This data set provides data on unemployment benefit schemes in 34 welfare states.
The ageing of populations and hampering economic growth increase pressure on public finances in many advanced capitalist societies. Consequently, governments have adopted pension reforms in order to relieve pressure on public finances. These reforms have contributed to a relative shift from public to private pension schemes. Since private social security plans are generally less redistributive than public social security, it can be hypothesized that the privatization of pension plans has led to higher levels of income inequality among the elderly. Existing empirical literature has mainly focused on cross-country comparisons at one moment in time or on time-series for a single country. This study contributes to the income inequality and pension literature by empirically analysing the distributional effects of shifts from public to private pension provision in 15 European countries for the period 1995-2007, using pooled time series cross-section regression analyses. Remarkably, we do not find empirical evidence that shifts from public to private pension provision lead to higher levels of income inequality or poverty among elderly people. The results appear to be robust for a wide range of econometric specifications. JEL-codes: H53, H55, and I32
Most analyses of social prot ect ion are focussed on public arrangem ent s. However, social effort is not rest rict ed t o t he public dom ain; all kinds of privat e arrangem ent s can be subst it ut es t o public program s. I n fact , in several count ries t here has been a shift from public t owards privat e social arrangem ent s. OECD-dat a indicat e t hat account ing for privat e social benefit s has an equalising effect on levels of social effort across a num ber of count ries. This suggest s t hat public and privat e social expendit ures are com plem ent ary t o som e ext ent. But t heir dist ribut ional effect s differ. I n all OECD count ries, t he social prot ect ion syst em causes a m ore equal dist ribut ion of incom es. I ndeed, using cross-count ry dat a, we find a negat ive relat ionship bet ween public social expendit ures and incom e inequalit y and a posit ive relat ionship bet ween public social expendit ure and incom e redist ribut ion. But we do not find a significant posit ive relat ionship bet ween privat e social expendit ures and incom e inequalit y or incom e redist ribut ion. Consequent ly, changes in t he public/ privat e-m ix in t he provision of social prot ect ion m ay affect t he redist ribut ive im pact of t he welfare st at e. JEL-cla ssifica t ion : D3, H22, and H55 Ke yw or ds: Social Pr ot ect ion, Privat e Social Expendit ur e, I ncom e Dist ribut ion * The paper elaborat es on a lect ure by Goudswaard at t he Univer sit y of Fribourg, Swit zer land, May 13 t h 2008. This st udy is part of t he research program 'Reform ing Social Secur it y': www.hsz.leidenuniv.nl. Financial support of St icht ing I nst it uut GAK is grat efully acknow ledged. Th e r e dist r ibu t ive im pa ct of pu blic a n d pr iva t e socia l e x pe n dit u r e *
A wide variety of tax regimes for (occupational) private pension saving are in place around the world. Generally, pension saving is taxed at a relatively low rate, although the revenue loss due to tax facilities for pension savings and/or pension tax expenditures may differ across countries. A strong fiscal stimulus to build up pension capital will support funding. However, these tax facilities may become an expensive business for governments. This paper investigates the ex ante budgetary effects of a cash-flow tax regime for pension savings by full present-value calculations. The fiscal subsidy on pension savings in several (European) countries is often associated with the application of the cash-flow treatment of pensions under the personal income tax: pension contributions are tax exempt, capital income of pension funds is tax-exempt, and pension benefits are taxed, but usually the elderly aged 65 years and over are taxed at a relatively low rate. This form can be described as EET, with E denoting an exemption or relief from tax and T denoting a point at which tax is payable. Indeed, tax treatment of pension saving can have other forms as well. We consider a specified form of a comprehensive income tax system (TTE) as an appropriate benchmark. Using the TTE-benchmark, the ex ante budgetary cost of the current tax treatment of pension saving in countries can be quantified. We employ an empirical analysis for the Netherlands, because this country belongs, with its three pension pillars and its sound funding, to the leading group of countries in Europe with a solid pension system. Our calculations, using Income Panel Data from Statistics Netherlands for the years 1990-2003, show that current taxation on a cash-flow basis means on balance a major loss to the Treasury (compared to the benchmark). For the year 2003 we estimate a fiscal subsidy associated with the current Dutch tax rule of 1.2 to 1.5 percent of GDP, depending on the assumed rate of return on pension capital. JEL-classification: H24, H30, H55, and J32Keywords: pensions and annuities, tax treatment of pension savings, revenue loss to the Treasury * Revised version of papers presented at the 60 th Congress
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