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N° 2008-25 |
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| November 2008 |
A General Equilibrium Evaluation of the Sustainability
of the New Pension Reforms in Italy |
| Riccardo Magnani |
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| Most European countries have recently introduced pension system reforms to face the financial
problem related to population ageing. Italy is not an exception. The reforms introduced
during the Nineties (Amato Reform in 1992 and Dini Reform in 1995), even if they will produce
a strong reduction in pension benefits, are generally thought not sufficient to adequately
face the population ageing problem. For this reason, in 2004, the Berlusconi government
introduced a new reform that increases the retirement age to 60 years from January 2008
onwards, to 61 years from 2010 and to 62 from 2014. In 2007, the left-wing government
replaced this reform with a softer one that fixes the minimum retirement age at 58 from 2008.
Using an applied overlapping-generations general equilibrium model, we analyze the impact
of the new reforms on the macroeconomic system and in particular on the long-run sustainability
of the pension system. We show that the increase in the retirement age would permit
to reduce pension deficits in the short and medium run, while in the long run these reforms
would become ineffective. |
Non-technical summary |
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Résumé
non-technique
en français |
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| Full text |
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| Pension reforms; applied OLG models; immigration; endogenous growth |
Keywords |
| D58; H55; J10 |
JEL classification |
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