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

Díaz-Saavedra, Julián

doi:10.1017/s147474721800032x

Cited by 3 publications

(2 citation statements)

References 8 publications

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“…It has been used in the past. The recent attempts by Italy or Spain are telling examples (Díaz-Saavedra, 2020;Palier, 2021;Whitehouse, 2009).…”

Section: Is the Erosion Of The Real Value Of A Social Benefit Equival...mentioning

confidence: 99%

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Should we uprate social benefits for inflation as a matter of Article 1 Protocol 1?

Hartmann-Cortés

2022

European Journal of Social Security

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Would a Convention State breach any property rights if it does not adjust its social security benefits for inflation? This article discusses under which circumstances Article 1 Protocol 1 (A1P1) of the European Convention on Human Rights may require Convention States to uprate the real value of social benefit entitlements as a consequence of inflation. The methodology followed was both doctrinal and analytical legal research based on the European Court of Human Rights’ (ECtHR) case law. The text firstly considers why A1P1 may be engaged. The argument holds that lack of indexation of social benefits has a similar effect to their legislative reduction when it comes to the peaceful enjoyment of social security benefits. Afterwards it explores what follows for Convention States. Considering the literature on ‘positive’ obligations and A1P1, the article constructs a plausible case under which A1P1 would require Convention States to uprate (at least partially) a segment of social benefit entitlements.

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“…It has been used in the past. The recent attempts by Italy or Spain are telling examples (Díaz-Saavedra, 2020;Palier, 2021;Whitehouse, 2009).…”

Section: Is the Erosion Of The Real Value Of A Social Benefit Equival...mentioning

confidence: 99%

“… 10. See, for instance, Palier (2021: 77–110). Spain, moreover, uses an automatic partial indexation mechanism below the evolution of prices (Díaz-Saavedra, 2020). …”

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confidence: 99%

Should we uprate social benefits for inflation as a matter of Article 1 Protocol 1?

Hartmann-Cortés

2022

European Journal of Social Security

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Heterogeneity in longevity, redistribution, and pension reform

Díaz-Saavedra

2022

Journal of Pension Economics and Finance

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The gap in the life expectancy of the elderly across educational groups is high, and this will probably increase over the coming decades. In this article, we use a computable overlapping generations model economy to show that the long-term link between heterogeneity in longevity and education could translate into an implicit tax/subsidy on the expected lifetime benefits to lifetime payroll taxes ratio, with rates around 10%, and that such rates pervert redistributive objectives of pension systems. We then analyze some parametric changes aimed at restoring the progressiveness of these systems in the long run, and find that a higher minimum pension or changes in the pension benefit formula go a long way as tools to restore the system's long-term progressivity.

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A Worker’s Backpack as an Alternative to PAYG Pension Systems

Díaz-Saavedra

Marimon

Sousa

2023

Journal of the European Economic Association

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Facing an ageing population and historical trends of low employment rates, pay-as-you-go (PAYG) pension systems, currently in place in several European countries, imply very large economic and welfare costs in the coming decades. In an overlapping generations economy with incomplete insurance markets and frictional labour markets, an employment fund, which can be used while unemployed or retired, can enhance production efficiency and social welfare. With an appropriate design, the sustainable Backpack employment fund (BP) can greatly outperform (measured by average social welfare in the economy) existing pay-as-you go systems and also Pareto dominate a full privatization of the pension system, as well as a standard fully funded defined contribution pension system. We show this in a calibrated model of the Spanish economy, by comparing the effect of its ageing transition under these different pension systems and by showing how a front-loaded transition, from the PAYG to the BP system can be Pareto improving, while minimizing the cost of the reform.

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

Cited by 3 publications

References 8 publications

Should we uprate social benefits for inflation as a matter of Article 1 Protocol 1?

Should we uprate social benefits for inflation as a matter of Article 1 Protocol 1?

Heterogeneity in longevity, redistribution, and pension reform

A Worker’s Backpack as an Alternative to PAYG Pension Systems

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