Institutional moral hazard in the multi-tiered regulation of unemployment in Australia

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1 Institutional moral hazard in the multi-tiered regulation of unemployment Australia – Background paper Chris Luigjes & Frank Vandenbroucke December 2015 This document reflects views only authors and European Commission cannot be held responsible for any use that may made information contained therein Please refer to this as follows: C F (2015) support ‘Institutional Moral Hazard Multi-tiered Regulation Unemployment Social Assistance Benefits Activation – A summary eight country case studies’ Abstract has been written preparation a research project funded by (on Feasibility Added Value Benefit Scheme contract VC/2015/0006) adds detailed analysis following deliverable project: studies; but it was not We concept ‘institutional hazard’ analyse intergovernmental relations within welfare states specifically domain unemployment-related benefits related activation policies (the ‘regulation unemployment’) is one separate studies focuses on The Australian involves two federal departments Public Employment Services (PES) private agencies gradually privatised major benefit Reforms moved system away from ‘black box’ approach towards more minimum requirements monitoring control those experience suggests trade-off between need hand flexibility processes other Keywords: hazard; states; relations; insurance; social assistance; Active Labour Market Policies; activation; policy; 2 List Abbreviations AAS Annual Assurance Statements APM Participation Model BMA Bilateral Management Agreement CES Commonwealth Service DE Department DEEWR Education Workplace Relations DHS Human EPP Pathway Plan FaHCSIA Families Housing Community Indigenous Affairs JSA Job JSKA Seeker Account KPIs Key Performance Indicators KPM Measures NSA Newstart Allowance JS search SA SSA Security Act SSAA Administration UI Insurance WfD Work Dole programme YA Youth Introduction bit an outlier our selection systems both concerning type way which delivered completely characterised managerial decentralisation opposed political present some measure or another cases we examine When comes schemes different most OECD countries sense (1) does have substantial assistance scheme (2) its single important flat-rate means-tested near universal terms eligibility (Davidson Whiteford 2012 pp 8 13-14) Australia’s foremost labour market marginal All fall under categories: pensions allowances (OECD 149-150) are financed general (federal) government revenue Pensions often consist higher generally require little no because they targeted at groups unable work On include intended who able level holds responsibilities greater (financial) powers than (or ‘Commonwealth’) historically collected bulk tax revenues through can exert considerable influence “vertical fiscal imbalance” perhaps cause strong horizontal balance found Australia; country’s equalisation strongest all federations (Castles Uhr 2005 p 60) In practice delegation takes form extensive privatisation delivery During 1990s first started experimenting with resulted ALMP 3 certainly examined There such turn entails there also institutional since insurer-insured relationship conceivable Instead perverse incentives mostly arise out principal-agent relationships 4 Historically well means- asset-tested 1991 (JA) (NSA) replaced former JA applied young mature unemployed individuals had less 12 months while introduced long-term Finally 1996 were combined into still called short period ended 1998 introduction (YA) persons age 22 recent pieces legislation (SSA) 1999 (SSAA) already 1988 special 40 000 clients See part 11 subdivision scope are: being having right (22 above) remaining active seeking employment For reason last-resort 157) Figure strictness quite strict overall context (Langenbucher 2015) due availability during participation ALMPs occupational mobility (3) frequency (Figure 2) These items result high scores job-search However sanctioning regime comparison so last resort withholding severe sanctions repeat offenders seen punitive counterproductive 29-30 102 159) Overall criteria Source: Langenbucher 27 5 Strictness 0 6 Average administration initially responsibility (DE formerly DEEWR) however involving contact jobseekers disbursement done Centrelink agency currently (DHS) inter-agency cooperation further elaboration three key actors latter now falls authority always enacted 1997 arm’s length payments services It serves initial point Initially reimbursed (then called) (FaHCSIA) operations 2009 2010 directly budgets aforementioned departments; ‘partnership’ model purchaser-provider arrangement (Auditor General 2013 25-26) 2011 formally subsumed means funding flows performed partnership agreement enters agreements Ministry Agreements (BMAs) policy outcomes design setting approaches DHS/Centrelink implementation (cf Table appendix precise division responsibilities) “Under program appropriated reflected then Business Partnership adopting compliance oriented managing Centrelink’s service delivery” 26) Officially rate principal carer cares very large family foster children) home distance educator children their care here details supplements available beneficiaries Health Care Card Rent Family Tax miscellaneous 11-13) Some these built-in ‘welfare locks’ (Bodsworth 2010) Other disincentives stem fact indexed prices wages 29) 16 indexation 7 Parent Payment Disability Support Pension Such measures included gradual closing off Partner abolition Wife restriction regular Mature Age 9 LFS category caseloads probably actively almost half job search-exemptions would overlook significant caseload words closest proxy Furthermore opted smaller territories; geographical units represent over 98% population rates 561 80 AUD person dependent 468 partnered per fortnight low effective replacement even among similarly structured ranks lowest scoring 151) generous increases apply rather activation-tested 18; reforms partially aimed moving main (NSA YA) 39) individual each differently sized shows average highly populated whole 2000-2015; range just 4% capital territory 5% Tasmania Because process federally transfers Nonetheless structural differences do redistribution funds across state/territory Bureau Statistics Force could categorised assistance: above 2% 9) 10 will therefore forgo section effect functions covered 15 2000-20158 Activation11 covers focus Like United States types might sometimes rivals size divisions basis Although functional equivalent subjected Parenting Payments residual allowance (including benefits) principle subject same recipients classified Being multiple reasons receiving registered jobseeker: possible exempt meeting (being training combination part-time parents); sanctioned suspended 122) Additionally people volunteer jobseeker without Every exemptions (Department 2014 B 175-179) serviced Unemployment-related given much impetus mid-1980s mid-1990s when performance falter As early 1970s separated PES implemented (CES) experimentation programmes experimentations relevant seeds what later become fully-privatised Private community compete used implement shifted intensive abolished (Considine Lewis O’Sullivan 815) previously arm’s prominence Originally basic administrative network provided essence step full where operated agents rise after focused adjusting governance managerially decentralised relatively adapter New principles quasi-market mechanisms unchartered waters new tendering rating providers adjustment Further focussed standardisation hampering ‘quasi-market’ existed side-by-side time disappeared 2000 54) contractors contentious leeway granted tried negate created restricted operational freedom local reducing characterises Not According study ‘jobseekers’ either met approved activities temporarily incapacitated 154-156) number non-jobseeker explained (and strengthens view that) devolved administrated interaction must noted although officially participate voluntary (which satisfies requirement) ‘jobseeker’ 13 Compact ensured six paid everyone reached 18 expanded vocational (JOBTRAIN SkillShare) wage subsidy (paid) (JOBSTART Experiences) rising One impactful Working Nation elements: ‘consumer choice’ guarantee openings Compact) element entailed referred sector contracted partners competed competition raise efficiency “this undesired managers tended make referrals [guaranteed programmes] open market” 163) ran 1994 elements lasting legacy system: hallmark workfare acts default option But poignantly tension day began newly elected current institution designed quasi-independent; provide ‘basic services’ elaborate non-government 815; Davidson 18) (WfD) activity test Activity provisions amended enable voluntarily required condition retaining entitlement Allowance” guaranteed every activity-tested beneficiary consisted maximum satisfy principle: Mutual Obligation “This obligation ‘participate activity’ return payment benefits” After client commenced 6th month 14 requirement satisfied least hours week weeks relocation participating Intensive justified idea ‘consumer-choice’ chose own provider 70) Surveys reported “nearly quarter visited once twice” 224) 17 final round longer meant bi-annual comprehensive tender continual review Providers usage though Privatisation taken up notch “fully competitive 300 Network driven job-outcome-related broad determine provision” 62) function purchaser public (1998-2000) asked bids services: Matching Search Training reverse order intensity free choose divide enforce agreed-upon share By dividing second (2001-2002) took account price past mandatory levels change reaction evaluation signalled actually engage Additional changes third (2003-2009) (APM) contracts enter below requirements) integrated set entire clients; continuum certain steps (mostly interviews) tied fees; financing introducing (JSKA) earmarked specific deposited;18 finally 71) reactions side Mainly tendency try cherry pick favourable hard-to-place said “black-box supervision behaviour feedback about clients” “prescribed undertake interviews jobseeker” 72) earliest trying modify arose too unchecked 2007 along five (JSA) reform “one fits all” inflexible orientated disadvantaged groups; considered overly fragmented rhetoric perception streamlining tools controlling built around ‘streams’ 19 until four streams stream fourth markedly rest: (Personal Programme) attracted fees draw (EPP) interview predetermined 20 surrounded (increasingly detailed) classification assessing footnote 19) IT-system (EA3000) severely limited e g 820) (partially) Stream 21 Through formulates interventions based Streams Charter Contract together Communication Protocols accompanies formal legal bound Code Practice management infra) regulations amounted presented somewhat similar Denmark municipalities Danish central struggled balancing control; structures constant fairly place issues concerned dumping municipal involved regulating Classification Instrument (JSCI) score beginning determines applicable 110-111 discussion JSCI whether should create classify highest sign reclassification 80) despite eventually altogether 92) Besides changing Stream-structure move forward increase emphasis hands 2014) table Source 2014: 31 STREAM JOB COMPETITIVE specified VOCATIONAL ISSUES SERIOUS NON-VOCATIONAL via ESAt referral Seekers 30 Stronger Full capacity* capacity Initial Contact Comprehensive Interview Referrals jobs Identify strengths 0-6 Case Monthly contacts Self help Monitor Report non competitiveness address non-vocational 6-12 Phase 25hrs 15hrs cf plan 12-18 Cf Eligible Wage Subsidy (25 30s) subsidies group 30s 18-24 0-12

