IDEAS home Printed from https://ideas.repec.org/a/cup/jpenef/v19y2020i2p163-184_2.html
   My bibliography  Save this article

The fiscal and welfare consequences of the price indexation of Spanish pensions

Author

Listed:
  • Díaz-Saavedra, Julián

Abstract

We study the fiscal and welfare consequences of three options for increasing pension generosity in Spain: (i) disability and minimum pensions are fully indexed with the Consumer Price Index (CPI); (ii) minimum and lower value pensions are fully indexed with the CPI; and (iii) returning to full price indexation of all Spanish pensions. While these reforms increase pension adequacy, the tax increases needed to finance the higher pension expenditure differ significantly. Moreover, most current cohorts prefer returning to the full price indexation of all Spanish pensions, but future cohorts prefer that only disability and minimum pensions be indexed with the CPI.

Suggested Citation

  • Díaz-Saavedra, Julián, 2020. "The fiscal and welfare consequences of the price indexation of Spanish pensions," Journal of Pension Economics and Finance, Cambridge University Press, vol. 19(2), pages 163-184, April.
    • Handle: RePEc:cup:jpenef:v:19:y:2020:i:2:p:163-184_2
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S147474721800032X/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Concepció Patxot & Meritxell Solé & Guadalupe Souto, 2017. "Should pensions be redistributive? The impact of Spanish reforms on the system’s sustainability and adequacy," Working Papers 2017-02, FEDEA.
    2. Díaz-Giménez, Javier & Díaz-Saavedra, Julián, 2017. "The future of Spanish pensions," Journal of Pension Economics and Finance, Cambridge University Press, vol. 16(2), pages 233-265, April.
    3. Michele Boldrin & José Ignacio Conde-Ruiz & Javier Díaz Giménez, 2010. "Eppur si Muove! Spain: Growing without a Model," Working Papers 2010-12, FEDEA.
    4. Richard Hinz & Robert Holzmann, 2005. "Old Age Income Support in the 21st century: An International Perspective on Pension Systems and Reform," World Bank Publications - Books, The World Bank Group, number 7336.
    5. Giuseppe Carone & Per Eckefeldt & Luigi Giamboni & Veli Laine & Stéphanie Pamies Sumner, 2016. "Pension Reforms in the EU since the Early 2000's: Achievements and Challenges Ahead," European Economy - Discussion Papers 042, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    6. De La Fuente, Angel & Doménech, Rafael, 2013. "The financial impact of Spanish pension reform: A quick estimate," Journal of Pension Economics and Finance, Cambridge University Press, vol. 12(1), pages 111-137, January.
    7. Pablo Hernández de Cos & Juan Francisco Jimeno & Roberto Ramos, 2017. "The Spanish public pension system: current situation, challenges and reform alternatives," Occasional Papers 1701, Banco de España.
    Full references (including those not matched with items on IDEAS)

    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. Sheila Rose Darmaraj & Suresh Narayanan, 2019. "The Long-Term Financial Sustainability of the Civil Service Pension Scheme in Malaysia," Asian Economic Papers, MIT Press, vol. 18(1), pages 155-178, Winter/Sp.
    2. J. Ignacio Conde-Ruiz & Clara I. González, 2016. "From Bismarck to Beveridge: the other pension reform in Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 7(4), pages 461-490, November.
    3. Sabina Hod?i? & Lucija Rogi? Duman?i? & Emira Be?i?, 2019. "Financial stability of pension system in the European Union member states," Proceedings of International Academic Conferences 9912130, International Institute of Social and Economic Sciences.
    4. Enrique Devesa & Mar Devesa & Inmaculada Dominguez-Fabián & Borja Encinas & Robert Meneu, 2020. "The Sustainability Factor: How Much Do Pension Expenditures Improve in Spain?," Risks, MDPI, vol. 8(4), pages 1-21, December.
    5. Martin Stepanek, 2017. "Pension Reforms and Adverse Demographics: The Case of the Czech Republic," Working Papers IES 2017/15, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Aug 2017.
    6. Laura Hospido & Eva Moreno-Galbis, 2015. "The Spanish productivity puzzle in the Great Recession," Working Papers 1501, Banco de España.
    7. David Robalino, 2005. "Pensions in the Middle East and North Africa: Time for Change," World Bank Publications - Books, The World Bank Group, number 7427.
    8. Johannes Hagen, 2018. "The effects of increasing the normal retirement age on health care utilization and mortality," Journal of Population Economics, Springer;European Society for Population Economics, vol. 31(1), pages 193-234, January.
    9. Calvo, Esteban & Williamson, John B., 2006. "Old-Age Pension Reform and Modernization Pathways: Lessons for China from Latin America," MPRA Paper 4872, University Library of Munich, Germany, revised 2007.
    10. Pérez, Carlos & Martín-Román, Ángel & Moral, Alfonso, 2020. "Two decades of the complementary leisure effect in Spain," The Journal of the Economics of Ageing, Elsevier, vol. 15(C).
    11. Mazzotta, Fernanda & Bettio, Francesca & Zigante, Valentina, 2018. "And Thou Shalt Honor: children’s caregiving, work and religion," GLO Discussion Paper Series 202, Global Labor Organization (GLO).
    12. Evsey T. Gurvich, 2019. "Long-Term Global Trends in Pension Policy," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 6, pages 9-26, December.
    13. Pinotti Paolo, 2009. "Financial Development and Pay-As-You-Go Social Security," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-21, March.
    14. Esteban García-Miralles & Nezih Guner & Roberto Ramos, 2019. "The Spanish personal income tax: facts and parametric estimates," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 10(3), pages 439-477, November.
    15. Poteraj, Jarosław, 2008. "Pension systems in 27 EU countries," MPRA Paper 31053, University Library of Munich, Germany.
    16. J. Ignacio Conde-Ruiz & Clara I. González, 2015. "Challenges for Spanish Pensions in the Early 21st Century," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(2), pages 20-24, 08.
    17. Jin Hu & Peter Josef Stauvermann & Juncheng Sun, 2022. "The Impact of the Two-Child Policy on the Pension Shortfall in China: A Case Study of Anhui Province," Sustainability, MDPI, vol. 14(13), pages 1-21, July.
    18. Olivera, Javier, 2010. "Recuperando la Solidaridad en el Sistema Peruano de Pensiones. Una Propuesta de Reforma [Recovering the Principle of Solidarity in the Peruvian Pension System. A reform proposal]," MPRA Paper 60194, University Library of Munich, Germany.
    19. Aaron George Grech, 2015. "The Financial Crisis and Differences in State Pension Generosity across EU Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(02), pages 36-41, August.
    20. López, Jesús Rodríguez & García, Mario Solís, 2016. "Accounting For Spanish Business Cycles," Macroeconomic Dynamics, Cambridge University Press, vol. 20(3), pages 685-714, April.

    More about this item

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • 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:19:y:2020:i:2:p:163-184_2. 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.