The Fiscal Effects of Uncapping Social Security ContributionsImplications for Pension Reform in Spain

  1. Elias, Ferran 1
  2. Riudavets-Barcons, Marc 2
  1. 1 Universitat de València
    info

    Universitat de València

    Valencia, España

    ROR https://ror.org/043nxc105

  2. 2 University of Helsinki
    info

    University of Helsinki

    Helsinki, Finlandia

    ROR https://ror.org/040af2s02

Revista:
International Review of Economic Policy: Revista Internacional de Política Económica

ISSN: 2695-7035

Ano de publicación: 2022

Volume: 4

Número: 2

Páxinas: 1-19

Tipo: Artigo

DOI: 10.7203/IREP.4.2.25834 DIALNET GOOGLE SCHOLAR lock_openAcceso aberto editor

Outras publicacións en: International Review of Economic Policy: Revista Internacional de Política Económica

Obxectivos de Desenvolvemento Sustentable

Resumo

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.

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Fonte de datos: Dialnet