Original scientific paper

https://doi.org/10.3326/pse.47.2.2

Pension expenditure determinants: the case of Portugal

Maria Teresa Medeiros Garcia orcid.org/0000-0001-8683-2112 ; Lisbon School of Economics and Management, Universidade de Lisboa, Lisboa, Portugal
André Fernando Rodrigues Rocha da Silva orcid.org/0000-0001-8123-6557

Abstract

Assessing pension expenditure determinants is crucial for the sustainability of public finances. This study aims to disentangle the impact of demographic and economic variables, such as ageing, productivity, and unemployment, on pension expenditure in Portugal. With the use of time-series data, from 1975 to 2014, statistical evidence was found of co-integration between unemployed people aged between 15 and 64 years old, apparent productivity of labour, the old age dependency ratio and pension expenditure as a share of gross domestic product. The use of a vector error correction model, with impulse-response functions and variance decomposition, showed that ageing has an almost insignificant impact in the long-run, when compared with unemployment and productivity.

Keywords

pension expenditure; ageing; productivity; unemployment; linear regression analysis

Hrčak ID:

303957

URI

https://hrcak.srce.hr/303957

Publication date:

12.6.2023.

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