Pension reform as defined ambition

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Pension-reform-as-defined-ambition_Petroleumfederatie_30.3.2017

Pension reform as defined ambition Frank Vandenbroucke University of Amsterdam Seminar Belgische Petroleum Federatie – Fédération Pétrolière Belge Brussels 30 March 2017 • European Commission The 2015 Ageing Report Economy 3/2015 Belgian on Reform 2020-2040 www pensioen2040 belgie be pension2040 belgique Schokkaert Devolder Hindriks Towards an equitable and sustainable points system A proposal for pension in Belgium Discussion Paper Series 17 03 Department Economics KULeuven February Réforme des pensions légales: le système de à Regards Economiques numéro 130 Mars Het pensioen op punten: naar een nieuw sociaal contract tussen jongeren en ouderen Leuvense Economische Standpunten (forthcoming) 160 28 140 26 120 24 100 22 80 20 60 40 18 16 0 14 2020 2025 2030 2035 2040 2045 2050 2055 2060 Old age dependency ratio EU Total economic Life expectancy at 65 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022 2028 2031 2034 2037 2043 2046 2049 2052 2058 001 000 with constant life 12 10 8 6 4 2 Impact (no change coverage benefit labour market ratio) actual forecast (incl interaction) impact + 70 55 Public % GDP 50 45 35 BR2013 Benefit No all Pensions = managing uncertainty – by integrating adjustment mechanisms the Commission: indexing parameters systems to longevity (e g career requirements & retirement age) Options risk sharing Defined contribution Musgrave rule Fix… Contribution rate (net) Economic Risk workers Shared Demographic retirees ‘Conditional certainty’ individual citizen Stabilize (Musgrave Rule) Conditional macro demographic context choice (number points) x (value point) (actuarial corrections) (indexation income growth) Number <= Value point ≈ f (average employed) Premised a desirable replacement ‘standard worker’ ‘normal career’; career’ takes into account changes demography etc Positive / negative corrections (career) given social stratification entry healthy years Indexation (growth real incomes) flexibility Two objectives: Target stabilisation pensioners/employed Stabilisation rates earned average ratios ⇒ Postponing (flexibility but !) ‘Alternative’ funding (tax shift) Why funding? => diversification Law Supplementary 2003 ‘Democratization’ supplementary Sector approach: SME Embedded dialogue Mobility Guaranteed minimal return Requires large consensus Based sense common purpose: frankvandenbroucke uva nl

Réforme des pensions légales : le système de pension à points

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Institut de Recherches Economiques et Sociales REGARDS ECONOMIQUES • PAGE 1 La Commission réforme des pensions 2020-2040 a dans son rapport juin 2014 proposé une notre système pension vers un à points L’accord gouvernement du 11 octobre repris cette proposition 2 Depuis la discussion sur le report l’âge légal 67 ans en 2030 qui se trouvait marge occulté coeur concernait C’est dommage car ce visait justement déplacer centre gravité conditions d’âge carrière Le concept central d’un est celui d’une durée référence non plus âge uniforme Pour utiliser métaphore simple considère que kilométrage meilleur indicateur voiture pour décider s’en séparer Dans cet esprit normal départ déterminé base exigence générale début propre chacun On peut donc partir tôt si l’on commencé sa cela sans pénalité Si preste au-delà on reçoit supplément mesure où kilomètres au compteur reste moins longtemps réduite les raisons inverses Un autre enjeu important protéger Une publication économistes l’UCL Réforme légales : points* Mars 2017 Numéro 130 s’est engagé mettre place comme par 2020- 2040 Nous expliquons comment fonctionne flexibilité intégrer pénibilité métiers temps partiel discutons mécanismes pilotage face vieillissement l’évolution l’emploi Jean Hindriks * Les auteurs remercient Vincent Bodart Muriel Dejemeppe Pierre Pestieau leurs commentaires suggestions sont aussi redevables l’ensemble membres ont participé l’élaboration seuls responsables contenu erreurs éventuelles version détaillée disponible anglais Schokkaert Devolder Vandenbroucke (2017) «Towards an equitable and sustainable point system» CORE Discussion paper 2017/06 http://pension2040 belgium be/fr/ http://www premier be/fr/accord-de-gouvernement Erik Frank changements démographiques économiques (dont l’emploi) Comme indiqué graphique depuis 2003 dépenses évoluent rapidement cotisations sociales (sur période 2003-2015 augmenté deux fois vite sociales) Cela passe dépit Pacte solidarité entre générations (23 décembre 2005) réformes successives gouvernements Di Rupo 1er Michel décrochage soi résulter politique d’allègement charges avec financement alternatif promouvoir l’emploi Néanmoins recours n’est pas inépuisable d’ajustement équilibrés s’avèrent indispensables permet faire toute transparence contrat social robuste équitable demeure mystère certains d’interrogation d’autres allons tenter d’expliquer simplement Ensuite nous discuterons ses avantages existant bien comprendre considérons régime salariés proche actuel calculée moyenne salaires bruts (non revalorisés hors inflation) multipliée coefficient représente fraction (par complète) multiplie taux remplacement référence3 procède façon assez comparable calculer sauf remplacent applique corrections actuarielles Concrètement manière suivante Pendant Monsieur Paul accumule compte «points» prorata salaire brut annuel relatif moyen En exprimant relative ap- Graphique Evolution (retraite survie) (indice 100 = 1985) Sources Comptes Nationaux Bureau Fédéral Plan SPF Sécurité Sociale calculs propres Comment ? 0 50 150 200 250 300 350 400 450 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015 Dépenses totales (en indice 1985=100) Cotisations PENSIONS COTISATIONS 3 être complet varie selon situation familiale (isolé ou ménage) plique facto revalorisation automatique gagné hier même valeur qu’un aujourd’hui équivalent il obtient s’il 80 % 8 120 4 pendant complète après 45 années total acquérir travaillant et/ou gagnant obtenir périodes d’inactivité (chômage indemnisé maladie congé parental crédit-temps etc ) fictif Au moment retraite Mr euros conversion tout (ou partie) disponibles (1) (2) tous prise (indépendamment l’année ils été acquis) l’affilié assurer neutralité actuarielle calcul 5 mensuelle Pension Points x Valeur Point Coefficient égale ratio mensuel (43 exemple) multiplié cible fixée niveau assure qu’une personne fait obtienne (rapport moyen) égal 6 Il possible chaque année effet 110€ 2016 43 5×3100/43=35€ restent constants l’autre indexée croissance nominale (incluant l’inflation) forme correction l’écart effective termes implique malus travaille (anticipation normal) bonus (voir l’encadré page 5) Exemple travaillé 20 premières perçu 90 110 23 dernières accumulé (20×0 9) + (23×1 1) 35€ Sa 515€ Supposons maintenant souhaite reporter supplémentaire 44 gagne (si doit tenir plafond plancher d’acquisition Ces seuils indexés l’évolution vise garantir qu’en cas d’anticipation (relativement apportée compense exactement coût budgétaire l’Etat paiement longue l’annexe complémentaire d’avril propose Ce belgique be/docs/042015-annexe-3-fr pdf d’ancrage «contrat social» envers futurs pensionnés (supposons %) soit 02 35 7€ augmente (44 ans) supérieure 7 devient 3+1) (35€x1 02) (1 034) 628€ (soit augmentation 113€ mensuelle) note travailler triple supplémentaires élevé durant indexées soutenabilité capacités particulier contrainte l’exige l’indexation partielle (coefficient inférieur Analysons aspects importants grande gestion départs progressifs via d’intégrer cohérence tenant caractère évolutif d’organiser sortie progressive marché travail présenter inconvénients fin étude récente semble avoir encouragé anticipés indispensable adéquates (et généralement possibilité d’anticiper légale) crée terme beaucoup systèmes actuels prépension crédit contexte anticipée n’y d’équivoque statut s’agit l’individu jouit réelle liberté qu’il veut ne ‘disponible’ prépensions restriction l’activité professionnelle tant l’équité voici illustration tenu 63 prendre mi-temps 60 Compte décote sera 9 – (3×0 A 40 décide convertir moitié première (40/2) 630€ Cinq tard 65 définitive supposant ait lui (5×0 6) Voir l’encadré B Cockx M Van Der Linden L’emploi seniors Belgique quelles politiques quels effets UGent UCLouvain Politique scientifique fédérale recherche belspo be/belspo/fedra/proj asp?l=fr&COD=TA/00/44 passée 38€ dorénavant favorable (63 07 (2×0 seconde (40/2+3) 935€ 38/35 684€ totale somme 619€ consiste octroyer complémentaires l’exercice métier jugé pénible seulement période) afin compenser l’effet négatif Ainsi induit pourrait imaginer montant sorte neutraliser complètement autorisant avant subir perte compensation uniquement pénalise travailleurs s’orientent pénibles boutade qu’ils capables prévoir presque futur devons veiller doter mécanisme plusieurs variables Evidemment ces ajustements préjugent ad hoc variable prioritaire (notamment adapter l’augmentation l’espérance vie) veillant introduire compensations appropriées possibilités suffit rétablir l’équilibre financier faut ajuster cotisation sociale conjointement respecter partage charge l’effort actifs proposons règle stabiliser pouvoir d’achat (la proposée Richard Musgrave) démographique Formellement calculé vie effectif anticipe supérieur reporte l’exemple (20 Dénotons e(63) partie e(60) espérances e(63)/e(60) qu’à deuxième e(65) e(63)/e(65) courte ENCADRÉ Mécanismes Musgrave (1986) «A reappraisal of Financing Social Security» in Public Finance Democratic Society Vol New York Press contraction supporter dépendance économique10 suggère prestations définies (notre actuel) De contributions (le suédois italien allemand) intergénérationnel risques celle structurelle formule indépendants dépend transition revaloriser anciens prix neutralisant l’impact ajustement offrir équivalente nouveau l’ancien génération modalité affiliation successive Cette présente l’avantage «garantir» droits passés devoir Elle s’apparente projet carrières mixtes laquelle mixte combine différents régimes activité ancien rétrospectivement écoulée suit concerne inégalités trois (salariés fonctionnaires) cohérente convergences souhaitables décrites Pensions minimum cohérent y décrit ainsi dimension notamment principe sein ménage jean hindriks@uclouvain be pierre devolder@uclouvain erik schokkaert@kuleuven F I G Vandenbroucke@uva nl d’ajustement 10 économique population emploi) l’un pertinents réfléchir sécurité général) professeur d’économie senior fellow l’Itinera Institute chercheur (UCL) statistiques l’ISBA KULeuven l’Université d’Amsterdam quatre actuellement Conseil académique matière Regards Économiques IRES-UCL Place Montesquieu B1348 Louvain-la-Neuve www regards-economiques regard-ires@uclouvain tél 010/47 34 26 Directeur Rédactrice chef Comité rédaction Belleflamme Frédéric Docquier Marthe Nyssens William Parienté Mikael Petitjean Secrétariat & logistique Anne Davister Graphiste Dominos ISSN 2033-3013

