On welfare effects of increasing retirement age

We develop an OLG model with realistic assumptions about longevity to analyze the welfare effects of raising the retirement age. We look at a scenario where an economy has a pay-as-you-go defined benefit scheme and compare it to a scenario with defined contribution schemes (funded or notional). We show that, initially, in both types of pension system schemes the majority of welfare effects comes from adjustments in taxes and/or prices. After the transition period, welfare effects are predominantly generated by the preference for smoothing inherent in many widely used models. We also show that although incentives differ between defined benefit and defined contribution systems, the welfare effects are of comparable magnitude under both schemes. We provide an explanation for this counter-intuitive result.     

The effects on intra‐generational inequality of introducing a funded pension scheme: A microsimulation analysis for Estonia

This article uses a single male cohort microsimulation model to analyse the intra‐generational and distributional effects of a shift in Estonia from a defined benefit pay‐as‐you‐go (PAYG) pension system to a multi‐pillared system with a PAYG scheme with contribution‐based insurance components and a funded pension scheme. We contribute to the literature on microsimulation by showing how introducing contribution‐based insurance components and compulsory defined contribution (DC) schemes can increase pension inequality. Our results show that in the case of a high level of inequality in labour earnings and high long‐term unemployment rates, such as in Estonia, the introduction of a very strong link between contributions and future benefits leads to considerably higher inequality in pension incomes as measured by the Gini coefficient. Simulation results for Estonia suggest that inequality in old‐age pension incomes more than doubles when the reforms mature. In contrast, the inequality in replacement rates decreases.     

The ABCs of nonfinancial defined contribution (NDC) schemes

Nonfinancial defined contribution (NDC) pension schemes have been successfully implemented since the mid‐1990s in a number of European countries such as Italy, Latvia, Norway, Poland and Sweden. The NDC approach features the lifelong contribution–benefit link of a financial defined contribution (FDC) personal account scheme, but is based on the pay‐as‐you‐go (PAYG) format. At its start out, the PAYG commitments of the preceding defined benefit (DB) system are converted into individual personal accounts, allowing for a smooth transition from the DB to the DC format, while avoiding the very high transition costs inherent in a move from a traditional PAYG DB scheme to a fully funded FDC scheme. The NDC approach implemented by the rule book is able to manage the economic and demographic risks inherent to a pension scheme and, by design, creates financial sustainability. As in any pension scheme, the linchpin between financial stability and adequacy is the retirement age; in the NDC approach the individual retirement age above the minimum age is by design self‐selected and by incentives should increase the effective retirement age in line with population ageing. As a systemic reform approach NDC has become a strong competitor to piecemeal parametric reforms of traditional nonfinancial DB (NDB) schemes. While frequent, these reforms are far from transparent and usually too timid and too late to create financial sustainability while providing adequate pensions for the average contributor. This article offers a largely non‐technical introduction to NDC schemes, their basic elements and advantages over NDB schemes, the key technical frontiers of the approach, and the experiences of NDC countries.     

Assessing the pension reform potential of a notional defined contribution pillar

Abstract As some of the limitations of the traditional pay‐as‐you‐go defined benefit public pension model have become more evident in recent years, pension experts have begun searching for alternative models. The notional defined contribution model, also financed on a pay‐as‐you‐go basis, has emerged as one of the major new approaches. Drawing on evidence from schemes in six countries (Sweden, Italy, Poland, Latvia, Kyrgystan and Mongolia), this article aims to describe the notional defined contribution model and to review its strengths and limitations relative to the major alternatives, the pay‐as‐you‐go defined benefit model and the funded defined contribution model. A four‐pillar pension model is proposed.     

Promoting a higher retirement age: A prospect‐theoretical approach

Demographic ageing and the necessity of raising the retirement age is one of the most frequently debated topics among European welfare policy experts. This study used prospect theory as developed in behavioural economics to explain public attitudes towards pension reforms. It argues that, in line with prospect theory, negative incentives are more useful in changing people's attitudes in favour of a higher statutory retirement age than are positive incentives. Therefore, in the case of increasing life expectancy, defined‐contribution schemes that apply actuarial formulae linking the level of starting monthly pension benefits to life expectancy are more useful in promoting a higher retirement age than conventional defined‐benefit schemes, which typically do not forge an automatic connection between longevity and starting pensions. The implications of prospect theory for attitudes towards pension reforms were tested using Eurobarometer survey data collected in 2004 and 2009 in the Czech Republic, Poland and Slovakia.     

