Welfare Effects of Pension Reforms


Video: WIFO Research Seminar with Andreas Haller (Norwegian School of Economics)

On 9 November 2022, Andreas Haller presented his conclusions on how an increase in the statutory retirement age may affect social security systems at the WIFO Research Seminar. WIFO economist Benjamin Bittschi commented on the lecture afterwards.



Andreas Haller (Norwegian School of Economics)
WIFO Research Seminar, Österreichisches Institut für Wirtschaftsforschung, Wien, 09.11.2022 12:30, https://tinyurl.com/3kscdsk3
Comment: Benjamin Bittschi – You can participate via MS Teams, see link above. The lecture will be recorded.
Organised by: Austrian Institute of Economic Research
Online since: 24.10.2022 0:00
Policy makers around the world have implemented pension reforms – increasing statutory retirement ages and/or adjusting pension formulas – to ease the demographic burden on pay-as-you-go social security systems. Andreas Haller's paper provides a unifying framework to evaluate the welfare effects of pension reforms using a sufficient statistics approach. He shows that the welfare effects of any reform rest crucially on the "multiplier" – the total fiscal effect relative to the mechanical fiscal effect of a reform. Multipliers can be readily estimated with reduced-form methods using data on contributions to and transfers from the entire welfare state system. To illustrate his framework, he exploits a series of pension reforms in Austria. Andreas Haller finds that increasing the early retirement age has a multiplier of 0.4 to 0.7. By contrast, reducing pension generosity generates a multiplier of 1.4 to 1.7. In the Austrian context, he finds that reducing pension generosity is preferable to increasing the early retirement age to curb social security expenditures.
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Mag. Dr. Benjamin Bittschi

Research groups: Labour Market, Income and Social Security
© Christian Bowen/Unsplash
© Christian Bowen/Unsplash