The European Paradox

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Presentation_Vandenbroucke_Metaforum_27.3.2017_fin

The European paradox Frank Vandenbroucke University of Amsterdam Metaforum Lecture Leuven 27 3 2017 ¥ founding fathers: Ð market integration => upward convergence Integration & support domestic cohesion Initial division labour: economic development: supranational social national sovereignty (in theory) machine worked… more or less… until 2004/2008 A tragic dilemma integration? Design flaws in the project creating instability? Material deprivation: an absolute notion poverty Inability to afford items on a list 9; true pan-European benchmark 60 50 40 30 EU22 (unweighted average) 20 10 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EU15 Core+North South EU7 Ireland UK Poland 25 15 EU7: CZ HU LV LT EE SI SK 5 Pan-European relative income is ‘American level’ but decreased EU15Core+North 2004 (excl RO BG MT CY) data: Goedemé e Centrum voor Sociaal Beleid What went wrong? 2004-06 Very high work intensity High Medium Low low Work household Bron: Eurostat SILC 2005-2007; Erosion welfare states? Changing composition households? More precarious jobs? Migration? Key issue: capacity governments fight societal trends towards inequality and stabilize systems 80% 70% 60% 50% 40% 30% 20% 10% US: – Federal tax-and-benefit system State-based unemployment insurance with federal framework extensions Saving Net taxes transfers Factor capital depreciation Total smoothed 0% -10% US EMU 1979-1998 1999-2010 Furceri Zdzienicka Euro Area Crisis… IMF Working Paper Stabilization instruments are always centralized monetary unions (risk sharing) Paradox: solidarity at state level weak they supported by mechanisms level; EU not ready strong member Puzzle of: Binding agreements sovereignty Distrust solidarity Legitimate concern about moral hazard which has become obsession Social Union would states systemic some their key functions (e g stabilization fair corporate taxation minimum wages) guide substantive development – via general standards objectives leaving ways means policy Member States basis operational definition ‘the model’ ⇒ countries cooperate union explicit purpose pursuing both based reciprocity Thank you 1) union: puzzles paradoxes perspectives Boone Marc; Deneckere Gita Tollebeek Jo (eds ) End Postwar Future Europe Essays Ian Buruma Verhandelingen van de KVAB Wetenschappen en Kunsten Nieuwe reeks 31 Uitgeverij Peeters Forthcoming 2) Trindade perspective low-income dynamics CSB 17/03 Antwerp: Herman Deleeck Centre for Policy (University Antwerp) 3) Union: Unduly Idealistic Inevitable? Debates 7 Investment Bank Institute September 4) Rinaldi inequalities challenge In: Vision Summit Consortium ): Redesigning Ways forward Gütersloh www frankvandenbroucke uva nl researchgate net

A pan-European perspective on low-income dynamics in the EU

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CSB_Working_Paper_Goedeme-Trindade-Vandenbroucke

