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Italy / Opting Out: A Choice of Freedom for Future Pensioners

Anno XXXIV, n. 148, gennaio-febbraio 1999
Centro Einaudi


Testo disponibile solo in lingua inglese.
In the debate on the reform of the social security system, it is possible to identify three areas of widespread consensus: 1) the long-term financial untenableness of the present public pay-as-you-go system; 2) the need to eliminate the distortions and disincentives which it induces; 3) the superiority of a system based on three pillars (public pay-as-you-go, category pension funds, individual accounts). There is, however, a great deal of disagreement over the corrections that need to be made. The author discusses the various proposals that have been put forward and assesses them critically. She suggests that an immediate and total privatisation of social security in Italy would be impracticable and argues that a quota of public social security benefits ought to be used with a redistributive function. The solution she proposes is the gradual introduction of "opting out" mechanisms, which would ensure more freedom for individuals and greater efficiency for the system.

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