1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Improving the pension system and the welfare of retirees in Israel

Israel is a young country with still dynamic population growth, but it is already beginning to face the consequences of population ageing. The pension system relies largely on mandatory private retirement saving, which will moderate the long-term fiscal impact. Yet, there are questions about the fairness of the pension system, given the regressive nature of some of its tax provisions, its ability to effectively protect the most vulnerable elderly, whose poverty rate is high, as is the case for the rest of the population, and its efficiency in securing and valuing these retirement savings to guarantee pension adequacy. This review examines ways forward for policy to address these issues by reinforcing the protective role of basic pensions, by encouraging people to work longer and by improving the fairness and effectiveness of the system’s second pillar. This Working Paper relates to the 2016 OECD Economic Review of Israel (www.oecd.org/eco/surveys/economic-survey-israel.htm).

English

Keywords: ageing, pension system, defined contribution, retirement age, elderly poverty
JEL: J26: Labor and Demographic Economics / Demand and Supply of Labor / Retirement; Retirement Policies; J14: Labor and Demographic Economics / Demographic Economics / Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination; J32: Labor and Demographic Economics / Wages, Compensation, and Labor Costs / Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions; H75: Public Economics / State and Local Government; Intergovernmental Relations / State and Local Government: Health; Education; Welfare; Public Pensions; H55: Public Economics / National Government Expenditures and Related Policies / Social Security and Public Pensions
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