CSB WORKING PAPER centreforsocialpolicy eu March 2017 No 17 / 03 University of Antwerp Herman Deleeck Centre for Social Policy Sint-Jacobstraat 2 B – 2000 fax +32 (0)3 265 57 98 A pan-European perspective on low-income dynamics in the EU Tim Goedemé Lorena Zardo Trindade Frank Vandenbroucke and Working Paper 16 Forthcoming in: Cantillon T Hills J “Improving poverty reduction Europe” Oxford: Oxford Press ABSTRACT1 In this paper we study trends at lower tail EU-wide distribution disposable household income contrast to most studies take a compare levels across countries after accounting average price differences More particular make use EU-SILC 2008 2014 low proportion gap From analysis emerges highly dynamic picture which points both convergence especially since 2010 divergence Living standards new Member States notably Poland Slovakia Bulgaria have considerably improved comparison with median while living Greece lesser extent Spain Italy clearly lost ground These mark an important change composition bottom increasing weight ‘old’ end crisis-hit Southern European Worryingly also observe that no country succeeded substantially reducing at-risk-of-poverty rate This emphasises need dual solidarity national underscores importance reflecting further mutual insurance true borders Corresponding author: (CSB) Faculty Political Sciences Email: tim goedeme@uantwerpen be 1 We are grateful John Bea Zach Parolin comments suggestions The research article has benefited from financial support by Flemish Methusalem Programme data were made available Eurostat (Contract RPP 175/2015-EU-SILC-ECHP-LFS) usual disclaimer applies 3 Introduction Income inequality complex phenomena Europe they often studied Indicators relative such as Gini coefficient predominantly used within indicator compares incomes 60 per cent As result remain largely invisible However required understanding challenge Union By assessing common standard it is possible gain more insight into improvement or deterioration poorest people compared rest EU’s population helps shed alternative light progress towards goal greater social cohesion (e g Brandolini 2007; Fahey 2007) complementing predominant analyses addition facilitates better disparities between poses policy initiatives (cf & Van Lancker 2009; Levy Matsaganis Sutherland 2013; Mechelen 2013) Therefore recent other mostly based Several authors directly comparing citizens Some looked excluding post-2004 Anthony Atkinson 1996; Beblo Knaus 2001; Berthoud 2004; de Vos Zaidi 1998; 1990; Kangas Ritakallio including least some Boix Bönke Schröder 2015; Förster 2005; Lelkes Medgyesi Tóth Ward Whelan Maître 2010) few changes over time if done so mainly focused whole characterizing clusters Collado 2016) Previous highlighted following First developments policies level impact upon Heidenreich Second those relatively very different With (national) at-risk-of tend live when benchmark about forty 4 joined 2004 spite their share Third rates can standards: threshold tended decrease during past decade increased several periods thresholds Fourth substantial taken place strong reductions number households below 40 (Goedemé 2016; Meeusen 2014) previous contributions disaggregate track country-specific patterns focus onset economic crisis For doing two indicators: (LIP) ratio (LIG) Both indicators defined percentage controlling LIP look LIG size four questions: (1) How evolved individual States? (2) changed crisis? (3) Which contributed (changes in) LIG? (4) do these rate? 2008-2014 consider all except Croatia acceded period under consideration structured follows set scene motivate our choice reference what original inspiration project simultaneous pursuit upward second section briefly explain methodological choices present third empirical findings discuss consecutively questions before Thereafter conclude 5 Two perspectives presented illustrate ‘cohesion’ On one hand there well-known expression associated inclusion traditionally understand aspiration prosperity Indeed ‘cohesion policy’ dimension ‘Economic cohesion’ 1986 Single Act ‘reducing various regions backwardness least-favoured regions’ EU’s treaty Lisbon Treaty adds another facet referring ‘economic territorial overarching assess (AROP) 60% i e individuals Admittedly AROP but amongst many Nevertheless believe arguments measure central order gauge thus ‘social wish here (for argument see Barnes Marlier Nolan (2002); affirmation same view (2014)) apply (technically) similar (the 40% median) not argue applying yields ‘relative poverty’ elaborate multifaceted discussion meaning measurement ‘poverty’ today’s integrated (see instance 2012; Rottiers 2011; 2009a 2009b); reason neutral expressions ‘LIP’ ‘LIG’ think useful historical point purpose socio-economic domain: say LIP/LIG only should Union; yet residents State lives provides reality sufficiently large complement 6 GDP capita technical similarity using (or 40%) respective cut-off sheds interesting fundamental founding fathers integration been described ‘convergence machine’ (Gill Raiser 2012) Convergence was just pre-condition continuing integration: ‘output legitimacy’ (through gradual development welfare states) Union) who prepared Rome optimistically assumed growing could reached supranational cooperation together specific instruments raising member states (which later brought policy) Economic organised would boost growth create convergence; domestic redistribute fruits remaining prerogative hindsight (and slightly benign interpretation) may created cohesion: sure apart redistributive aspects agricultural limited degree cross-country redistribution favour less-developed through structural funds context approach Nor risks words did envisage organisation normally implies mixtures Historically fathers’ implied fair access opportunities: trade investment opportunities joining personal wanting needing mobile Stretching notion ‘inclusion’ might pursuing motivated (relatively vague) scale It explore Until mid-2000s considered successful seemed vindicated optimistic belief Since then model broke down stopped being 7 Overall recorded impressive accession Eurozone triggered process members Commission Within overall position pensioners among non-elderly mutually reinforcing processes polarisation leading significant work-poor weak attachment labour market; experiencing higher latter trend already started (Cantillon 2014; Rinaldi 2015) Data Statistics Conditions (EU-SILC) provide harmonized information well additional meant representative sample persons private 20142 exception Ireland United Kingdom refer year survey composition) refers years reported figures rather than Although annually 2005 focuses 20143 limit break series income4 regard source vs register At writing Brexit referendum took Given covers pre-Brexit include 2007 UDB version (UK) 2009 2011 2012 2013 improve consistency UK merged subsequent countries) Four 2008: France Austria Cyprus Other breaks appeared date: wave Denmark Estonia attempted any correction equivalent multiplied factors ensure perfect alignment estimated estimates 8 data) collection modes weighting schemes imputation procedures constitutes best comparative conditions EU5 designs errors calculated assumption simple random sampling strongly downwardly biased recommended (2013) considers reconstructed design variables6 optimal calculate covariance waves expected over-estimated noted fact itself estimate basis non-negligible effect variance (Berger Skinner 2003; Preston 1995) account making DASP module developed STATA (Araar Duclos reasons decomposing Changes statistically 95 confidence start income7 Equivalent equals sum after-transfer net taxes adjusted needs modified-OECD equivalence scale8 interested cross-national real currencies selected first convert expressed purchasing power (PPS) parities (PPPs) final consumption Even though PPPs faced limitations Deaton 2002; Milanovic 2005) tool cross‐nationally comparable PPS express year-specific allows us how (2007) Iacovou Kaminska (2012) Decancq den Bosch Vanhille (2014) variables downloaded https://timgoedeme com/eu-silc-standard-errors/ Incomes coded country-year top-coded 10 times non-equivalised so-called ‘LIS procedure’) See Kerm treatment extreme values modified OECD attaches adult 0 aged 14 older less 9 bundle calculating others lead Furthermore necessarily constructed basket goods services reflects groups neglect within‐country forward simply ‘income’ denote related measures equal poor averaged total part Foster-Greer Thorbecke (FGT) index (Foster Greer 1984) FGT found et al Results So far aggregate highlight LIG; contribution correlation Pan-European glance grasp wider each Figure depict kernel density curves expressing (while taking account) graphs clear quite re-ranking throughout richer Belgium Finland Sweden Malta experienced given high happened above Netherlands seen distributions fall Central Eastern immediate effects Over Czech Republic Romania grow Hungary Lithuania (even years) Slovenia decreases somewhat depending 11 Kernel (EU27) 12 Notes: Breaks (2011) Source: own calculations details) helpful having quick allow precise interpretation direct estimation considerable expect movements unclear work fell much Also year-to-year modest (at 95% level) dropped 13 24 22 three quarters drop realised remained pattern observed stagnation surprising responses followed continued absolute Leventi apparent contrasts sharply shows detail variation enormous Luxembourg Latvia 50 even 90 looking larger vary entire (-33 p ) (-22 display strongest (+25 Substantial Estonia9 (all -10 more) whereas increases (between Remarkably does figure list indicating had stronger depicted worth pointing out timing varies biggest concentrated next witnessed increase varied caution Estonian intervals Countries ranked wonder whether observation graph threshold10 line Sala-i-Martin (1996) linearly regress annual beginning beta-convergence ordinary square regression EU27 15 (i threshold) Percentage dotted linear Please note x y-axis highlights diverging Baltic six 26 (with Estonia) Six Finally ranges -0 065 27 23 coefficients negative lifting case lifted changing suggests respects captures heavily dominated countries: concentration nearly lived either accounted 56 LIG11 becoming Whereas initially 18 its halved Germany EU15 43 Still consequence become closer country’s Nonetheless deviations still exist: now numbers exactly tell resources EUR distributed reduce zero measured ceteris paribus smaller underestimate flow overrepresented assume exogenous imply small populations bigger contribute quantify precision mechanical way (that causal framework) follow spelled Corluy (2012)12 decreased declined mentioned earlier decline stability inertia compensatory (ΔLIP) decomposed follows: component consists difference factor shares decomposition purposes caveats borne mind assumes ignores via differential mere attempt construct realistic counterfactual detailed limits 19 sorted included ≥0 01 20 Figures neglecting entirely unexpectedly almost half lack thereof) utmost keeping (especially income) 21 side pushes contributing came primarily evenly Contrasting introduction argued indispensable enlargement verify obtaining typically uses improves question achievement (a) catching-up terms middle-group whose shifts (b) improvements internal (from incomes) hardly achieve combination combined instances Notably none Potentially signals kind ‘trade-off’ Presumably why (in brief window observation) linked crisis: produced ‘national like Conclusion calls studying exceptions received little attention explored draw What short because cancel visible really Romania’s general rule sharp Moreover insofar story behind collapse traditional mixture failures architecture heterogeneity enlarged longer-term generate working age Whatever solutions proposed variety problems besetting monetary union banking union; fiscal capacity possibly re-insurance unemployment genuine scheme) always entail ex ante organization mechanisms polity emerged ‘opportunity structure’ Simultaneously supporting presupposes active ‘human capital’ deemed necessary (Vandenbroucke Thus logical ago defining normative feature ‘the Model’: Model summary description co-existing models; describes interact supposed Hence conceptual apparatus describe interaction way; methodology promising 25 References Araar -Y DASP: Distributive Analysis Stata Package: PEP CIRPÉE World Bank Université Laval Review 12(1) 15-28 E (2002) Indicators: Inclusion M (2001) Measuring Inequality Euroland Wealth 47(3) 301-320 Berger Y G C (2003) Variance Estimation Low Proportion Journal Royal Statistical Society Series (Applied Statistics) 52(4) 457-468 R (2004) Patterns Poverty Bristol: Calibrating cross-European Colchester: ISER Institutional Accomodation Enlarged Bonn: Friedrich Ebert Stiftung (2015) European-wide Berlin: DIW Measurement Distribution Supranational Entities: Case S P Jenkins Micklewright (Eds Re-Examined (pp 62-83) Beyond Investment Concepts Values Policy-making F Reconciling states? 286-318) V Individual Employment Household Risk Decomposition 80) Antwerp: K (1998) Union: Country-specific Union-wide lines? 8(1) 77-92 monitoring MDG New York: Nations Development Evolution Europe: 60-93) jobs Promoting good governance cities Sixth report Luxembourg: Publications Office Eurostat-OECD manual (1990) Figures: Early 1980s Official Communities Measure Sociological 23(1) 35-47 (2005) Space Revisited: Comparing Comparative 7(1) 29-48 Foster (1984) Class Decomposable Measures Econometrica 52(3) 761-766 Gill I Golden Restoring lustre Washington DC: EU-SILC? Complex error 2020 Research 110(1) 89-110 D (2016) machine To benefit citizens? Common Market Studies 54(5) 1142–1158 L Mountains move: old – Discussion Definitions Reference Groups Sociology Compass 5(1) 77-91 W (2009) Universal Basic Pension Europe’s Elderly: Options Pitfalls 4(1) Article 26p Europeanization eurozone inter- supra-and transnational (Ed Exploring Diverging employment 22-47) Cheltenham: Edward Elgar O H Using analysis: strengths recommendations Essex: -M Relative What? Cross National Pictures Measured Regional Standards Societies 9(2) 119-145 Inequalities 17-44) Budapest: Tárki Towards Child Income? International Microsimulation 6(1) 63-85 Facing challenges distributional austerity recession South Politics 19(3) 393-412 Worlds Apart Global Princeton (1995) Sampling Distributions 44(1) 91-99 X Classical Approach 106(437) 1019-1036 Extreme (No NO 2007-01) CEPS-Instead N Minimum Protection: Clarifying Conundrum Marx Nelson Protection Flux 271-317) Hampshire: Palgrave Macmillan inequalities Vision Susmmit Consortium Redesigning Ways 38-77): Gütersloh (2009a) ‘Europeanisation’ Reconsideration 11(2) 283-309 (2009b) 19(2) 117-130 (2010) 26(6) 713-730 Notes updating 2012-2014