A “Swedish” actuarial balance for a notional defined contribution pension scheme with disability and minimum pension benefits

This article proposes a “Swedish” type actuarial balance sheet (ABS) for a notional defined contribution (NDC) scheme with disability and minimum pension benefits. The proposed ABS splits the pension system in two parts: the pure NDC part and the redistributive part, which includes the assets and liabilities originating from non‐contributory rights. The article contains a numerical example that sheds light on the real applicability of our proposal. The model has practical implications that could be of interest to policy‐makers, given that it integrates actuarial and social aspects of public pensions and discloses the real cost of redistribution through minimum pensions.     

Contribution evasion: Implications for social security pension schemes

However well-conceived a contributory national pension programme may be, however sound the economic principles on which it is founded, irrespective of whether it is based on defined benefits or defined contributions or whether it is publicly or privately managed, if participants fail to meet their contribution obligations the pension scheme cannot achieve the objective of providing adequate retirement income for them and their dependants. Contribution evasion has obvious implications for individuals. But it also has implications for the State, which may be importuned to supplement inadequate pensions from general revenues. The nature of contribution evasion and the reasons why contributions are evaded are surveyed. Possible practical measures which have been applied to promote compliance are described and the dangers of contribution evasion to participants and to the State are outlined.     

The risk of under-insurance in the Finnish statutory pension scheme for self-employed workers: A trajectory analysis

Using unique data on the contribution base, we investigate under-insurance within the statutory pension scheme for self-employed workers in Finland. Under-insurance is defined as the difference between pension-declared income and tax-declared income. The trajectory modelling technique applied has allowed us to estimate the levels of under-insurance for different subgroups and to identify possible explanatory factors. Under-insurance is found to be persistent and large. The analysis reveals six distinctive and homogenous sub-groups of self-employed workers. Close to 84 per cent of these workers pay too little in contributions, often leading to inadequate protection against personal risks. Especially for lower-income self-employed workers, this points to myopic behaviour as regards contributing to the self-employed statutory pension scheme and calls for fine-tuned economic incentives.     

Adjustment mechanisms and intergenerational actuarial neutrality in pension reforms

In the context of the reform of defined benefit pension systems under population ageing, we focus on the introduction of automatic adjustment mechanisms linked to life expectancy. Our goal is to establish a relationship between changes in the key parameters of the pension system and changes in life expectancy, applying the principle of intergenerational actuarial neutrality. For a defined benefit pension scheme, we first obtain the fundamental adjustment equation and then, for particular cases, we derive different designs of automatic adjustment mechanisms depending on the involved parameter. We include a numerical application only for illustrative purposes.     

Researching Quality of Life in Early Old Age: The Importance of the Sociological Dimension

Measurement of quality of life has become a major feature of much social and epidemiological research in health and social care settings. It is seen as an important alternative to more process‐based outcome measures but remains poorly defined. A major weakness is the absence of any coherent theoretical underpinning whether sociological, psychological or philosophical. Into this conceptual vacuum proxies for quality of life have been introduced. Quality of life [QoL] research into older populations has focused on measures of health and illness as equivalents of QoL. This paper argues that this response is inadequate as it reduces old age to a dimension of health, disability and disease. Instead, we argue that it is necessary to create a theoretically based measure of QoL in early old age which relates to those aspects of later life that are not defined by health. We present a model of QoL that is derived from aspects of contemporary social theory as they relate to the ontology of late modernity. In particular, we utilize a model based upon needs satisfaction. The model contains four domains: Control, Autonomy, Pleasure and Self‐realization. The measure consists of a 19‐item scale. The four domains load on to a single latent QoL factor. We argue that the CASP 19 scale offers an approach to QoL that integrates a sociologically based model of quality of life with a meaningful and valid research instrument.     

