NTA2020 Guerra

Global Meeting on Population and the Generational Economy, August 2020

Presentation: Aline Guerra, Raphaella Rabelo, Bernardo Queiroz, Impact of mortality differentials by education level on pension wealth associated with the recent pension reform in Brazil

Abstract

The objective of this paper is to analyze the differential impact of life expectancy, associated with education, in the relationship between contribution and benefits in the Brazilian Public Pension Program. We used data from the Brazilian National Household Sample Survey (PNAD), in 2015, to estimate the value of Social Security Wealth (SSW) for different groups of workers considering differences in education and mortality levels. SSW is the present value of future benefits that the insured has right to receive at the time of retirement less the contributions. We also simulate the impacts of the recent public pension reform on SSW for each different sub-group of the population. The results indicate that the difference between contributions and benefits is large, that is, people pay less in contributions than they receive in benefits, and this difference is accentuated with a higher level of education among workers. Due to this disparity between wealth, age Minimum requirement for benefit is a good measure for the short term, but not effective in the long term. The minimum age does not consider the differentials of the population and therefore does not follow the evolution of life expectancy over time.

File: NTA2020 Guerra

Paper: NTA2020 paper Guerra

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