Abstract
This paper shows the dynamic effects of the reform of the Spanish social security pension system on the pensions received by one of the most vulnerable groups of the population, namely, widows. We undertake a duration analysis to account for the effects of reform over time. We study the effects on the widows? overall financial welfare in terms of the evolution of their risk of poverty. We show that the combined effects of the measures to be implemented will have a positive impact; that is to say, the risk of poverty diminishes with respect to the current financial situation of the widows. However, the risk of poverty increases as the pensioners get older.
Highlights
This paper demonstrates the dynamic effect that the reform of the social security pension system has on the overall financial welfare of one of the most vulnerable groups in the population: the recipients of widow pensions
While a reform that would only entail a longer contribution history to compute the pension benefit would increase the cumulative poverty risk between 5 and 8 per cent, an increase in the coefficient applied to such a regulatory base from 52 per cent to 60 per cent would bring the most positive effects, that is, a decrease in the cumulative poverty risk of between 6.2 and 8.3 per cent compared to the current situation
The combination of the two measures would have a positive effect on the welfare of the widow pensioners as it would reduce their cumulative risk of poverty by 1.8 and 2.2 per cent
Summary
The aim of this paper is to evaluate the effects of the reform, which was passed by the Spanish parliament in August 2011, on the future welfare of the people who are owed a widow pension. Our aim is to quantify the combined effect of these two measures
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