SOBRE A NECESSIDADE DE REFORMA DA PREVIDÊNCIA

Abstract

The subject matter of this paper is to verify whether the recent constitutional reform was necessary to save the Brazilian social security system. The evaluation is based upon two mathematical models, each representing alternative systems of social security usually treated in the economic literature on the subject: “pay as you go” and “capitalization”. The results of the evaluation suggest that the old rules were adequate to garantee the viability of the system. Thus, it seems that the true goals aimed by the proponents of both the reform already approved and others to be presented this year were not explicitly stated. Finally, the paper also suggests that the “pay as you go” system seems better for Brazil than the “capitalization” one. The reason for this preference is due to the fact that the first one allows income redistribution.