02152cas a2200265 a 4500 AALejournalIMF009273 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451866865 1018-5941 BD-DhAAL BD-DhAAL Hoffmaister, Willy. Coping with Spain's Aging : Retirement Rules and Incentives / Willy Hoffmaister, Mario Catalan, Jaime Guajardo. Washington, D.C. : International Monetary Fund, 2007. 1 online resource (51 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper evaluates the macroeconomic and welfare effects of extending the averaging period used to calculate pension benefits in a pay-as-you-go system. It also examines the complementarities between reforms extending the averaging period and those increasing the retirement age under alternative tax policies. The analysis is based on a model in the Auerbach-Kotlikoff tradition applied to the Spanish economy. Without reforms, the simulations suggest that aging-related spending as a share of output will increase 16 percentage points by 2050, which are twice as much as in European Commission (2006) projections due to general equilibrium effects. Also, reforms extending the averaging period to the entire work life limit expenditure pressures at the peak of the demographic shock as much as increasing the retirement age in line with life expectancy (4 percentage points of GDP). These reforms and prefunding the demographic shock mitigate the adverse macroeconomic effects of aging and improve welfare. Mode of access: Internet Catalan, Mario. Guajardo, Jaime. IMF Working Papers; Working Paper ; No. 2007/122 Full text available on IMF http://elibrary.imf.org/view/journals/001/2007/122/001.2007.issue-122-en.xml IMF e-Library