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The Spanish public pension system: current situation, challenges and reform alternatives

Author

Listed:
  • Pablo Hernández de Cos

    (Banco de España)

  • Juan Francisco Jimeno

    (Banco de España)

  • Roberto Ramos

    (Banco de España)

Abstract

The Spanish Social Security System’s deficit rose to 1.5% of GDP in 2015, in contrast to a pre-crisis surplus of 2.2% of GDP in 2007. This deterioration is primarily due to an increase in contributory pension spending (as a % of GDP), as a result of the rise in the dependency ratio, the increase in the pension replacement rate and the decline in the employment rate. Beyond this short-term situation, the Spanish public pension system, as is the case in other developed countries, faces major challenges arising from expectations of significant longevity gains and the attendant growth of the retirement-age population. In this context, this paper aims to contribute to the debate on the situation of the pension system through an analysis of its recent evolution, forward-looking projections that include the impact of the latest reforms and the challenges outstanding.

Suggested Citation

  • 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.
    • Handle: RePEc:bde:opaper:1701
    as

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    References listed on IDEAS

    as
    1. Olympia Bover, 2011. "The Spanish survey of household finances (eff): description and methods of the 2008 wave," Occasional Papers 1103, Banco de España.
    2. Olympia Bover, 2008. "The Spanish Survey of Household Finances (EFF): description and methods of the 2005 wave," Occasional Papers 0803, Banco de España.
    3. Olympia Bover, 2008. "Oversampling of the wealthy in the Spanish Survey of Household Finances (EFF)," IFC Bulletins chapters, in: Bank for International Settlements (ed.), The IFC's contribution to the 56th ISI Session, Lisbon, August 2007, volume 28, pages 399-402, Bank for International Settlements.
    4. Sarai Criado & Adrian van Rixtel, 2008. "Structured finance and the financial turmoil of 2007-2008: and introductory overview," Occasional Papers 0808, Banco de España.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. 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.
    2. Julián Díaz-Saavedra & Ramon Marimon & João Brogueira de, 2023. "A Worker’s Backpack as an Alternative to PAYG Pension Systems," Journal of the European Economic Association, European Economic Association, vol. 21(5), pages 1944-1993.

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    More about this item

    Keywords

    pension systems; pension reforms; population ageing;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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