Developing Models for Day Services

This paper reports an evaluation of a rural activity project for people with learning difficulties. The project is situated in (but not a regular part of) an agriculture college. Both statutory and voluntary interests are represented in the management of the scheme, which is funded by the All Wales Strategy for the Mentally Handicapped through the local authority. Despite the widespread presence of ideas about normalization and carer participation, key stakeholders in the project appeared to draw on various aspects of three different models in describing, assessing and participating in the work of the scheme: a training for work model, a personal and social growth model, and an education for life model. We explore the question of whether such contrasting views can be tolerated in a single project, and their implications for policy and practice decisions. Each model has its distinctive consequences for project aims, selection, programme planning, staffing requirements, future development objectives and desirable project outcomes. The debate has implications for the way in which policies of normalization are operationalized in and beyond the field of learning difficulties.     

On the predictive power of the term structure of interest rates for future inflation changes in the presence of political instability: the Turkish economy

This study investigates whether the term structure contains useful information about future inflation for Turkey during 1990–2000, a period of high inflation, high budget deficits, and political instability. Constant parameter and time varying parameter models are rejected by the data. The relationship between term structure of interest rates and inflation changes is found to be explained by a time-varying-parameter model with Markov-switching heteroskedastic disturbances. Thus, the term structure of interest rates is limited as a guide for monetary policy in an economy subject to regime changes such as that of Turkey. Stability can be achieved only by reducing inflation through circumscribing substantial government budget deficits and the political instability underlying them.     

The provision of complementary pensions: Objectives, forms and constraints

In all former centrally planned economies, the question of how to restructure old-age income provisions and open the way to non-governmental, complementary pension schemes is being posed. This paper deals with four main areas of that problem. First, the various objectives of public and complementary schemes are discussed. The paper argues that without a broad consensus among the major interested parties there is a considerable danger that envisaged objectives will not be achieved. The second section reviews the main forms of complementary pension scheme and discusses the central characteristics of occupational and personal schemes. The third section addresses two critical policy areas: the kind of regulations that may be required in order to enforce the social and economic objectives; and the likely social and economic implications. On the basis of experience in OECD countries and the specific situation in countries in transition, the final section offers some tentative conclusions for Czechoslovakia, the main one being that during the initial phase of economic transition preference should be given to a simple defined contribution plan. Such a complementary scheme would be consistent with the lack of developed financial markets and the privatization plan of the government and require neither a great number of highly trained accountants and actuaries nor the comprehensive set of regulations a defined benefit plan is likely to dictate.     

Family-Centered Care

Abstract

Recent trends in medicine reflect an attempt to be more patient-centered and while this is progress from the disease- or provider-focused model familiar in healthcare, the experiences and contributions of family as caregivers continue to be overlooked in some settings. The family-centered care model, developed most notably in pediatrics, but emerging in HIV, cancer, and aging, is presented as a resource to increase family involvement at the end of life. In this paper, family-centered care is defined, caregiving trends including support needs of formal and informal caregivers are discussed, and barriers to family-centered services are identified. Reintroducing family into the focus of care at the end of life is the primary goal of this paper. The family-centered model of care offers an appropriate framework for understanding the value of family in end-of-life care and fits well with social work perspectives that understand individuals in the context of their family system and greater environment.     

A Plea For Greater Attention on the Data in Policy Analysis

The technical difficulties associated with building and solving applied general equilibrium (GE) models seem to have distracted our attention from the data. In this article, we forcefully stress that whatever the sophistication of the GE analysis, it is only worth the quality of the supporting data it utilizes. We first highlight an example of a flagrant flaw in officially published input–output data (factor–income shares) by an LDC (Turkey), which many researchers use without question. We then make use of an applied GE model to evaluate the dynamic gains for Turkey from currently debated trade policy options and compare the predictions using conservatively adjusted, rather than official, data on factor shares. We show that the predicted welfare gains are not only of a different order of magnitude, but in some cases, of a different sign; hence, suggesting contradictory policy recommendations.     

