[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/78163.html
   My bibliography  Save this paper

Pension reforms in the EU since the early 2000's: achievements and challenges ahead

Author

Listed:
  • Carone, Giuseppe
  • Eckefeldt, Per
  • Giamboni, Luigi
  • Laine, Veli
  • Pamies, Stephanie
Abstract
Most EU Member States have carried out substantial pension reforms over the last decades in order to enhance fiscal sustainability, while maintaining adequate pension income. The intensity of pension reforms has been particularly strong since 2000. These reforms have been implemented through a wide range of measures that have substantially modified the pension system rules and parameters. One of the most important elements of pension reforms, aside of whether countries engaged or not in a systemic change, has been the introduction of mechanisms aimed at automatically adjusting (indexing) the key pension parameters (pension age, benefits, financing resources) to demographic pressure (e.g. changes in life expectancy, increase in the dependency ratio). Indeed, since the mid-1990's, half of the EU Member States have adopted either automatic balancing mechanisms, sustainability factors and / or automatic links between retirement age and life expectancy. All these pension reforms are projected to have a substantial impact on containing future pension expenditure trends. According to the latest long-term projections in the 2015 Ageing Report, public pension expenditure is projected to be close to 11% of GDP over the long run in the EU, almost the same as in 2013. However, the fiscal impact of ageing is still projected to be substantial in many EU countries, becoming apparent already over the course of the next two decades. This is also due to the very gradual phasing in of already legislated reforms, an issue that raises questions about the intergenerational fairness of the reforms and poses some doubt on the time-consistency of their implementation. Indeed, the sustainability-enhancing pension reforms legislated in a majority of EU countries will lead to a reduction of generosity of public pension schemes for future generations of retirees. But to make sure that these reforms will not have to face political and social resistance and risk of reversal in the moment they start to be implemented in full, other "flanking" policy measures are likely to be necessary: for example, reforms that boost retirement incomes by effectively extending working lives and employability of older workers (also through flexible working arrangements that allow people to keep working beyond current formal retirement age and to step down gradually from full-time to part-time to very part-time work) and provide other means of retirement incomes (e.g. private pensions) and appropriate social-safety nets to avoid that low-wage people follow back in poverty at old age.

