{"title":"The collapse of Brazilian Social Security: Macroeconomic impacts of the increase of the minimum age of PEC nº 287/2016 reform","authors":"Carlos Eduardo De Freitas, N. Paes","doi":"10.12660/BRE.V39N12019.75504","DOIUrl":null,"url":null,"abstract":"This paper presents a simulation of the economic impacts of the increase of the minimum age contained in the Proposal for Constitutional Amendment (PEC) no 287/2016. For that, an overlapping generations (OLG) model with 57 generations was built, including the transition rule. The results suggest that not increasing the minimum age for retirement is a very bad choice for society. The fiscal situation becomes unsustainable, and the expansion of social security expenditures, in combination with the reduction of the labor supply, leads the country to a scenario of a sharp fall in consumption and output per capita. The simulation with the new minimum retirement age of PEC no 287/2016 indicates that, although it is not the definitive solution to the Brazilian pension issue. The results of the model indicate that raising the minimum age avoids a very bad scenario, but does not seem to be even able to maintain the current level of output per capita. As a policy suggestion, although PEC no 287/2016 has not even been voted, the recommendation is that it represents a minimum level for the next pension reform.","PeriodicalId":332423,"journal":{"name":"Brazilian Review of Econometrics","volume":"143 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2019-07-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Brazilian Review of Econometrics","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.12660/BRE.V39N12019.75504","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 3
Abstract
This paper presents a simulation of the economic impacts of the increase of the minimum age contained in the Proposal for Constitutional Amendment (PEC) no 287/2016. For that, an overlapping generations (OLG) model with 57 generations was built, including the transition rule. The results suggest that not increasing the minimum age for retirement is a very bad choice for society. The fiscal situation becomes unsustainable, and the expansion of social security expenditures, in combination with the reduction of the labor supply, leads the country to a scenario of a sharp fall in consumption and output per capita. The simulation with the new minimum retirement age of PEC no 287/2016 indicates that, although it is not the definitive solution to the Brazilian pension issue. The results of the model indicate that raising the minimum age avoids a very bad scenario, but does not seem to be even able to maintain the current level of output per capita. As a policy suggestion, although PEC no 287/2016 has not even been voted, the recommendation is that it represents a minimum level for the next pension reform.
本文模拟了第287/2016号修宪提案中提高最低年龄的经济影响。为此,建立了包含过渡规则的57代重叠代(OLG)模型。结果表明,不提高最低退休年龄对社会来说是一个非常糟糕的选择。财政状况变得不可持续,社会保障支出的扩大,加上劳动力供给的减少,导致该国出现人均消费和产出急剧下降的局面。新的最低退休年龄PEC no 287/2016的模拟表明,虽然它不是巴西养老金问题的最终解决方案。该模型的结果表明,提高最低年龄避免了一种非常糟糕的情况,但似乎甚至无法维持目前的人均产出水平。作为一项政策建议,尽管PEC no 287/2016甚至尚未投票,但建议它代表了下一次养老金改革的最低水平。