Publication detail

Policy Risk in Action: Pension Reforms and Social Security Wealth in Hungary, Czech Republic and Slovakia

Type: Articles in refereed journals
Year: 2008
Number: 12
ISSN / ISBN: ISSN 1367-580X
Published in: The Pension Institute, Cass Business School, City University
Publishing place: London, United Kingdom
Keywords: social security, policy risk, pension reforms
JEL codes: H55, G32, P35
Suggested Citation:
Grants: 402/05/0711 Pension Reforms: Political and Investment Risk GACR 402/05/H510 Ekonomická teorie politických trhů GAUK 318 - Measuring Political Risk of Social Security System among Visegrad Countries
Abstract: We provide evidence on the policy risk of social security in Hungary, Czech Republic and Slovakia by computing the changes in the social security wealth induced by the pension reforms undertaken since the 1990s. Methodologically we follow upon McHale’s (2001) study of selected reforms in G7 countries. However, as we measure the differential impact of the reform on workers of different genders, ages, and levels of education, we are able to capture the aggregate, intergenerational, and intragenerational aspects of the policy risk. Overall, the paper documents that also a pay-as-you-go system is not a secure source of retirement income since pension reforms do change the future contributions and benefits in different directions for different workers, and the magnitude of the reductions in social security wealth sometimes exceeds several years’ worth of the workers’ earnings.
Downloadable: Working paper 0812
June 2023


Česká Spořitelna


Patria Finance