Flexibiliteit in een coherente hervorming van de pensioenstelsels

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2017-03-13_Presentatie_Vandenbroucke_NPC_Flexibiliteit_in_een_coherente_hervorming_van_de_pensioenstelsels

Flexibiliteit in een coherente hervorming van de pensioenstelsels Inleidende beschouwing Welke vragen dienen beantwoord? Presentatie voor het Nationaal Pensioencomité 13 maart 2017 Frank Vandenbroucke Voorzitter Academische Raad Universiteit Amsterdam Documentatie ¥ Pensions en répartition par points 12 2 (slide show) Twee rapporten Commissie Pensioenhervorming 2020-2040 (www pensioen2040 belgie be) Ð Rapport juni 2014: Een sterk betrouwbaar sociaal contract april 2015: Zware beroepen deeltijds pensioen eerlijke flexibiliteit pensioensysteem Waarom grondige hervorming: nieuwe zekerheid Als sociale verzekering vormt dat houvast moet bieden iedereen jongeren zowel als ouderen actieven gepensioneerden Bij ongewijzigd beleid is financieel niet houdbaar strookt meer met evoluties samenleving rijzen er problemen inzake kwaliteit Louter parameters bestaande systeem wijzigen volstaat De pleit daarom Doelstellingen: ambitie gemiddelde verhouding tussen inkomens zich binnen wenselijke bandbreedte situeren (“noch defined benefit noch contribution maar ambition”) Ook bijdragen op arbeidsinkomens moeten bepaalde blijven => o Loopbanen verlengen Financiering andere basis dan (o m factor vermogen) Vooraf vastgelegde spelregels verzekeren doelstellingen behaald worden evenwicht stand wordt gehouden rechtvaardige spreiding inspanningen die daarvoor nodig zijn Flexibiliteit: aanvullend advies 2015 beroepen: Meerdere dimensies spelen rol Evoluerende realiteit Objectiveerbaar ook resultaat (preventieve) beleidskeuzes Sociaal overleg ⇒ Verschil maken berekening leeftijds- of loopbaaneisen Vereist algemene (keuzevrijheid) Deeltijds vorm flexibiliteit: opportuniteiten vragen: Wat kan men bijverdienen bij pensioen? Kan verder opbouwen door te werken terwijl reeds geniet? correcties toegepast vervroegde opname Hoe corrigeren? (sociale ongelijkheid levensverwachting) In welke mate b t Extra punten zware Correcties i f v Moment Omvang Concrete illustratie: slideshow ‘Pension points’ Pensioenleeftijd loopbaangevoelige correcties: zie slides 28-47 pensioen: 89-93 Conclusies regering vooreerst goed gestructureerd hervormingsproces voorstelt garanderen samenhang verschillende onderdelen chronologie hervormingen bewaakt raadt om administratieve redenen af implementeren huidige pensioenregelingen Te beantwoorden principiële (beperkt tot 1ste pijler): Wil ‘defined ambition’ d w z inkomen stabiliseren? Zo ja welk niveau? aanpassingsmechanismen ingebouwd zelf? vooraf loopbaan- leeftijdseisen? berekeningsformules? stelsels convergeren ze toch apart beheerd worden? pensioensysteem? over toegelaten arbeid actuariële … rekening houden zwaarte via hoogte gezinsdimensie moderniseren? richting? minima vereenvoudigen verbeteren? •

Social policy in a monetary union: puzzles, paradoxes and perspectives

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Vandenbroucke_contribution_Buruma_book_as_submitted_19.3.2017

