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Penzijní reforma v ČR: konverze ke kombinovanému systému s ohledem na limity fiskální politiky
[Pension reform in the Czech republic: a switch to mixed system with regard for limits of fiscal policy]

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  • David Marek

Abstract

The Czech Republic is going to face ageing of its population. It will affect the economy in many ways. The pension system is one of them. This paper provides a view on possibilities how to insure long-term stability of the pension system in the Czech Republic using a mix of pay-as-you-go and fully funded system. Simulations are based on OLG model, long-term demographic forecast and limits of fiscal policy stemming from the necessity to fulfill Maastricht criteria and The Stability and Growth Pact. Those obligations creates a frontier for plausible solutions. Results suggest that it is possible to find a solution for mixed system providing more favorable conditions than purely parametric changes of PAYG. Taking into account fiscal limits, the contribution rate to the FF pillar would be similar to the rates in other CEE countries where pension reform already started.

Suggested Citation

  • David Marek, 2008. "Penzijní reforma v ČR: konverze ke kombinovanému systému s ohledem na limity fiskální politiky [Pension reform in the Czech republic: a switch to mixed system with regard for limits of fiscal polic," Politická ekonomie, Prague University of Economics and Business, vol. 2008(1), pages 80-101.
    • Handle: RePEc:prg:jnlpol:v:2008:y:2008:i:1:id:632:p:80-101
    DOI: 10.18267/j.polek.632
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    References listed on IDEAS

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    1. Martin Feldstein, 1998. "Privatizing Social Security," NBER Books, National Bureau of Economic Research, Inc, number feld98-1.
    2. Ondøej Schneider, 1998. "Dynamický model dùchodové reformy v ÈR (Dynamic Model of Pension Reform)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 48(1), pages 55-65, January.
    3. Martin Feldstein & Andrew Samwick, 2002. "Potential Paths of Social Security Reform," NBER Chapters, in: Tax Policy and the Economy, Volume 16, pages 181-224, National Bureau of Economic Research, Inc.
    4. Martin Feldstein, 2005. "Structural Reform of Social Security," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 33-55, Spring.
    5. Mr. Thomas Laursen, 2000. "Pension System Viability and Reform Alternatives in the Czech Republic," IMF Working Papers 2000/016, International Monetary Fund.
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    More about this item

    Keywords

    pension system; fiscal policy; social security; funded pillar; pay-as-you-go; public pensions; overlapping-generations model; ageing population;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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