Abstract
We study a potential rearrangement of the social security contributions that could ease the weight of the state as well as contribute to the economy’s growth. We investigate an approach that could fund the benefits promised through a pay-as-you-go scheme, by splitting the contribution made per individual in two parts; one that funds the difference between the liabilities and the assets for a certain period of time, and another that is directed to a funded scheme. After the predetermined time period, the full contribution goes to the funded scheme, which is anticipated to grow so that it will alleviate the burden of the state and will simultaneously allow the reinvestment of the accumulated funds. Such a reinvestment will return value, as the funded pension scheme will invest in state or corporate bonds and equity, of even small and medium enterprises, therefore contributing to the economy’s growth.
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Acknowledgments
This research has been co-financed by the European Union (European Social Fund—ESF) and Greek national funds through the Operational Program "Education and Lifelong Learning" of the National Strategic Reference Framework (NSRF)—Research Funding Program: THALES. Investing in knowledge society through the European Social Fund.
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Poufinas, T., Kouskouna, E. (2016). Rearranging Social Security Contributions: Alleviating the Burden of the State and Returning Value to the State and Society. In: Petrakis, P. (eds) A New Growth Model for the Greek Economy. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-58944-6_13
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DOI: https://doi.org/10.1057/978-1-137-58944-6_13
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