The sustainability of the social security system: a comparison between Italy and Spain

Abstract

The sustainability of the social security system remains one of the most important items on the agendas of European decision-makers. The importance of the subject arises from its decidedly interdisciplinary nature. This paper is based on empirical evidence and proposes a synthesis between economic-financial and social evaluation, political implementation, and vision of society. Based on the evolution of demographic data, the paper proposes an analysis of sustainability not only linked to an indicator, but in the broader perspective of which social structure is inspiring the reforms of the European social protection system. With regard to the pension system, the article focuses on the transition from a pay-as-you-go system to a contributory system. The first, based on an intergenerational pact, made it possible to overcome the inevitable inefficiencies of the labour market, especially in countries where wages depend on a combined effect of income and family education. The second, under the link of sustainability, is based on the hypothesis of an efficient operation of the system, free from imperfections that influence salary dynamics, where the generational pact is broken.