Introducing an Austrian Backpack in Spain
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- dc.contributor.author Brogueira de Sousa, João
- dc.contributor.author Díaz-Saavedra, Julián
- dc.contributor.author Marimon, Ramon
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2024-11-14T10:09:28Z
- dc.date.available 2024-11-14T10:09:28Z
- dc.date.issued 2022-03-01
- dc.date.modified 2024-11-14T10:08:31Z
- dc.description.abstract In an overlapping generations economy with incomplete insurance markets, the introduction of an employment fund -akin to the one introduced in Austria in 2003, also known as 'Austrian backpack'- can enhance production efficiency and social welfare. It complements the two classical systems of public insurance: pay-as-you-go (PAYG) pensions and unemployment insurance (UI). We show this in a calibrated dynamic general equilibrium model with heterogeneous agents of the Spanish economy in 2018. A `backpack' (BP) employment fund is an individual (across jobs) transferable fund, which earns a market interest rate as a return and is financed with a payroll tax (a BP tax). The worker can use the fund while unemployed or retired. Upon retirement, backpack savings can be converted into an (actuarially fair) retirement pension. To complement the existing PAYG pension and UI systems with a welfare maximising 6% BP tax would raise welfare by 0.96% of average consumption at the new steady state, if we model Spain as an open economy. As a closed economy, there are important general equilibrium effects and, as a result, the social value of introducing the backpack is substantially greater: 16.14%, with a BP tax of 18%. In both economies, the annuity retirement option is an important component of the welfare gains.
- dc.format.mimetype application/pdf*
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1828
- dc.identifier.citation
- dc.identifier.uri http://hdl.handle.net/10230/68534
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 1828
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword computable general equilibrium
- dc.subject.keyword welfare state
- dc.subject.keyword social security reform
- dc.subject.keyword retirement
- dc.subject.keyword Macroeconomics and International Economics
- dc.title Introducing an Austrian Backpack in Spain
- dc.title.alternative
- dc.type info:eu-repo/semantics/workingPaper