Spanish Pension System: Population Aging and Immigration Policy
Year: 2008
Type: article
Abstract: There is a widespread consensus in the literature that, as consequence of the demographic\ntransition, the current Spanish pension system will become unsustainable in the next decades.\nIn this article we evaluate the sustainability of the contributory pensions' sub-system, taking\ninto account the demographic projections by the Spanish Statistical Office (INE). A baseline\nscenario is projected as well as several reforms are simulated, focusing on: (i) selective\nimmigration policy, (ii) changes in the way of setting the pensions and (iii) increase of the\nlegal age of retirement up to 68. The main results are the following. The current system\nwould not incur deficits until 2018, from then deficits will begin to be accumulated. The\nexpenditure in pensions practically would double (from 8.3 % in 2005 to 17.2 % in 2050). A\nselective immigration policy -towards foreign young people- would help, but does not solve\nthe long-term sustainability of the current system. A policy that combines a pensions' growth\nat a pace lower than productivity growth and extends the legal age of retirement up to 68\nwould give solvency to the system beyond 2029
Author: Javier Vázquez‐Grenno
Institution: Universitat Autònoma de Barcelona
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2156524935