Retirement age, immigration or pension benefits ? An applied general equilibrium evaluation of a pension reform in an ageing context (the Italian case)

Most European countries have recently introduced pension system reforms to face the financial problem related to population ageing. Italy is no exception: reforms introduced during the Nineties are generally thought not sufficient to adequately face the population ageing problem. The Berlusconi government has recently introduced a new reform that increases the retirement age. Using an applied overlapping-generations general equilibrium model with endogenous growth due to human capital accumulation, we analyse the impact of this reform on the macroeconomic system and in particular on the pension system. Then, we evaluate the impacts of complementary reforms an immigration policy and the reduction in pension benefits that could be set up in order to achieve the lung-run equilibrium of the pension system. Though the case under study is Italy, the analysis is obviously of interest for other European economies. JEL Classification: D58, H55, J10.