Examining Parametric Reforms' Impact on Financial Stability in the Social Security Organization Using General Equilibrium Models Approach

siami, ali; erfani, alireza; mostolizadeh, seyad mohammad

Back to the articles list | Back to browse issues page

Examining Parametric Reforms' Impact on Financial Stability in the Social Security Organization Using General Equilibrium Models Approach

Ali Siami¹

, Alireza Erfani ^*

², Seyad mohammad Mostolizadeh¹

1- semnan university
2- semnan university , aerfani@semnan.ac.ir

Abstract: (96 Views)

The aim of this research is to investigate the impact of parametric reforms on the financial sustainability of the Social Security Organization, the largest social insurance organization in the country. For this purpose, a Dynamic Stochastic General Equilibrium (DSGE) model based on the overlapping generations approach has been employed. The research findings indicate that increasing the retirement age by three years and maintaining a constant retirement age results in approximately a 2% increase in the ratio of expenditures to resources of the Social Security Organization. However, adding two years to the retirement age while decreasing life expectancy by one year will reduce this ratio by about eight-tenths of a percent. Increasing life expectancy by three years and retirement age by two years increases the ratio of expenditures to resources of the organization by about 2.7%. A two percent increase in the insurance premium of the Social Security Organization does not significantly alter the ratio of expenditures to resources due to the decrease in labor force supply.

Keywords: Parametric Reforms, Social Security Organization, Resource-to-Expenditure Ratio, Overlapping Generations Model, DSGE Model.