Effects of the Public Sector downsizing on Social Security and public finance

Abstract

This paper presents the results of the actuarial valuation method Projected Unit Credit (“benefits/years of service”) in order to assess the effects of the public sector downsizing on real economy and social security in Greece, using a prototype data set. We found a social security loss of about 1.3 bn.€, and the effect on the GDP is estimated -13.6 bn.€ (or -7%). We also report a decrease in the direct income by 6.1 bn.€.
JEL classifications: C58; H55.
Keywords: Projected Unit Credit Method, Public Sector Downsizing, Pensions, Social Security