A microsimulation framework for projecting public pensions’ sustainability. Simulating labour-market transitions and contribution years in Argentina

Mardi | 2014-09-30
Sully 5, 16h00-17h20

Leonardo Eric CALCAGNO

Using a standard microsimulation framework, this paper intends to draw perspectives on Argentina’s pension system from a household-level quaterly survey data, the EPH. After describing the country’s current public Pay-As-You-Go pension system, this paper uses the country’s household survey’s labour market related data to describe and estimate transitions between labour market states for individuals of working age. Finally, together with demographic data provided by Argentina’s statistical body INDEC, we describe how we intend to use these empirical labour market transition probabilities as inputs for simulating forward, up to 2040 and backwards, labour careers of our surveyed population. We should hence be able to reconstitute the labour carreer of each individual, i.e. the total amount of contributive years each individual has validated once he reaches retirement age. This would lay the basic framework for future projections on Argentina’s pension system’s mid to long-term sustainability.