics.
    16. van Dalen, Hendrik Peter & Henkens, Kene, 2018. "Do people really want freedom of choice? : Assessing preferences of pension holders," Other publications TiSEM 448e8a93-9ded-401f-9da0-7, Tilburg University, School of Economics and Management.
    17. Andersen, Torben M. & Bhattacharya, Joydeep & Gestsson, Marias H., 2021. "Pareto-improving transition to fully funded pensions under myopia," Journal of Demographic Economics, Cambridge University Press, vol. 87(2), pages 169-212, June.
    18. Robert Fenge & Jakob Weizsäcker, 2001. "Compulsory Savings: Efficiency and Redistribution On the Interaction of Means Tested Basic Income and Public Pensions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(4), pages 637-652, August.
    19. Schoonbroodt, Alice & Tertilt, Michèle, 2014. "Property rights and efficiency in OLG models with endogenous fertility," Journal of Economic Theory, Elsevier, vol. 150(C), pages 551-582.
    20. T. Buyse & F. Heylen & R. Van De Kerckhove, 2011. "Pension reform, employment by age, and long-run growth in OECD countries," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/719, Ghent University, Faculty of Economics and Business Administration.

    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jpenef:v:17:y:2018:i:04:p:576-593_00. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/pef .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.