The Fiscal Effects of Uncapping Social Security Contributions: Implications for Pension Reform in Spain

Authors

  • Ferran Elias University of Valencia
  • Marc Riudavets-Barcons University of Helsinki

DOI:

https://doi.org/10.7203/IREP.4.2.25834

Abstract

We estimate the fiscal effects of uncapping social security contributions in Spain. Such exercise is not straightforward because there is no public data available on wages above the maximum contribution level. Nevertheless, in 2019 a reform in- creased the ceiling by about 7% and partially unveiled the shape of the distribution for high-wage earners. We exploit this variation and measure that uncapping could increase social security revenue by 0.22% of GDP. We discuss the implications of this estimate for pension reform. Combined with an increase in contribution rates of 0.6 percentage points (Mecanismo de equidad intergeneracional) and a regularization of undocumented immigrants, the overall revenue raised could pay for 44% of the expected increase in pension expenditure by 2030.

Downloads

Download data is not yet available.

References

AIReF (2020). Actualización de Previsiones Demográficas y de Gasto en Pensiones.

Conde-Ruiz, I. and C. González (2016). From Bismarck to Beveridge: the other pension reform in Spain. SERIEs 7 (4), 461–490.

De Quinto, A., L. Hospido, and C. Sanz (2021). The child penalty: evidence from Spain. SERIEs 12 (4), 585–606.

Elias, F., J. Monràs, and J. Vázquez-Grenno (2022). Understanding the Effects of Granting Work Permits to Undocumented Immigrants. Working Paper.

Fanjul, G. and I. Gonzalez-Iniesta (2022). Extranjeros, sin papeles e imprescindibles: Una fotografía de la inmigración irregular en Espan˜a. Informe de Investigación por Causa.

Kleven, H., C. Landais, J. Posch, A. Steinhauer, and J.Zweimuller (2019, May). Child penalties across countries: Evidence and explanations. AEA Papers and Proceedings 109, 122–26.

Melguizo, and J. M. González-Páramo (2013). Who bears labour taxes and social contributions? A meta-analysis approach. SERIEs 4 (3), 247–271.

OECD (2015). Pensions at a Glance 2015. OECD (2017). Pensions at a Glance 2017. OECD (2021). Pensions at a Glance 2021.

Vara, M. J. (2013). Gender inequality in the spanish public pension system. Feminist Economics 19 (4), 136–159.

Zubiri, I. (2016). Las Pensiones en España: situación y alternativas de reforma. Papeles de Economía Española 147.

Downloads

Published

2022-12-29

How to Cite

Elias, F., & Riudavets-Barcons, M. (2022). The Fiscal Effects of Uncapping Social Security Contributions: Implications for Pension Reform in Spain. International Review of Economic Policy-Revista Internacional De Política Económica, 4(2), 1–19. https://doi.org/10.7203/IREP.4.2.25834
Metrics
Views/Downloads
  • Abstract
    320
  • PDF
    226

Issue

Vol. 4 No. 2 (2022)

Section

Articles

License

Copyright is the right exercised by the creator over his/her literary and artistic work. The owner of the copyright is, as a rule, the person who creates the work, which is to say the author. In Copyright Law, the author is considered to be “the natural person who creates a literary, artistic or scientific piece of work”.  Although in principle it is only natural or physical persons who may be considered to be authors, the law foresaw certain cases in which legal persons could also benefit from these rights.

Authorship is irrevocable; it may not be transmitted either inter vivos or in the form of a testamentary trust; it does not disappear with the passage of time nor is it public domain; it is not subject to the statute of limitations.

Copyright Law has a dual nature; it covers moral rights (paternity, integrity, dissemination…), and property rights (reproduction, distribution, public communication, transformation):

Moral rights (article 14 of the Spanish Copyright Law). These refer to acknowledgement of authorship. They are irrevocable and inalienable and correspond to the right to:

  •   Decide whether his/her work is to be disseminated and how.
  •   Acknowledge authorship of the work.
  •   Demand respect for the integrity of the work.
  •   Modify the work while being respectful of the rights acquired.
  •   Withdraw the work from sale, without prejudice to compensation for damages to the owners of the right of use.
  •   Access the single,unique copy of the work that is held by a third party

Property rights (articles 18 to 25 of the Spanish Copyright Law). They refer to the four types of right of use. They allow the owner of the work to obtain financial compensation for the third-party use of his/her work:

  • Reproduction: obtaining of copies of all or part of the work.
  • Distribution: the public availability of the work through its sale, rental, loan or by any other means.
  • Public Communication: action through which a group of people may have access to the work.
  • Transformation: the translation, adaptation and any other modification of the work, leading, or not, to new work derived from it.

Metrics