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Federative Republic of Brazil - Social Insurance and Labor Supply : Assessing Incentives and Redistribution

Autor: Banco Mundial
Año: 2009
Resumen: This technical report analyzes the potential effects of the pensions and income protection systems on labor supply decisions and through this channel the coverage and cost of the programs. The report addresses five policy questions: (i) how is the pension system influencing decisions regarding entry into the labor market, sector choice (formal/informal), and retirement? (ii) How are current income protection programs affecting turnover; job search efforts and sector choice?; (iii) Are there interactions between the two systems that aggravate or mitigate incentive effects?; (iv) What is the role of redistributive policies in determining observed outcomes?; and (v) Are there policy interventions that could be considered to correct incentives, while securing adequate income protection for different population groups (including workers in the informal sector)? The report is organized in three sections. This first section discusses the motivations for the study and sets the context by briefly describing some key stylized facts about the Brazilian labor market. The focus is on the composition of the labor force, its distribution by occupational categories, unemployment risks, and transitions between employment states including workers flows between the formal and informal sectors. The second section analyzes the Brazilian social insurance system in terms of incentives and redistribution. It starts with an overview of institutional arrangements, programs, and financing mechanisms, which flags the problem of a high tax-wedge. The report then analyzes the rules of the pensions and income protection systems and their potential effects on behaviors. The final section proposes a policy framework to guide reforms that could 'correct' incentives by making redistribution more transparent and progressive. A behavioral life-cycle model estimated for Brazil is used to illustrate how the application of this framework could affect contribution densities (and therefore the time spent working in formal sector jobs), retirement ages, savings, and programs cost. A companion policy note on social insurance and labor supply summarizes the main conclusions and recommendations from the analysis.

Fuente: Banco Mundial
Clasificación: Mercado Laboral
Tipo de Publicación: Informes
Idioma:

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Pension Reform in Southeastern Europe: Linking to Labor and Financial Market Reforms

Autor: MacKellar, Landis; Holzmann, Robert; Repansek, Jana
Año: 2009
Resumen: The reform of public pension systems and, more generally, the review of old-age income support are on the reform agenda worldwide. The reform discussion is more intense in countries where population aging is well advanced, including the member countries of the Organization for Economic Co-operation and Development (OECD), much of Latin America, China, Russia, and the former transition economies of Southeastern Europe (SEE). But developing countries in the global South are also awakening to the challenges of aging and old-age income support in view of changing family structures, urbanization, and migration. Over 80 percent of the increase in the numbers of persons age 65 and older up to 2050 will take place in countries with current per capita incomes of US$1,000 and below. Whereas the North grew rich before becoming old, the South risks becoming old before becoming rich. The remainder of the chapter attempts to substantiate this point. The next section briefly describes aging and its fiscal implications in the light of demographic developments in the countries of Southeastern Europe. There follows an outline of the drivers of pension reform that go beyond population aging and have to be understood when choosing among reform options. Subsequent sections take up recent international reform trends and lessons and underline key points concerning the labor market and financial market reforms needed to support pension reform. The chapter ends with some concluding remarks.

Fuente: Banco Mundial
Clasificación: Reformas de Pensiones
Tipo de Publicación: Libros
Idioma:

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Ex-Ante Methods to Assess the Impact of Social Insurance Policies on Labor Supply with an Application to Brazil

Autor: Zylberstajn, Helio; Robalino, David A.
Año: 2009
Resumen: This paper solves and estimates a stochastic model of optimal inter-temporal behavior to assess how changes in the design of the unemployment benefits and pension systems in Brazil could affect savings rates, the share of time that individuals spend outside of the formal sector, and retirement decisions. Dynamics depend on five main parameters: preferences regarding consumption and leisure, preferences regarding formal Vs. informal work, attitudes towards risks, the rate of time preference, and the distribution of an exogenous shock that affects movements in and out of the social security system (given individual decisions). The yearly household survey is used to create a pseudo panel by age-cohorts and estimate the joint distribution of model parameters based on a generalized version of the Gibbs sampler. The model does a good job in replicating the distribution of the members of a given cohort across states (in or out of the social security / active or retired). Because the parameters are related to individual preferences or exogenous shocks, the joint distribution is unlikely to change when the social insurance system changes. Thus, the model is used to explore how alternative policy interventions could affect behaviors and through this channel benefit levels and fiscal costs. The results from various simulations provide three main insights: (i) the Brazilian SI system today might generate distortions (lower savings rates and less formal employment) that increase the costs of the system and might generate regressive redistribution; (ii) there are important interactions between the unemployment benefits and pension systems, which calls for joint policy analysis when considering reforms; and (iii) current distortions could be reduced by creating an actuarial link between contributions and benefits and then combining matching contributions and anti-poverty targeted transfers to cover individuals with limited or no savings capacity.

Fuente: Banco Mundial
Clasificación: Seguridad Social y Sistemas de Pensiones
Tipo de Publicación: Documentos de Trabajo
Idioma:

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The Long and the Short of Emerging Market Debt

Autor: Opazo, Luis; Raddatz, Claudio; Schmukler, Sergio L.
Año: 2009
Resumen: Emerging economies have tried to promote long-term debt because it reduces maturity mismatches and the probability of crises. This paper uses unique evidence from the leading case of Chile to study to what extent there is domestic demand for long-term instruments. The authors analyze monthly asset-level portfolios of Chilean institutional investors (mutual funds, pension funds, and insurance companies) and compare their maturity structure to that of US bond mutual funds. Despite being thought to invest long term, Chilean asset-management institutions (mutual and pension funds) hold large amounts of short-term assets relative to US mutual funds and Chilean insurance companies. Short-termism is not driven by lack of instrument availability or tactical behavior. Instead, it seems to be explained by the desire to minimize inflation risk and, more importantly, by manager incentives that tilt demand toward short-term instruments. Extending the maturity of emerging market debt may require reducing risk and reshaping investor incentives.

Fuente: Banco Mundial
Clasificación: Fondos de Inversión
Tipo de Publicación: Documentos de Trabajo
Idioma:

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Bulgaria: Ensuring Pension System Sustainability

Autor: Banco Mundial
Año: 2009
Resumen: The report, Bulgaria: Ensuring Pension System Sustainability Pension Reform Policy Note was written in September 2009. The report states that the Bulgarian pension system has undergone significant and well designed reform in 2000-2003. However, attempts to restore financial self-sustainability of the pension scheme were not as successful as envisaged. Projections presented in this note suggest that recently introduced government contributions are insufficient to achieve financial sustainability and introduce growing distortions into the financing system. Additional reforms to the system will be needed to meet these challenges. Among the suggested reforms are; ensuring automatic sustainable pension indexation mechanism free of ad hoc interventions; attempting to further increase effective retirement age by reviewing early retirement rules and eliminating gender differences in retirement ages. A continued slow increase of retirement ages for both genders should also be considered; further strengthen disability certification processes to respond to likely increase in disability claims due to the economic downturn; strengthen long term financial planning, including revision of contribution rates which would be more compatible with long-term fiscal sustainability, and consider an exit strategy for formalized Government contribution to the scheme.

Fuente: Banco Mundial
Clasificación: Reformas de Pensiones
Tipo de Publicación: Notas de Pensiones
Idioma:

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