Article (Scientific journals)
Social Security, Implicit Debt And Inequality : Learning From The Belgian Experience
Flawinne, Xavier; Maréchal, Claire; Perelman, Sergio et al.
2013In Revue Belge de Sécurité Sociale
Peer reviewed
 

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Keywords :
social security wealth; implicit debt; public pensions; inequality; belgium; microsimulation
Abstract :
[en] Public pension schemes based on the pay-as-you-go principle are unfunded, by construction. In other words, present and future pensioners rely on the promises made by Social Security institutions for the payment of their pensions. This commitment, basically described by a series of rules defining eligibility conditions, benefits computation and pension contributions, is not reported in national account. Neither as part of the public debt to which in fact they belong. In this paper, we estimate the burden of this implicit debt for Belgium using a representative sample with detailed administrative micro-data from pension record files. Moreover, for present and future pensioners the actuarial expected value of pensions is part of their personal wealth, aside from other assets, but is intangible. Feldstein (1974) introduced the concept of social security wealth (SSW) to describe this component of personal wealth, and showed how individuals’ behavior, mainly labor supply (retirement) and consumption (wealth accumulation), is potentially affected by pension entitlements. The way SSW is distributed among individuals in the Belgian population is another key issue addressed in this paper.
Research Center/Unit :
CREPP - Centre de Recherche en Économie Publique et de la Population - ULiège
Disciplines :
Economic systems & public economics
Author, co-author :
Flawinne, Xavier ;  Université de Liège - ULiège > HEC - École de gestion de l'ULiège > HEC-Ecole de gestion
Maréchal, Claire
Perelman, Sergio  ;  Université de Liège - ULiège > HEC - École de gestion de l'ULiège > HEC-Ecole de gestion
Tarantchenko, Ekaterina ;  Université de Liège - ULiège > HEC-Ecole de gestion : UER > Economie industrielle
Language :
English
Title :
Social Security, Implicit Debt And Inequality : Learning From The Belgian Experience
Publication date :
2013
Journal title :
Revue Belge de Sécurité Sociale
ISSN :
0035-0834
Publisher :
Ministère Fédéral des Affaires Sociales, de la Santé Publique et de l’Environnement, Bruxelles, Belgium
Peer reviewed :
Peer reviewed
Available on ORBi :
since 07 October 2014

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