bu ali sina university Journal of Applied Economics Studies in Iran 2322-2530 14 56 2026 01 21 Impact of Government Debt Settlement on the Financial Sustainability of the Social Security Organization and Macroeconomic Variables in a DSGE Model Impact of Government Debt Settlement on the Financial Sustainability of the Social Security Organization and Macroeconomic Variables in a DSGE Model 203 243 6245 10.22084/aes.2025.30172.3741 FA Mohammad Hosein Mardi PhD Candidate in Economics (Econometrics/Finance), Department of Economics, Faculity of Economics, University of Tehran, Tehran, Iran. 0009-0002-9423-8900 Ali Souri Associate Professor, Department of Economics, Faculity of Economics, University of Tehran, Tehran, Iran (Corresponding Author). 0000-0002-9153-2277 Homa Esfahanian Assistant Professor, Department of Economics, Faculity of Economics, University of Tehran, Tehran, Iran. 0000-0002-9778-2023 Journal Article 2024 11 23 The Social Security Organization is the only major fund in the country with the lowest share of governmental support. This highlights the need for careful attention to the organization’s revenues and expenditures. On the other hand, one of the most pressing challenges in the country today is the financial issues of pension funds, which manifest as a deficit of resources compared to expenditures. If not addressed, this issue could significantly impact the entire economy. In the present study, efforts will first focus on addressing, through actuarial models, how the financial sustainability of the Social Security Organization would change with increased government contributions. Subsequently, the organization’s financial sustainability will be evaluated within a dynamic stochastic general equilibrium (DSGE) framework. Finally, the outputs of these two models will be compared using data from 2016 to 2022. The findings indicate that a government expenditure shock increases financial sustainability in the actuarial model, as it boosts the Social Security Organization’s revenues. Consequently, the current value of the organization’s assets relative to its updated obligations improves. However, the DSGE model reveals that the updated value of the organization’s assets undergoes minimal changes. This is due to labor market disruptions, including reduced willingness to work and increased wages. Moreover, the updated obligations of the fund decrease, leading to improved financial sustainability, though this improvement is less pronounced than in the actuarial calculations. Ultimately, it can be concluded that government debt settlement with the Social Security Organization has a positive effect on its financial sustainability. The Social Security Organization is the only major fund in the country with the lowest share of governmental support. This highlights the need for careful attention to the organization’s revenues and expenditures. On the other hand, one of the most pressing challenges in the country today is the financial issues of pension funds, which manifest as a deficit of resources compared to expenditures. If not addressed, this issue could significantly impact the entire economy. In the present study, efforts will first focus on addressing, through actuarial models, how the financial sustainability of the Social Security Organization would change with increased government contributions. Subsequently, the organization’s financial sustainability will be evaluated within a dynamic stochastic general equilibrium (DSGE) framework. Finally, the outputs of these two models will be compared using data from 2016 to 2022. The findings indicate that a government expenditure shock increases financial sustainability in the actuarial model, as it boosts the Social Security Organization’s revenues. Consequently, the current value of the organization’s assets relative to its updated obligations improves. However, the DSGE model reveals that the updated value of the organization’s assets undergoes minimal changes. This is due to labor market disruptions, including reduced willingness to work and increased wages. Moreover, the updated obligations of the fund decrease, leading to improved financial sustainability, though this improvement is less pronounced than in the actuarial calculations. Ultimately, it can be concluded that government debt settlement with the Social Security Organization has a positive effect on its financial sustainability. https://aes.basu.ac.ir/article_6245_c783eed3cfc1c978fe76e15af007e0d0.pdf