Straddling Two Continents: Social Policy and Welfare Politics in Turkey

There has been an increasing academic interest in understanding the dynamics of social policy in the Middle East and developing a conceptual ‘model’ to account for the particular characteristics of welfare arrangements in the countries of the region. While part of this framework, Turkey represents an exceptional case due to the Europeanization processes the country is undergoing in various policy areas, including social policy. The influence of the European Union on the shape of Turkish social policy, as illustrated by the government's recent reforms in the labour market and social security domains, is hereby used to outline the position of Turkey vis‐à‐vis both the Southern European welfare regime and the Middle Eastern pattern. This article seeks to assess the dynamics of Turkish social policy in light of the country's political, and socio‐economic dynamics, as well as the external influence exerted by the EU and international financial institutions. The aim is to examine Turkish welfare arrangements in a comparative manner and consider its suitability with reference to either of the two models. Looking at major trends in social security and the labour market, the article argues for a Turkish ‘hybrid’ model embodying the characteristics of both. Subject to EU explicit pressures for reform absent elsewhere in the Middle East, the data nevertheless show that Turkey has yet to make the qualitative leap forward that could place it firmly within the Southern European welfare group.     

Rate of return guarantees for mandatory defined contribution plans

Many mandatory defined contribution systems provide a rate of return guarantee. The guarantees provided have generally been backed by a sequential combination of two or more of six different financing sources. Those sources are (1) reserve funds established within the pension fund, using investment earnings on the fund; (2) reserve funds established using funds provided by the owners of the pension fund management companies; (3) a defined benefit plan associated with the defined contribution plan; (4) central guarantee funds financed by contributions from pension funds; (5) funds provided by employers; and (6) the government. Nearly all the guarantees are first backed by a limited liability guarantee derived from investment earnings that would otherwise accrue to workers. In some instances, the guarantee may be funded by employers. Then they are backed by a guarantee financed by capital market institutions — pension fund managers directly or a central guarantee fund. Lastly, they are backed by an unfunded governmental guarantee with unlimited liability that is contingent on the insufficiency of private sector guarantees.     

障碍研究论述与社会参与：无障碍、通用设计、能力与差异

障碍研究在过去40年的发展奠定了其对公共政策影响的基础。障碍者社会参与的责任逐渐由以往个人承担与调适，转向社会与国家承担。本文简述西方国家障碍研究的两个主要论述--社会模式与普同主义取向，对比这两个主要论述所衍生出的政策：由早期的无障碍设施到通用设计，至最近的能力取向。障碍者参与社会生活与活动是其基本权利的一部分，这项权利内涵具有积极性，需要政府与社会投入资源，改善外部社会结构与环境，使环境对障碍者更为友善，为其社会参与权利提供保障。     

Was Wright Wrong? High-Class Jobs and the Professional Earnings Advantage*

Objectives. Wright and Perrone (1977) was an outstanding empirical analysis of social stratification, a major contribution to Marxist analysis of classes in modern capitalism, and an important contribution to popular discourse and academic research on “social class” in the United States. Since 1977, however, debates with “bean counters” in sociology and “epistemological and ontological purists” within Marxism have yielded a multidimensional game‐theoretic exploitation model that falls far short of Wright and Perrone (1977) on standards of social science, Marxism, commonsense, and the potential for inspiring future scholarship. Thus I propose moving away from game theory and toward Tilly's (1998) model of durable inequality, which might accommodate the dialectic of life and work. Methods. An OLS regression analysis of income inequality among white men in the United States illustrates the benefits of this reconceptualization in capturing the interactive effects of occupational titles, educational credentials, and class relations. Results. Specifically, we find that the professional earnings advantage is associated with J.D. and M.D. credentials and small‐scale proprietorship, rather than supervisorial authority or ownership in large‐scale corporate practice. Conclusions. These results suggest that we should reconsider the Wright (1997) conceptualization of Marxist class categories.     

Marriage among the Gypsies of Turkey

Despite the fact that Gypsies have always been traveling communities, it is difficult for them to preserve their own customs and traditions forever. In the light of studies and research about Gypsies so far, conclusions could be formed that the first and foremost maintaining factor is marriage that can be idealized and practiced differently among Gypsies around the world. This work introduces the image and practice of marriage of the Gypsies of Turkey. It has been found out that endogamy is especially very common among the Gypsies of Turkey since it is considered to be the only way of protecting their communal life. Within the general concept of the endogamic marriage, these types have been discussed under such headings as “purchasing,” “exchanging,” and “abducting.” Other issues which have been raised in the study, are polygamy and divorce which are also very common among the Turkish Gypsies. Finally, the significance of marriage for the families and having children as a result have been analyzed.