Hostname: page-component-78c5997874-t5tsf Total loading time: 0 Render date: 2024-11-05T16:55:54.751Z Has data issue: false hasContentIssue false
  • English
  • Français

Microsimulation of pension reforms: behavioural versus nonbehavioural approach

Published online by Cambridge University Press:  23 November 2009

MARGHERITA BORELLA  and
FLAVIA CODA MOSCAROLA
MARGHERITA BORELLA
Affiliation:
University of Turin and CeRP – Collegio Carlo Alberto (e-mail: [email protected])
FLAVIA CODA MOSCAROLA
Affiliation:
CeRP – Collegio Carlo Alberto (e-mail: [email protected])
Get access Rights & Permissions [Opens in a new window]

Abstract

We analyse the impact of various pension regimes, as shaped by recent Italian reforms, on retirement age, adequacy issues, and redistribution. We add to the literature on microsimulation by accounting for individuals' reactions to financial incentives when deciding to retire. We find that shifting from a generous defined benefit (DB) system to an actuarially fair notional defined contribution (NDC) system induces individuals, particularly men, to postpone retirement. Voluntary postponement of retirement would grant employees a replacement rate comparable to that obtained in the pre-reform DB regime, while the self-employed experience a substantial reduction in their replacement rate.

Keywords

C63H55J26Microsimulationpublic pensionsretirement
Type
Articles
Information
Journal of Pension Economics & Finance , Volume 9 , Issue 4 , October 2010 , pp. 583 - 607
Copyright
Copyright © Cambridge University Press 2009

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Belloni, M. and Alessie, R. (2009) The importance of financial incentives on retirement choices: new evidence for Italy. Labour Economics, 16(5): 578–588.CrossRefGoogle Scholar
Baker, M., Gruber, J., and Milligan, K. (2003) The retirement incentive effects of Canada's income security programs. Canadian Journal of Economics, 36(2): 261–290.CrossRefGoogle Scholar
Blundell, R., Meghir, C., and Smiths, S. (2002) Pensions incentives and the patterns of early retirement. Economic Journal, 112: 153–170.CrossRefGoogle Scholar
Borella, M. (2004) The error structure of earnings: an analysis on Italian longitudinal data. Rivista Internazionale di Scienze Economiche e Commerciali/International Review of Economics and Business, 51(3): 405–422.Google Scholar
Borella, M. and Coda Moscarola, F. (2006) Distributive properties of pension systems: a simulation of the Italian transition from defined benefit to notional defined contribution. Giornale degli Economisti e Annali di Economia, 65(1) (May).Google Scholar
Borella, M. and Fornero, E. (2009) Adequacy of pension systems in Europe: an analysis based on comprehensive replacement rates. Paper prepared for the AIM project. ENEPRI Report n. 68.CrossRefGoogle Scholar
Bourguignon, F. and Spadaro, A. (2006) Microsimulation as a tool for evaluating redistribution policies. Journal of Economic Inequality, 4(1): 77–106.CrossRefGoogle Scholar
Coile, C. and Gruber, J. (2000) Social security incentives for retirement. Working Paper 7651, National Bureau of Economic Research, Cambridge, MA.CrossRefGoogle Scholar
Covip (2008) Relazione per l'anno 2007. Commissione Vigilanza per I Fondi Pensione, Rome.Google Scholar
Creedy, J. and Kalb, G. (2006) Labour Supply and Microsimulation: The Evaluation of Tax Policy Reforms. Cheltenham: Edward Elgar.Google Scholar
Dekkers, G., Buslei, H., Cozzolino, M., Desmet, R., Geyer, J., Hofmann, D., Raitano, M., Steiner, V., Tanda, P., Tedeschi, S., and Verschueren, F. (2009) What are the consequences of the AWG-projections for the adequacy of social security pensions? An application of the dynamic micro simulation model MIDAS for Belgium, Italy and Germany. ENEPRI Research Report n.65, AIM WP4.CrossRefGoogle Scholar
Eurostat (2009) Living conditions and welfare. http://epp.eurostat.ec.europa.eu.Google Scholar
Feldstein, M. and Liebman, J. B. (2002) The Distributional Aspects of Social Security and Social Security Reform. Chicago: University of Chicago Press.CrossRefGoogle Scholar
Friedberg, L. and Webb, A. (2005) Retirement and the evolution of pension structure. Journal of Human Resources, 40(2): 281–308.CrossRefGoogle Scholar
Gruber, J. and Wise, D. (2004) Social Security Programs and Retirements Around the World, Chicago: University of Chicago, NBER.Google Scholar
ISTAT (2003a) Annuario Statistico Italiano 2003. Roma.Google Scholar
ISTAT (2003b) Rilevazione Trimestrale sulle Forze di Lavoro. Roma.Google Scholar
Mazzaferro, C. and Morciano, M. (2005) Un Modello di Microsimulazione Dinamica per la Stima della Riforma Pensionistica. Paper prepared for the SIEP Annual Conference Politiche Pubbliche, Sviluppo e Crescita, University of PAVIA.Google Scholar
Reynolds, M. O. and Smolensky, E. (1977) Post-fisc distributions of income in 1950, 1961, and 1970. Public Finance Quarterly, 5(4): 419–438.CrossRefGoogle Scholar
Richiardi, M. and Leombruni, R. (2006) LABORsim: an agent-based microsimulation of labour supply −an application to Italy. Computational Economics, 27(1): 63–88.Google Scholar
Smith, J. P. (2003) Trends and projections in income replacement during retirement. Journal of Labor Economics, 21(4): 755–782.CrossRefGoogle Scholar