Welfare Reform Research Articles

Pension Reform: Conceptual Foundations and Practical Challenges

Pension Reform: Conceptual Foundations and Practical Challenges

Pension reform as a catalyst for rising social tensions in France

In March 2023, social tensions sharply escalated in France. The main trigger for mass street protests was the pension reform initiated by President E. Macron. The author analyzes these events and their consequences for political processes in the country.

'Logics of Redistribution' under Welfare Reform: The Case of Welfare for Families with Children

'Logics of Redistribution' under Welfare Reform: The Case of Welfare for Families with Children

Welfare Reform and Migrant’s Long-term Labor Market Integration

Welfare Reform and Migrant’s Long-term Labor Market Integration

Welfare Reform and Migrant's Long-Term Labor Market Integration

Welfare Reform and Migrant's Long-Term Labor Market Integration

PROSPECTS FOR THE USE OF INTERNATIONAL EXPERIENCE IN IMPROVING THE PENSION SYSTEM OF THE REPUBLIC OF UZBEKISTAN

The article deals with the evaluation of pension systems in the light of existing and recognized by leading economic scientists static indicators on a global scale: demographic load, replacement rate, government expenditures on pension payments, assets of the pension system, the efficiency of the pension system. Practical results of the experience and reforms of pension systems of foreign countries, mainly OECD countries, were taken as the initial data of the analysis. Developed recommendations and proposals for the possibilities of improving the pension system of the Republic of Uzbekistan at the level of modern requirements.

Analiza rada dobrovoljnih penzijskih fondova u Srbiji u 2022. godini

The topic of this paper is the analysis of voluntary pension funds in Serbia in 2022 with the emphasis on the return rate. Introduction of private voluntary pension funds together with the state pension fund is the essence of the pension system reform, and that reform process began in 2005. Generally accepted pension system is a three-pillar system, but introduction of the second pension pillar in our country will not happen anytime soon, and the question is whether it will be introduced at all. The third pillar of the pension system is voluntary and this is its greatest advantage. Voluntary pension system consists of three interconnected processes: payments to the voluntary pension fund, investment of free funds, and programmed payments - pensions. In order to form a valid investment portfolio and achieve a long-term and good return from investments there must be a stable inflow into voluntary pension funds.

ПЕНСИОННАЯ РЕФОРМА: ПРЕДВАРИТЕЛЬНЫЕ РЕЗУЛЬТАТЫ И ОЦЕНКА ИХ ВЛИЯНИЯ НА ЭКОНОМИЧЕСКОЕ ПОЛОЖЕНИЕ СТАРШИХ ВОЗРАСТНЫХ ГРУПП НАСЕЛЕНИЯ

The object of the study is the older age groups of the population (55+), their socio-economic status, and employment in the context of the pension age reform ongoing in the Russian Federation. The purpose of the paper is to study world experience, the consequences of the Russian pension reform of 2018, and its impact on the finances of the Pension Fund, the income and employment of pensioners, to substantiate the connection between raising the retirement age and the increasing demographic burden on citizens of working age, with the aging of the population, the increase in average life expectancy, verification of previously made predictions. Based on statistical data, the author made an attempt to assess the motivation of authorities in countries around the world and the Russian Federation for institutional changes in the situation of the older generation, as well as the consequences of raising the retirement age and the transformation of the employment status of this socio-economic group. During the research, methods of correlation and regression analysis of scientific literature, regulations of the ILO and the Government of the Russian Federation, statistical data of the UN, and the Federal State Statistics Service (Rosstat) were used. The results of the paper indicate that the current level of pensions in the country is insufficient and it lags significantly behind the “replacement coefficient” of lost wages recommended by the ILO, taking into account international experience, and also “confirms the inevitability of raising the retirement age in the coming years in the context of demographic changes and economic needs of society. Conclusions are drawn about the importance of constantly monitoring the situation of the population aged 60+ in the labor market, the implementation of previously adopted strategic documents on their social support and increasing the level of their pension provision, as well as the fact that today it is very difficult to predict the demographic and social-economic situation in Russia in the coming years.

The Impact of Pension Reform on Employment, Retirement and Disability Insurance Claims

The Impact of Pension Reform on Employment, Retirement and Disability Insurance Claims

The distributional effects of the pension system reform in Poland

Abstract This paper quantifies the effect of Poland's 1999 pension reform on the inequality of future pension benefits. The reform increases inequality, both in the upper and lower parts of the distribution. The estimates, based on the 2012 Polish Household Budget Survey, show that the Gini coefficient reaches 0.27 once the full effect of the reform has materialized. Had the pre-reform system continued unchanged, the Gini coefficient would not be >0.19. The increased inequality of pension benefits is the result of the system gradually moving from a more redistributive defined benefit pension system to a system in which benefits are strongly linked to earnings. We show to what extent minimum pension benefits mitigate the increase in inequality under different scenarios.

