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The FPB’s studies cover 11 main themes: Energy, Environmental economic accounts and analyses, International economy, Labour market, Macroeconomic forecasts and analyses, Public finances, Sectoral accounts and analyses, Social protection, demography and prospective studies, Structural studies, Sustainable development, Transport.

Financial developments for social protection



What are the consequences of the AWG 2018 projections and hypotheses on pension adequacy? Simulations for three EU member states [19/07/2018]

In preparation of the 2018 Pension Adequacy Report by the European Commission and the Social Protection Committee, teams from Belgium, Sweden and Italy use their microsimulation models to simulate the possible developments of pension adequacy while taking into account the set of economic and demographic projections developed by the AWG. The results of this exercise complement the AWG simulations of pension expenditures in a context of demographic. The results described in detail in this report were summarised in section 5.1.2. of the 2018 Pension Adequacy Report

Modelling unobserved heterogeneity in distribution : finite mixture models of the Johnson family of distributions [30/11/2017]

This paper proposes a new model to account for unobserved heterogeneity in empirical modelling. The model extends the well-known Finite Mixture (or Latent Class) Model by using the Johnson family of distributions for the component densities. Due to the great variety of distributional shapes that can be assumed by the Johnson family, the method does not impose the usual a priori assumptions regarding the type of densities that are mixed.



Within the short-term and medium-term macroeconomic outlooks, the financial flows related to social security are handled in detail, consistent with employment policy (see ‘Labour market’) and alternative financing of social security. The most recent government measures are also taken into account.

In the context of population ageing (see ‘Population’), the FPB draws up long-term financial outlooks for the social protection schemes within the overall topic of public finances. In these projections, the development of socioeconomic behaviours, the number of beneficiaries of social allowances and the corresponding amounts – which themselves react to the dynamics of salaries and career evolution – are followed closely. The assessment of public spending on health care differentiates between expenditure on acute care and expenditure on long-term care. The long-term studies, which are based on macroeconomic and social policy assumptions, show the developments of public finances, budget deficits or surpluses.

Methods and instruments

  • Social security modules have been developed within the macroeconomic models MODTRIM, HERMES and HERMREG; they are supplied with a detailed exogenous analysis of social payments.
  • On the basis of the population projections (see “Population projections” in WP 7-06), the results of the different peripheral models quoted below – with respect to specific socioeconomic behaviours and to pension and health care expenditure – are fed into the long-term model, MALTESE. This model provides a projection of all principal determinants of the long-term evolution of the expenditure on social protection within the overall framework of public finances (see MALTESE in WP 7-06).
  • The MALTDEMO model is used to assess the future evolution of education and participation rates, while the HORBLOK model provides a projection of the number of pensioners in the different statutory pension schemes (see ‘Socio-demographic models’ in WP 7-06).
  • The future pension amount is examined in separate models governed by specific calculation rules: PENSION for the employees’ scheme, MOSES for the self-employed scheme and PUBLIC for the civil servants’ pensions (see ‘Social protection models’ in WP 7-06).
  • Public spending on health care is assessed using two models: an econometric model showing real acute expenditure per capita in function of specific determinants, and a macro-projection model for long-term care expenditure, which is mainly affected by ageing.

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