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Dynamic microsimulation modelling of potential pension reforms in North Macedonia

Published online by Cambridge University Press:  10 January 2020

Blagica Petreski  and
Marjan Petreski Open the ORCID record for Marjan Petreski [Opens in a new window]
Blagica Petreski
Affiliation:
Finance Think – Economic Research and Policy Institute, Skopje, North Macedonia
Marjan Petreski*
Affiliation:
University American College Skopje, North Macedonia
*
*Corresponding author. Email: marjan.petreski@uacs.edu.mk
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Abstract

Due to structural and policy shifts, pension deficit in North Macedonia doubled over a decade and significantly outpaced the central budget deficit. The objective of the paper is to examine fiscal and development effects of few pension-reform designs. We constructed MK-PENS Dynamic Microsimulation Pension Model and simulated the effects of few reforms affecting one stakeholder and few combined reforms. Results robustly suggest that without reform and assuming only statutory pension adjustment, the deficit will remain as is. Simulated scenarios suggest that proposed pension reforms significantly reduce the pension deficit, with the most favourable results obtained within the combined scenarios of shared burden. Gradual introduction of reform's elements should come into play in case large political cost is envisaged.

Keywords

MicrosimulationNorth Macedoniapension deficitpension reform

JEL classification

H75: State and Local Government: Health • Education • Welfare • Public Pensions H55: Social Security and Public Pensions
Type
Article
Information
Journal of Pension Economics & Finance , Volume 20 , Issue 1 , January 2021 , pp. 49 - 66
Copyright
Copyright © The Author(s) (2020). Published by Cambridge University Press

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