Медико-демографические показатели населения старше трудоспособного возраста в условиях пенсионной реформы в Российской Федерации

Purpose of the study. Based on the study of medical and demographic indicators and analysis of the incidence of the population, develop recommendations for the health protection of the population older than working age in the context of the transition to pension reform. Materials and methods: sociological, statistical, direct observation. The materials of the Federal State Statistics Service and statistical materials of the TsNIIOIZ of the Ministry of Health of Russia for 2012–2021 were used. Results. The mortality rate of the population older than working age in the Russian Federation (2020) amounted to 4408,1‰oo, the total population – 1460,2‰oo, in the federal districts of the Russian Federation the indicators fluctuated 1,2 times: from 3818,7‰oo in the North- Caucasian Federal District to 4638,6‰oo in the Volga Federal District, in the subjects of the Russian Federation the difference is 3 times. The indicator of primary morbidity of the studied contingent in the Russian Federation (2020) was 57041,4‰oo, in the Federal District the difference in indicators is 1,25 times, in the constituent entities of the Russian Federation – 3,9 times. The incidence of COVID‑19 in 2020 was 4373,9‰oo, in the Federal District the difference in indicators is 2,2 times, in the subjects of the Russian Federation it is large – 10,6 times, which allows us to conclude that the coding of COVID‑19 is ambiguous. Comparative analysis of the primary incidence of the study population by disease classes in 2019 and 2020 showed an increase in the indicator by 8,9% due to respiratory diseases by 40,8%, the incidence of COVID‑19 in 2020 was 4357,6‰oo. In all other classes, the indicators decreased as a result of a decrease in dispensary and preventive work. During the period of analysis in people older than working age, the increase in the primary morbidity rate is higher – 8,9% than in the total population – 5,7%, which indicates the need to strengthen dispensary and preventive work with the older population. The article gives recommendations on the health protection of the population older than working age.

Why the increase in the retirement age will lead to more inequality and poverty? An ignored fairness problem

In this study, we show with the help of a simple model that an increase of the retirement age has a negative impact on the distribution of pension benefits in the Bismarckian as well in the Beveridgean pension system. In both systems, the distribution of pension benefits will change in favour of high-income earners. Additionally, we show that the increasing gap in the life expectancies of low and high-income earners will increase inequality. Both results are a consequence of the positive relationship between the socio-economic status and life expectancy of a person. These important insights are often ignored by the promoters of pension reforms.

Effects of Unfunded Pension Reform on Economic Growth Under Endogenous Retirement

Effects of Unfunded Pension Reform on Economic Growth Under Endogenous Retirement

The Impact of Pension Reforms on the Sustainability of Pay-as-You-Go System in Hungary: Theory and Policy

The Impact of Pension Reforms on the Sustainability of Pay-as-You-Go System in Hungary: Theory and Policy

The 2022 Greek pension reform: The rebirth of carve‐out privatization in Eastern Europe

AbstractAfter a decade of unprecedented austerity, Greece abruptly changed the course of pension consolidation in 2022 and implemented the controversial carve‐out pension funding approach, whereby a portion of existing pay‐as‐you‐go (PAYG) contributions are diverted to fund individual pension savings, thus undermining the financing of existing PAYG pensions. Although inspired by the World Bank’s 1994 pension privatization blueprint, the Greek 2022 reform features a major policy shift by entrusting the management of individual pension savings to a dedicated government body, ostensibly to try to remedy inherent market failures in private pension provision. Like earlier reforms in Eastern Europe, the multi‐decade transition costs of carve‐out funding have been vastly underestimated in Greece, which will give rise to fiscal distress in the coming years when annual transition costs become sizeable and favourable international financing terms start to change. Unless firm political commitment is established to implement the measures necessary to finance the transition costs, Greece may have to resort to reform reversals similar to those already implemented across Eastern Europe.

Retirement Choices in Italy: What an Option Value Model Tells Us

Using Italian data this study estimates the option value model in order to quantify the effect of financial incentives on retirement choices. As far as we know, this is the first empirical study which estimates the conditional multiple-years (CMY) model put forward by Stock and Wise (1990). This implies that we have accounted for dynamic self-selection bias. For the subsample of females the CMY model yields plausible estimates of the preference parameters such as the marginal utility of leisure. This last parameter is typically underestimated if one does not take into account the self-selection problem. From our results it becomes clear that dynamic self-selection results in a considerable downward-bias in the estimate of the marginal utility of leisure. We also performed a simulation study to gauge the effects of a dramatic pension reform. It turns out that the underestimation of the marginal utility of leisure translates into a sizable overprediction of the impact of the reform. For males we also obtain plausible estimates. The results for males should be interpreted with caution because we are not able to fully correct for dynamic self-selection bias.

