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Pension reform in emerging countries: Simulations on the Tunisian case

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  • Mehdi Ben Braham

Abstract

This paper discusses the impact of aging on the financial equilibrium of the Tunisian retirement system and the macroeconomic implications of reform and introduces capitalized pillars. Using a stylized, closed economy, overlapping generation model to analyze the impact of the introduction of a multi-pillar system combining pay-as-you-go (PAYG) and funded elements (both temporary and permanent funded elements), the analysis is focused, on the one hand, on the saving response to the reform in the aggregate level and, on the other hand, on accumulation and consumption profile per cohort. The reform leads to an important crowding-out effect, limiting the increase of capital accumulation. The simulations show also that the burden of the reform is unequally supported by the different cohorts.

Suggested Citation

  • Mehdi Ben Braham, 2006. "Pension reform in emerging countries: Simulations on the Tunisian case," NFI Working Papers 2006-WP-06, Indiana State University, Scott College of Business, Networks Financial Institute.
    • Handle: RePEc:nfi:nfiwps:2006-wp-06
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    References listed on IDEAS

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    More about this item

    Keywords

    Aging; pension reform; saving;
    All these keywords.

    JEL classification:

    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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