Leonardo Calcagno - A microsimulation model for social security in Argentina (MISSAR): pension projecting in a high inflation framework

  • Presenting author: Leonardo Calcagno (Auditoría General de la Nación, Argentina)

  • Authors: A microsimulation model for social security in Argentina (MISSAR): pension projection and ex post reform evaluation in a high inflation framework

  • Session: B03C - Inflation [1] - Tuesday 14:00-15:30 - Senate Hall

Argentina has a pay-as-you-go public pension and a family benefit systems, both run by ANSES, which boast near-universal coverage despite high levels of labour informality. The system has undergone various contradictory reforms since 2015, affecting in particular pension indexation, a crucial variable in a country with triple digits yearly inflation figures; and access to a pension for the elderly with incomplete careers, including through a pension moratorium approved on March 2023. Existing actuarial models are scarce, done either by international agencies or individual researchers; they tend to ignore inflation and changes in informal labour, and are not up to date with the various reforms. This paper presents an application of the dynamic Microsimulation model for Social Security in Argentina (MISSAR). Developed on LIAM2 as part of my PhD thesis, open-source and using only public data, it projects ANSES income and expenditure at the individual level, with varying legislation and economic projections. This model has been used to simulate the sustainability and distributive impact of a hypothetical permanent universal income in Argentina in a previous paper. The present paper uses the MISSAR model to project the economic sustainability, benefits adequacy and tentative distributive impact of Argentina’s social security with the current legislation across various economic, and most crucially inflation, scenarios; it then compares, all other things being equal, the results with those that would had been obtained with the legislation left by the previous Fernández (2007-2015) and Macri (2015-2019) administrations. This paper introduces a tool that can be updated, adapted and used for ex-ante pension reform evaluations, in a context where both the ongoing Extended Funds Facility plan signed with the IMF and the lack of consensus on the desired extent and funding of social security, make further reforms likely during the next administration, starting on December 2023.