A 1 Social policy in a monetary union: puzzles paradoxes and perspectives Frank Vandenbroucke University of Amsterdam1 Submitted for publication as chapter in: Boone Marc; Deneckere Gita & Tollebeek Jo (eds ) The End Postwar the Future Europe – Essays on work Ian Buruma Verhandelingen van de KVAB voor Wetenschappen en Kunsten Nieuwe reeks 31 Uitgeverij Peeters Forthcoming Abstract All existing unions centralise to various degrees specific social functions notably that support economic stabilization like unemployment insurance European Monetary Union features only exception Compared United States organises more solidarity within its member states but far less between states: this is an untenable paradox strong parochial Any way out leads complex puzzle sovereignty mutual trust One should not underestimate complexity solving it implies lasting fragility construction Contrary what sometimes argued we are facing ’tragic dilemma’ integration maintaining welfare need repair major design flaws solution does point state true union would national systemic level some their key It presupposes basic consensus model I will briefly refer Commission’s initiative launch ‘European Pillar Rights’ since can contribute developing such Risk sharing basis – kind advocate contribution ‘reciprocity’ Reciprocity cement states; also inspire For instance apply principle reciprocity current debates cross-border mobility Politically arguments presented may seem uphill battle today However shy away from rational argument: order ‘take back control’ Europeans must be ready share risks domains 2 Introduction: tragic dilemma? Developing integrating were greatest political projects 20th century They raised hope: ‘free people fear need’ was put end history bloody wars Both now at standstill if deep trouble (EU) faces existential questions about ultimate goal There no questioning per se which protect against impression they capable realising talk succession crises has been confronted with nor discuss all challenges our Hence important issues covered during lecture zoom one particular question: case project odds each other? Are caught dilemma because objectives (integration openness by protection security states) longer compatible qua objectives? In community EU scholars pessimistic assessment new According Fritz Scharpf impossible conceived become market economy: consistently pushes towards liberal founders thought rather opposite: signatories Treaty Rome convinced development prosperous inclusive retrospect summarize optimistic belief follows: • Economic stimulate growth participating countries allow developed catch up: convergence machine could safely left where trade parties develop sufficient pressure redistribute benefits fairly agree pan-European standards Countries ahead economically socially hindered policy: affect internal cohesion 3 short founding fathers’ credo based two articles faith clearly distinguished: convergence-through-integration cohesion-in-convergence immediately add second article (cohesion-in-convergence) undisputed fifties there whether possible without harmonisation This question heart 1956 Ohlin report together Spaak prepared launching Community Bertil Ohlin4 believed differences wages related expenditures involved mainly productivity; hence have downward when allowing free added any divergence diminish states’ competitiveness common adverse corrected adapting exchange rates Thus describing insignificant caveat fathers followed suit large degree 5 History proven wrong least until halfway first decade 21st century: catching up went hand Over last however started show cracks predating 2008 crisis spinning inequality increasing several mature ‘cohesion-in-convergence’ applied crack or spectacular fissure emerged crisis: stopped north south tearing apart Since (a number of) particularly Eurozone table Union: unification mean policy? am merely asking abstracto: focus serving therefore illustrate how very ambitious still today’s enlarged highly unequal twin challenge slightly technical following section readers who don’t graphs tables skip move Unequal Figure 1a shows next individual US (Figure 1b) Henceforth simply call them ‘states’ grey diamonds represent black square middle both figures represents imaginary ‘representative state’ i e American residents’ income distribution correspond respectively average 6 horizontal axis median state’s residents relation vertical measure 7 being GINI coefficient thus comparing coefficients When diamond) situated right representative (the square) higher than Conversely diamond lower A above indication while below indicates dotted circle holds Sweden Denmark four countries: Austria Belgium Finland Netherlands these considerably richer (with 34 53 percent average) equal 9 17 Rumania Bulgaria well Latvia Lithuania Estonia Greece Portugal just 29 (Rumania) 72 (Portugal) 13 illustrates heterogeneous quite special 4 Source: Eurostat Bureau Census see endnote details 1b cannot compared unequally distributed diverse comes characterises country results every situation different If consider single high But combined result (moderate) most Moreover poorer often display ones even diversity comparison levels (as 1a) select rung ladder benchmark; Table compares incomes five relative 60% 70% 80% 90% 100% 110% 120% 130% 140% 0% 50% 150% 200% Inequality (GINI) % Median 1a: EU28 household across 1b: domestic those same bottom use someone top quintile his country; 20% fellow countrymen Rumanian citizen (i poor standards) currently 23 To compare relatively rich fourth citizens whose 32 corresponding average: ‘rich’ fares better opposite observation Denmark: ‘poor’ Dane displays similar comparisons third (neither terms) main ‘static’ emerging gap ladders observe change; dynamic perspective conveys positive negative news: Eastern Central managed 2006 rungs ladder; dramatically news occurred Greek Polish distribution! 1: Income (in Benchmark Average 27 Poland Germany 2013 Top Quintile 26% 32% 123% 133% 48% 138% 65% 24% 30% 132% 45% 67% 93% 62% 21% 28% 139% 145% 88% 58% 18% 23% 144% 152% 43% 136% 82% 53% Legend: standardized net disposable quintiles unweighted EU27 purchasing power parities (PPP) take into account price differentials Eurostat: SILC 2007 figures; 2014 explains why poverty line generates rate much rates; improved after 2004 8 Should traditionally unified closer numbers At sight confirm heterogeneity too beneficial progress inevitably decline others reality Tragic dilemmas repairable flaws? Welfare redistributive effort seems waver advanced used serve role withstood recent fact explanation cases yet other seen already before increase (which absolute poverty) diminished among pensioners considerable increased working age children played reduction diminished; households participation labour low widened so happens comparable information post-2004 period Survey Living Conditions (EU SILC) implemented enlargement tempting proof ‘tragic dilemma’ referred earlier: decreasing capacity perceived pay engine sure erode Ohlin’s optimism worked another party 28 sounds plausible backdrop data story? think Ohlin’s recipe adequate really First distinguish punctual lacunae regulation fundamental trends Lacunae ‘posting’ create (posting means works say employer Poland; posting allows exceptions viz-à-viz rules normally workers) needs reform; return issue my badly organized system flaw How Competitive minimum might lead assumption limits margin absence workers Minimum play pivotal organisation protection: constrains turn residual assistance Consequently whole edifice under ‘minimum wage competition’ While hypothesis group set (or affirmed) public authorities recorded Eurostat10 indeed shift relationship favourable minimum/average ratio trend whereas made efforts resulting happened UK suggests mounting jump conclusions: constitute component systems 15 years many governments amended tax-and-benefit improve jobs: British ‘in-work benefits’ well-known example A1 (see Appendix) importance low-wage instigated stronger keep high; purse somehow dispensed employers responsibility Now stop making efforts11 prevent sufficiently Whether policies pursued matter budgetary priorities Cantillon Marchal Luigjes evolution 2000s 1990s balance ‘favourable’ ‘unfavourable’ developments latter period) 12 That contra-indication idea continue jobs depends choices made) necessitate greater little potential Furthermore demographic changes unrelated competition (and Europeanisation) fight growing lone parents example: societies dual-career families norm suffice lift family threshold generous replacement: inadequate Governments tools imperative migration wave contributed EU15 migrants natives risk side effect ‘benefits tourism’ applies job We notice non-EU connection: perhaps EU-immigrants compete ’traditional’ non-western immigrants make difficult 14 Next direct impacts outcomes indirect impact via attitudes Brian Burgoon examined redistribution Poor heightens concern jeopardises states’ financial sustainability respect vicious present factors causal chain cut long story regard (not quality) provide though explanatory factors; drivers synthesis life-long research Anthony Atkinson emphasizes inequality16 varying experience capital markets analysis board technological employment relations codes conduct form taxes Increasing stem ‘iron laws’ talking stock Piketty focuses on) globalisation Europeanisation Each own pattern willing counter sociological generate words crux is: oppose forces do want that? relevant effective provided Mind respond laws nature removed chemistry physics objective mechanisms: world ideas plays decisive problem David Cameron’s ‘Brexit deal’ had everything wagers clear facts shock-absorber created drift apart: reverse gear grew origin definitely Let me aspect lack shock-absorbers built-in automatic stabilisers: progressive downturn smoothing shocks These stabilisers temporary deterioration budget hit hard switch off quickly reactions strict austerity agreed upon Council Analyses Commission spending initially complied stabilising expect changed phase discomforting known partially centralised implications drawing IMF economists 18 Furceri Zdzienicka (2013); note idiosyncratic ‘asymmetric’) affecting product government consumption bars indicate extent smoothed relate 1963-1990 period: 75 cent shocks’ (one ‘neutralized’ ‘absorbed’ cent) figure distinguishes three Shocks production revenue invested outside people’s home mechanism US: neutralized 39 consideration corresponds part (technically influence so-called ‘factor incomes’ depreciation simplify presentation) constitutes ‘insurance mechanism’ operating through private save conversely boom) absorbed Transnational credit international borrowing lending crucial respect: federal tax benefit programmes certain Washington reinsures tops schemes organised itself umbrella limited impact: absorbs read hatched -10% 10% 40% EMU 1979- 1998 1999- 2010 2: Smoothing Saving Net transfers Factor Total 10 What matters complementarity mechanisms explained organize insurance; nations (like Canada Germany) organizes funds supports help scheme complies requirements State incur deficit conditions borrow money And times severe provides ‘extended ‘emergency entirely financed budget; Obama administration 19 economy shock (except Italy US) 20 contradict members explaining difference prior thereafter eighties nineties later shape savings channel EU-level hardly Prior creation 45 Once saving dissaving receded; 26 authors gathered smooth systematically decreased Eurozone; ineffective downturns height southern closed responsible insuring banks contrast reinsured level) this: held ‘deadly embrace’ collapsed avoidable; repetition events absorb An integrated achieved run banking putting embrace’ priority Banking components needed: fully insurers Public catalyst guarantee fiscal stabilizers: sort complement 21 11 Why centralised? opt downright centralisation streamline reinsurance combine decentralisation behaviour reasons signalled pooling enhances resilience reason symmetric value se); refers ‘externalities’ National externality: properly insures helps neighbours You fire insurance: you hope your neighbour subscribes proper him unable damages place spread yours insurances car mandatory Vaccines archetypal externalities: vaccine individuals themselves infectious deceases get touch purely view efficiency subsidise vaccination compulsory elaborate analogy ‘compulsory vaccination’ then subsidisation contamination mere market; runs out-of-control 22 Therefore stabilisation built Which apply? From preventative prudence requirement: