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De Economist

, Volume 161, Issue 2, pp 175–197 | Cite as

Crisis and Pension System Design in the EU: International Spillover Effects Via Factor Mobility and Trade

  • Igor Fedotenkov
  • Lex Meijdam
Article

Abstract

Many European Union states have adjusted pension benefits or reformed the pension system in reaction to the recent economic crisis, while other member states have postponed this type of adjustments. In this paper we study to what extent countries that responded quickly to the crisis are harmed by the lingering in other member states via international spillover effects caused by factor mobility and trade. We show that this depends crucially on the degree of labour mobility in the short run. In fact, countries with more flexible pensions can benefit from the inflexibility of pensions in other countries if they can temporarily limit immigration.

Keywords

Crisis Spillovers Social security International trade Factor mobility 

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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Department of EconomicsVerona UniversityVeronaItaly
  2. 2.Department of Economics, CentER, and NetsparTilburg UniversityTilburgThe Netherlands

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