Suggested Citation

  • Carone, Giuseppe & Eckefeldt, Per & Giamboni, Luigi & Laine, Veli & Pamies, Stephanie, 2016. "Pension reforms in the EU since the early 2000's: achievements and challenges ahead," MPRA Paper 78163, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:78163
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/78163/1/MPRA_paper_77574.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Grech, Aaron George, 2010. "Assessing the sustainability of pension reforms in Europe," MPRA Paper 27407, University Library of Munich, Germany.
    2. Vincenzo Galasso, 2008. "Ageing and the Skew Risk in Collective Choices," Revue économique, Presses de Sciences-Po, vol. 59(5), pages 1023-1043.
    3. Markus Knell & Doris Prammer, 2006. "The Austrian Pension System – How Recent Reforms Have Changed Fiscal Sustainability and Pension Benefits," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 69-93.
    4. Arij Lans Bovenberg, 2008. "Grey New World: Europe on the Road to Gerontocracy?," CESifo Economic Studies, CESifo Group, vol. 54(1), pages 55-72, March.
    5. Giuseppe Carone, 2005. "Long-Term Labour Force Projections for the 25 EU Member States:A set of data for assessing the economic impact of ageing," Labor and Demography 0512006, University Library of Munich, Germany.
    6. Vincenzo Galasso, 2008. "The Political Future of Social Security in Aging Societies," MIT Press Books, The MIT Press, edition 1, volume 1, number 026257246x, April.
    7. Paul D. Collins & Andrew Podger & Keyong Dong & Matthias Stepan & Karen M. Anderson, 2014. "Pension Reform In The European Periphery: The Role Of Eu Reform Advocacy," Public Administration & Development, Blackwell Publishing, vol. 34(4), pages 320-331, October.
    8. Martin, John P. & Whitehouse, Edward, 2008. "Reforming Retirement-Income Systems: Lessons from the Recent Experiences of OECD Countries," IZA Discussion Papers 3521, Institute of Labor Economics (IZA).
    9. Bielawska, Kamila & Chłoń-Domińczak, Agnieszka & Stańko, Dariusz, 2017. "Retreat from mandatory pension funds in countries of the Eastern and Central Europe in result of financial and fiscal crisis: Causes, effects and recommendations for fiscal rules," MPRA Paper 83345, University Library of Munich, Germany.
    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. Grech, Aaron George, 2015. "Pension reforms in the 1990s and during the financial crisis: More of the same?," MPRA Paper 66894, University Library of Munich, Germany.
    2. Grech, Aaron George, 2012. "Evaluating the possible impact of pension reforms on future living standards in Europe," MPRA Paper 39851, University Library of Munich, Germany.
    3. María del Carmen Ramos-Herrera & Simón Sosvilla-Rivero, 2020. "Fiscal Sustainability in Aging Societies: Evidence from Euro Area Countries," Sustainability, MDPI, vol. 12(24), pages 1-20, December.
    4. Grech, Aaron George, 2014. "Evaluating the possible impact of pension reforms on elderly poverty in Europe," MPRA Paper 57639, University Library of Munich, Germany.
    5. repec:cep:sticas:/161 is not listed on IDEAS
    6. 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.
    7. Gonzalez-Eiras, Martín & Niepelt, Dirk, 2012. "Ageing, government budgets, retirement, and growth," European Economic Review, Elsevier, vol. 56(1), pages 97-115.
    8. Ross Guest, 2010. "Policy Forum: Saving for Retirement: Policy Options to Increase Retirement Saving in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 43(3), pages 293-301, September.
    9. Raffelhüschen, Bernd & Hagist, Christian & Moog, Stefan & Vatter, Johannes, 2009. "Ehrbare Staaten? Die deutsche Generationenbilanz im internationalen Vergleich," Argumente zur Marktwirtschaft und Politik 107, Stiftung Marktwirtschaft / The Market Economy Foundation, Berlin.
    10. Hollanders, D.A., 2010. "The Political Economy of Intergenerational Risk Sharing," Other publications TiSEM 3c50ad85-2971-481e-9aa3-a, Tilburg University, School of Economics and Management.
    11. Hollanders, D.A., 2010. "The Political Economy of Intergenerational Risk Sharing," Discussion Paper 2010-102, Tilburg University, Center for Economic Research.
    12. Said Outlioua & Abdesselam Fazouane, 2023. "Which factors affect the sustainability of pension schemes?," Economic Affairs, Wiley Blackwell, vol. 43(1), pages 89-108, February.
    13. József Kárpáti, 2011. "The pension systems of Arab countries in the light of socio-economic risks," Public Finance Quarterly, State Audit Office of Hungary, vol. 56(2), pages 179-192.
    14. Stefan Moog & Christoph Müller, 2011. "Zur Erhöhung der Regelaltersgrenze in Deutschland: eine internationale Perspektive," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 80(2), pages 33-51.
    15. Thomas Horvath & Helmut Mahringer, 2014. "Einfluss von Bildungsexpansion und Pensionsreformen auf die Erwerbsbeteiligung. Prognose der Erwerbsquote und des Arbeitskräfteangebotes bis 2030," WIFO Monatsberichte (monthly reports), WIFO, vol. 87(6), pages 411-426, June.
    16. Börsch-Supan, Axel, 2007. "Rational Pension Reform," MEA discussion paper series 07132, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    17. Fenge, Robert & Peglow, François, 2018. "Decomposition of demographic effects on the german pension system," The Journal of the Economics of Ageing, Elsevier, vol. 12(C), pages 61-76.
    18. Gretchen Van Riesen, 2009. "The Pension Tangle: Achieving Greater Uniformity of Pension Legislation and Regulation in Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 294, August.
    19. Jensen, Henning Tarp, 2009. "General equilibrium impact evaluation of road sector investment programs in Ghana," Conference papers 331858, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    20. Xiaohua Chen & Zaigui Yang, 2019. "Stochastically Assessing the Financial Sustainability of Individual Accounts in the Urban Enterprise Employees’ Pension Plan in China," Sustainability, MDPI, vol. 11(13), pages 1-20, June.
    21. Luise Mladen & Mihaela Ghenta, 2017. "Factors that Potentially Affect the Financial Sustainability of the Pension System in Romania," Journal of Economic Development, Environment and People, Alliance of Central-Eastern European Universities, vol. 6(2), pages 14-23, June.

    More about this item

    Keywords

    Pensions; ageing population; public expenditure; debt; deficit; potential growth; structural reforms; retirement age; older workers; longevity risk.;
    All these keywords.

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:pra:mprapa:78163. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.