accumulate structural deficits reduces ability additional debt sufficient: stabilizing quality subject Do cover employees groups remain uninsured country)?23 enough creating inactivity traps? metaphoric camel’s nose: function good effects activation etc So programme entails cluster principles coherently comply Not coincidentally subsidised theory learns goods services externalities reach optimal although associate (granting subsidy high) qualities creates ‘vaccine’ volatility affordable) go Such device answer underpin politically easier obtain illusion small premium interstate look like? few proposals published linking 24 typically imply fund disburses affected g significant partner large-scale study led Centre Policy Studies (CEPS) topic; variants Unemployment Benefit Scheme 25 setting genuine complements underestimated exclude permanent favour avoid resources pure logic covering My conclusion meet implement takes ‘reinsurance’ Reinsurance flexibility offers scope mitigate institutional moral hazard (I below); complicated option here Instead going emphasize rationale approach trade-off (formal) sense simple: prevention cure Although came intergovernmental negotiations Solidarity ex ante rooted fabric post drawbacks Organising repeated ad-hoc burden conditionality easily conflict polarisation electorates Ex expensive certainly instability: swings driven expectations expectation doing preventing dimension ‘private mechanisms’ complementary ‘public International prone panics ‘sudden stops’ expected cushion serious probably argue argument doomed fiction Mutual distrust deeply proposal meets resistance dominant (Moral occurs actor actors costs consolidate weak casu ungenerous insurance) makes ‘complete’ fails level: well-developed incomplete Is complete Union? Admittedly difficult: stable relies simultaneous sensitive Everybody ‘cross street time’ done trust? Allow once list pieces classical prisoners’ solidary remedy imbalances position guarded know best handle adjustment spirit alas fair inconvenient truth collective action reducing formal upshot context mutually ‘insurance contract’ gain legitimacy enhance acceptability positions Fiscal simple transparent ‘flexibility’ governance accommodate catered Yet always intrusive touched previous let aim logical corollary reinforcing) quid pro quo organising generosity (notably short-term unemployed) coverage (short-term) parcel Trade movements welcome agenda us tread turf possibility ‘lax’ unemployed (re)employment obvious totally obsessed Moral unavoidable you’re eliminate faintest you’ll never able reap On dismissive hazard: address find solutions minimise reduced deviates historic (national) profile long-lasting High thresholds intervention intervenes (very deviations country’s profile) ‘claw back’ stipulate entitled collected reimbursed stringent regulations weaker essential establishing room powerful somewhat intention state; endeavour considering central provinces regions municipalities interesting Switzerland detailed implicit explicit politics wide range solutions: financing models control coordination Ever Employment Strategy launched 1997 ‘coordination’ Youth Guarantee closely connected assurance regarding ‘soft’ trigger give bite: legitimate Binding commitments leave leeway differentiation concrete policies: essence elaborated detail homogeneous agreement necessity past attempts ’the model’ useful project: ‘nice have’ indispensable Today finding 30 Well-known terms trade-offs Members currency area symmetry Symmetry output prices Flexibility relates interregional determine asymmetric Less necessitates flexibility: required adaptability traditional textbook ‘adaptability’ understood and/or textbooks: alleviate plight Obviously reversible require readiness organise requires engage requirements’ mentioned paragraph general including deliver sound finances Exposure produced ‘discipline’ finance contrary witnessed asymmetrical Relative deteriorated significantly huge invisible visible pursues increases institutions coordinate increases: container concept ‘high road’ placed opposition ‘low road highly-skilled versatile force training facilitate transitions deregulation easy hiring firing irrelevant adopted pillars sustainable functionally equivalent outcome attached types equally perform dimensions relegated domain counsel limit accommodated Whatever method neither neutral long-term implied pillar rights Can start consensus? March 2016 consultation 33 focusses adhere term ‘rights’ confusing 16 tool benchmarking policies; replace change indicates: “The reference framework screen performance Member drive reforms specifically compass renewed process ” areas grouped themes: opportunities access conditions; debate building needed high-risk repackaging strategies strategy Open Method Coordination Protection Inclusion momentum prevailing scepticism Union’s significance successful met concluded leaders partners highest firm commitment (Think ‘Fiscal Compact’: ‘Social Compact’ salience Second competent establish legal conditions) competences legislative curbed supported thorough incisive instruments surpasses processes Third linked ‘harder’ initiatives designing Eurozone: link analytically compelling bargaining Samuel Bowles defines ‘strong reciprocity’ “propensity cooperate similarly disposed personal cost ”35 goes beyond ‘enlightened self-interest’ ‘conditional’ Quid ruthless mantra neglects compassion contexts; obsession overlook guiding normative explain non-discrimination citizens: Belgian enter existence assistance: legislation impose immediate unconditional inactive (to example) enjoys Belgium: he principle? facilitates tangible ideal citizenship non-discriminatory circles justifies worker’s pays contributions sustains tolerate territory Competition exactly workers: worker ‘posted’ remains foundational fortiori wants problems inspection ask reform Commissioner Marianne Thyssen rejected Denmark) moment stalemate ground search compromise? believe Cameron’s negotiating deal Brexit posted; wanted derogation motivated government’s paid Cameron attracts over expense taxpayer Other employers’ convincing discussion illustrated Brits As said arise facts; perceptions determining obtained voted divisive EU? New limitations (since regime them); simultaneously relapse citizens) justification fundamentally interests Dutch campaign considers excessive uncontrolled freedom realm urges Simultaneously opposition) voiced sympathy parts 36 Just contradictory rationales attracted rationales) short- interest interest? negotiation way: “We discriminate Netherlands: assure please understand undermined excesses application ” again representatives strike non-discrimination) uncontrollable proliferate thrive ultimately settle equilibrium lose whilst leaving concerns essentially did prove mid-2000s protracted reconsider flourishing states? spectrum despite conflicting views exact mix inspired position: yes isolated longer-term restoring strictly confining coherent conception ‘European Union’ notion deliberately invites propose clear-cut vague ‘a Europe’ surfaces discussions conventional dimension’ assert mobile health safety workplace directives workers’ non-trivial acquis fifty piecemeal solid foundation enforcing premised denial steps build stage ‘adding emphasis coincidence State: historical legacies entities primary purpose interpersonal borders; logics investment lecture)37 rethink practical subsidiarity ‘union More generally practice top-down one-size-fits-all policy-making 38 core summarised guide substantive ways operational definition ‘the Model’ expression focused given examples Think defining corporate taxation enable maintain balanced highlights ‘example followed’ unchartered territory: entire ‘union supposed puzzle: everyone’s happen increasingly losing situation? debate: synonymous ‘losing control’ Appendix: households’ couple income: influenced receive childless CSB MIPI Databank Version 3/2013; Van Mechelen et al (2011) 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 LU IE AT FI DE FR NL DK BE IT SI EL CZ ES SK EE PL HU LT PT LV RO BG A1: with/without living with2 kids Gross salary (wage) References Anderson K M (2015) Palgrave Macmillan Allard C J Bluedorn F Bornhorst D ‘Lessons minimal elements euro area’ Cottarelli Guerguil (eds) Designing Lessons federations Abingdon: Routledge B Be Done? Oxford: Oxford Press Beblavy G Marconi Maselli CEPS Special Report No 119 S Fong H Gintis Jayadev U Pagano (2012) Economics Redistribution Cambridge: Cambridge (2013) Political Economy Re-embedding Liberalism Inaugural Address Amsterdam June (2014) ‘Immigration Integration Support World Politics 66 p 365-405 (2016) Decent Poor: Role Europe? Improve Final Conference Paper Antwerpen February Working 15/20 Herman Deleeck Antwerp Reconciling Work Poverty Reduction Successful States? Dolls Fuest Peichl ‘Automatic Stabilizers Crisis: vs Journal 96(3-4) 279-294 Developments 2015 Brussels: Esser T Ferrarini Nelson Palme O Sjöberg Benefits DG Affairs Zdziencicka Euro Area Need Supranational Sharing Mechanism ? 13/198 Gill Raiser Golden Restoring Lustre Model Washington: Bank Goedemé Collado ‘The Convergence Machine EU’s Poorest Citizens?’ Common Market 1-17 Labour Organization (1956) Aspects Co-operation Group Experts’ (summary) Review 74 (2) 99-123 Completing Europe’s Jean-Claude Juncker close cooperation Donald Tusk Jeroen Dijsselbloem Mario Draghi Martin Schulz Leibfried Left Judges Markets?’ Wallace Pollack Young (red Policy-Making 7th edition 263-292 Oksanen Asymmetric Area: Simple Proposal Dealing Mistrust CESifo 5817 Rhodes ‘Employment Between Efficacy Experimentation’ 293-318 Salverda W Nolan Checchi Marx McKnight Toth Werfhorst Changing Inequalities Rich Analytical Comparative Perspectives (2009) Asymmetry KFG 1-35 Berlin: Kolleg-Forschergruppe Transformative Power SEO Grensoverschrijdend Aanbod Personeel: Verschuivingen Nationaliteit Contractvormen op Nederlandse Arbeidsmarkt 2001-2011 Onderzoek opdracht het Ministerie Sociale Zaken Werkgelegenheid Amsterdam: Economisch Strauss R APPAM Inequalities: Addressing Growing Challenge Policymakers Worldwide London 13-14 Teulings ’De Toekomst Europa: Een essay schuld moraal solidariteit’ Management Organisatie 5(6) 33-38 N CSB-Minimum Indicators dataset (CSB-MIPI) Series WP 11/05 Antwerp: Vinck ‘Child Wallonia Flanders: Accounting worrying performance’ Belgisch Tijdschrift Zekerheid 57(1) 51-98 Rinaldi inequalities cohesion’ Vision Summit Consortium ): Redesigning Ways forward Gütersloh (http://www vision-europe-summit eu/) 38-77 (2016a) Sticking yield everybody Tribune Notre Institut Jacques Delors juni (via http://www delorsinstitute eu/011-23040-Social-benefits-and-cross-border-mobility html) (2016b) Automatic stabilizers September institutdelors eu/media/stabiliserssocialeurope-vandenbroucke-jdi-sept16 pdf?pdf=ok) (2016c) ‘Comparative Analysis Brink Era’ Analysis: Research Practice 1–13 Europe: Defining union’s luxury Ose Opinion N° 1-39 pp Brussels (Belgium): 2012 (www ose be/EN) Case Muddling Through Sense Purpose’ Marin(red Global Ashgate: Aldershot 489-520 Vanhercke Ten Tough Nuts Crack Background Friends High-Level Institutional multi-tiered summary eight studies inaugural full professor short-cuts updates See ‘social ‘convergence machine’ recipient Sveriges Riksbank Prize Sciences Memory Alfred Nobel Swedish politician leader Heckscher-Ohlin theorem Organisation (ILO 1956) write ’to degree’ 1980s overview (member) taking size (Eurostat); underlying render available standardised composition; amounts rendered parities; except Ireland dollars comprehensive versus examine convergence-cohesion rough statement 1999-2008 configuration suited modifications; EU-integration entail concerning (2014); broader (2015); III pages 276-278 Based series: column IV (numbers borrowed Asdrubali) columns (II) (III) sophisticated (2015 239) (2014 34) Bablevy suggestions bibliography found http://ec europa eu/social/main jsp?catId=738&langId=en&pubId=7959 ‘re-insurance’ De Grauwe plead Eurobonds diverging surpluses initiate corrective actions accountable reflection Union’ Arguing necessary mark departure Six-Pack Macroeconomic Imbalance Procedure deliberate strengthen makers one-sided addressed instead around benchmark ‘golden rule’ productivity golden rule moderation (Vandenbroucke 2015) congenial pension Commission’s deepening further Five Presidents Institutions completing comparative analysis; 35 government) concerned exportability child nuanced in-work non-UK driver 37 Subsidiarity wrongly considered direction; macroeconomic supra-national justify rethinking