Spatial heterogeneity in welfare reform success

Spatial heterogeneity in welfare reform success

Formation of the Pre-Pensioner Segment in the Labor Market: Financial and Management Aspects

The article considers the results of the implementation of the pension reform in Russia in 2018, reflected in changes in labor market indicators according to Rosstat. The purpose of the study is to develop a scientific understanding of the processes of formation of the pre-pensioner segment of the Russian labor market under the influence of its external and internal factors. The authors use methods of statistical, correlation, and regression analyses, the calculation of the average for a certain integral of functions, as well as the method of linear modeling of multiple regression. The study assesses the scientific elaboration of the research topic abroad and in Russia. The issues of financial literacy of the population are analyzed. The financing of the training of pre-retirees in the professional competencies that are currently in demand on the labor market and support for unemployed pre-retirees who are registered with the employment center are considered. The selection of relevant demographic data and a sample labor force survey by age group has been carried out. The total number of pre-pensioners in 2018–2020 has been calculated and their structure according to the status of labor activity in the Russian labor market has been identified. The general dynamic, structural, and gender characteristics of the economic activity of pre-pensioners in the labor market are analyzed. The demand for pre-retirees by type of economic activity in 2019 is assessed. The authors conclude that there is a tendency to reduce the share of the pre-pensioner segment in the labor market after reaching the project retirement age threshold from 10.88% to 9.76%. The employment rate in this group of the population will be 66%. The study has established that the demand for pre-pensioners by type of economic activity in the labor market is 1.13 times higher for women than for men. A methodical approach has been developed to analyze the results of assessing the demand for state support measures by pre-pensioners. The article analyzes the influence of financial and social measures of state support for pre-pensioners on increasing their labor activity and competitiveness in the labor market. The results of the study can be used by the authorities to substantiate the assessment of the effectiveness of financing the measures they take to provide social and economic support to pre-retirees.

David A. Robalino, et al. (eds.). Pensions in the Middle East and North Africa: Time for Change. Washington, D. C.: The World Bank, 2005. pp.xxviii+253. Price not given.

This report by David A. Robalino, et al. on Pensions in the Middle East and North Africa: Time for Change evaluates the current mandatory pension systems formulated in the 1970s in the region. Since the publication of Boersch-Supan Palacios and Tumbarello (1999), cited in the volume, the Word Bank has been providing technical assistance to the countries of the region in the area of pension reforms. According to Schwarz and Demirguc-Kunt (1999), also cited in the volume, more than 60 countries have introduced pension reforms in the last 20 years. The financial problems and the fiscal burden of these generous schemes was the common motivation for the reforms undertaken. The present book by David Robalino and his co-authors is the extension of those previous works published five years ago.

Феномен социальной апатии и его актуальность в современной России

The article is devoted to the analysis of the phenomenon of social apathy in the modern Russian realities. Despite the prevalence of the term “social apathy” in the assessment of the current state of the Russian society, there is still no consensus as to whether apathy boils down to rejection of the socio-political sphere or implies broader interpretations — the dominance in the society of an orientation towards minimizing activities, or even loss of faith in the value of the present day (except family and immediate relatives and friends). The key problems in using the concept of social apathy are the lack of a proven scientific methodology for applying the concepts of individual psychology to the collective, mass states, as well as the historically unambiguously negative attitude towards apathy as a vice, deviation, laziness, which makes it difficult to fully comprehend this phenomenon. The article outlines key approaches to explaining social apathy in the modern Russia, revealed in the course of the research project “The Phenomenon of Social Mobilization as the Antipode of Social Apathy”, carried out by the Petersburg Politics Foundation jointly with the “Insomar”, the Institute for Social Marketing, in the second half of 2021. Possible reasons for social apathy include purposeful actions of the authorities, spontaneous reaction of citizens to the activities of politicians, anxiety about the future against the backdrop of the weak attractiveness of the present, the collapse of paternalism in the face of a shortage of tools and skills for living without the help of the state, and the unresolved internal conflicts. The authors reconstruct the main interpretations of the triggers of the current cycle of apathy, such as the economic changes of the 1990s, the failure of the “Medvedev thaw” and the pension reform of 2018, the consequences of which were exacerbated by the COVID-19 pandemic. Based on the results of an expert survey and focus groups, the authors delineate hypothetical scenarios for overcoming social apathy and possible directions for the development of the public sentiments, and formulate a number of recommendations for managing political risks, taking into account possible social dynamics.