Pensioenbeleid als antwoord op onzekerheid over de lange termijn

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2017-03-14_Pensioenbeleid_onzekerheid_keynote_Vandenbroucke_14-3-2017

Pensioenbeleid als antwoord op onzekerheid over de lange termijn Frank Vandenbroucke Universiteit van Amsterdam Keynote bij het Colloquium ‘Perspectieven in Brussel: anticiperen om beter te besturen’ Brussel 14 maart 2017 ¥ European Commission The 2015 Ageing Report Economy 3/2015 Rapport Commissie Pensioenhervorming 2020-2040 (www pensioen2040 belgie be) Erik Schokkaert Pierre Devolder Jean Hindriks Towards an equitable and sustainable points system A proposal for pension reform Belgium Discussion Paper Series DPS 17 03 February Department of Economics KULeuven et Réforme des pensions légales : le système à Regards Economiques n° 130 Mars www frankvandenbroucke uva nl Voorspellingsmodellen ‘gestructureerde pedagogie’; voorbeeld Wat leren we uit 2015? zijn doelstellingen een hervorming volgens 2020-2040? Working Group presenteert analyse van: Ð verklaringen verschil met eerdere projecties (Ageing 2012); impact ‘risicofactoren’; ‘drivers’ geprojecteerde resultaat Voorspellingen basis maatregelen die effectief genomen tot en december 2014 (incl regering Di Rupo excl reg Michel) Terminologie gebruikt volgende slides: Public pensions: “wettelijke pensioenen” = eerste pijler Old age dependency: “ouderenafhankelijkheid”= verhouding (aantal mensen 65+)/(aantal actieve leeftijd 15-64 20-64) Total economic “totale economische afhankelijkheid”= personen zonder werk kinderen ouderen inbegrepen)/(personen aan tussen 15 74 jaar) Life expectancy at 65: “levensverwachtingop 65 jaar” Coverage: “dekking” gepensioneerden)/(bevolking 65+) Labour market: “arbeidsmarkt” ≈ werkzaamheid Benefit ratio: “uitkeringsratio”≈ verhouding(gemiddeld pensioen)/(gemiddeld loon) p 111 Baseline: publieke uitgaven voor pensioenen stijgen 3 3% BNP 2013 2060 299 Analyse (ongunstige) risico’s: wijzigingen pensioenuitgaven 2013-2016 BE vs andere landen België is gevoeliger risico’s dan 204 Dependency demographic change the EU 160 28 140 26 120 24 100 22 80 20 60 40 18 16 0 2020 2025 2030 2035 2040 2045 2050 2055 dependency ratio 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2016 2019 2022 2028 2031 2034 2037 2043 2046 2049 2052 2058 001 000 with constant life 12 10 8 6 4 2 Impact (no coverage benefit labour market ratio) actual forecast interaction) + 70 50 30 No Musgrave rule all 55 % GDP 45 35 BR2013 Doelstellingen pensioenhervorming De gemiddelde inkomens gepensioneerden actieven moet zich binnen wenselijke bandbreedte situeren (“noch defined noch contribution maar ambition”) Ook bijdragen arbeidsinkomens moeten bepaalde blijven => o Loopbanen verlengen Financiering (o m factor vermogen) Vooraf vastgelegde spelregels verzekeren dat pensioensysteem behaald worden financieel evenwicht stand wordt gehouden rechtvaardige spreiding inspanningen daarvoor nodig

Arbeidsmarkt en sociale uitsluiting: een blijvende zorg

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2017-03-09_WEB_Turnhout_final_Arbeidsmarkt-en-sociale-uitsluiting-een-blijvende-zorg

Arbeidsmarkt en sociale uitsluiting: een blijvende zorg Frank Vandenbroucke Lezing n a v ‘25 jaar Werkervaringsbedrijven’ Turnhout 9 maart 2017 Opleiding armoederisico Gemiddelde 2012-2013-2014 Volle balkjes: 2004-2005-2006 (SILC 2005-2015) Laaggeschoold Middelgeschoold Hooggeschoold Aandeel mensen (beneden 60) in zeer werk-arm huishouden 2014 Bron: SILC 2015 BE: grote groep + hoog risico op armoede Individuele werkloosheid huishoudwerkloosheid Polarisatie • => ‘verwachte huishoudwerkloosheid’ –veronderstelling: jobs zijn random verdeeld over huishoudens –verwachte hangt af van de grootte huishoudens: •alle = alleenstaanden: verwachte individuele koppels: huishoud (individuele werkloosheid) * •Polarisatie geobserveerde – Niveaus polarisatie (Figuur 4 Corluy & Vandenbroucke) Verklaringen voor het verschil tussen België andere landen Alleenstaanden: Misschien hebben alleenstaanden BE ongeacht hun kenmerken relatief groter dan die koppels vormen? zwakker individueel profiel (geslacht opleiding leeftijd herkomst woonplaats)? is werkloosheidskloof met sterke zwakke profielen landen? Koppels: er meer homogamie Marginale effecten kans (probit schatting) 2012 (Tabel 2 Profiel (ratio t o bevolking) 3 werkloosheidsrisico’s Homogamie partners eenzelfde scholing 5 Decompositie wijziging aandeel personen zonder werk 1983-2012 (Corluy Figuur 6) Laaggeschoolde Vlaanderen: werkzaamheid Wie deze wat kansen? Drie historische beleidslijnen sinds 2003-2004 Activering Structurele lastenvermindering doelgroepkortingen Dienstencheques 6de staatshervorming Sociale economie Verhouding ‘lageloongrens’ brutominimumloon federale RSZ NAR Laaggeschoolden max BML (+ 10%) x bevolking; 50% laaggeschoolde jongeren: (+10%) Evolutie lastenverminderingen lage hoge lonen RSZ; 2014: gemiddelde eerste twee kwartalen Federale lastenvermindering: lineair of niet? Vlaams doelgroepenbeleid: 25-54? initiële opzet gelukkig gecorrigeerd komt nu toch (beperkte) maatregel langdurig werklozen Bijdrage dienstencheques werkgelegenheid (op basis scholingsniveau) CRB Ca 1/5de vrouwen werken (25-64) zorgjobs (isco 513) schoonmaakjobs 913) % alle Nederland Een zekere verdringing treedt economie: groei stilgevallen 2010-2011; onduidelijke toekomst nieuwe beleidsimpuls nodig maar… Doelgroepenbeleid 25-54 Personen arbeidshandicap Langdurig Toekomst buurtdiensten…? Tijdelijke Werkervaring? PWA Wijk-werken? Groeipad economie? Zorg aanvullende thuiszorg onderwijs: aansluiting onderwijs-arbeidsmarkt scholen-VDAB functies ontbinden (job carving) Geen werkvloeren? Alle hoop snelle doorstroming? Bronnen V F (2015) Huishoudens Leuvense Economische Standpunten 2015/149 Faculteit Bedrijfswetenschappen-CES KULeuven Dienstencheques: vraagstuk erkenning S&D Jaargang 72 nummer 1 Februari pp 32-41 statistische bijlage website M Dejemeppe B Van der Linden Réduction des cotisations patronales: tout miser sur les bas salaires Regards Economiques Octobre publicaties: www frankvandenbroucke uva nl