Extending Private Pension Coverage in a Middle-Income Country

Abstract

Government policies can play an important role in the development of private pensions. These policies can be divided into three groups: (1) policies that are essential to providing a favorable economic environment for pensions; (2) policies that encourage the development of private pensions, given that a favorable economic environment for them exists; and (3) policies that deal with weaknesses of private pension systems. While the policies discussed are generally applicable for middle-income countries, the economic and legal environments for pensions differ across countries. This article focuses in particular on the situation in Brazil.     

Central American regional integration in science,technology and innovation: a new challenge

In recent years in international cooperation policies and public policies of the Central American (CA) region multilateral mechanisms were generated to form interinstitutional networks that drive science, technology, and innovation (STI) as the engine for regional economic growth. In the agreements social, political, and economic disparity were taken into account in order to stimulate the articulation between actors and potentialize local strengths to generate critical mass on the level of knowledge and build a research core base. The aim of this article is to identify institutional and productive capacities acquired in the countries of the region (CA) that encourage interaction on a national level and create favorable conditions to generate regional agreements to build regional interaction on STI. Results show deficiencies in the linking between public and private agents derived from the limited funds destined to I+D, the insufficient channels of information and the lack of interest of the investigations to respond to priority problems of the region, which weaken links with the productive sector. From there, arise the need to build a joint and collaborative work agenda to consolidated the institutional environment and favors the capacities to absorb knowledge.     

Catching up,forging ahead or falling behind? Central and Eastern European development in 1990–2005

This paper aims to assess the economic development and development policies in the Central and Eastern European (CEE) countries in 1990–2005, from the collapse of the USSR to the enlargement of the European Union. A great number of authors have generally seen the transition as a very positive process. They have concluded that the reform policies focusing on macroeconomic and price stability have been the key to success for CEE economies. A reliable economic environment is, of course, instrumental for longer-term economic success, as exemplified by the prolonged crisis in most of the former Soviet Union. Our analysis of the economic development and competitive advantages in the region, however, leads to the conclusion that the specific approach to transition that the Central and Eastern European countries followed came at a rather high cost. Comparative neglect and weakness of a set of policies crucial for longer-term development, such as science, technology and innovation policies, has led to deterioration in the last decade rather than the strengthening of the competitive advantages of Central and Eastern European economies. Furthermore, we argue that, in most cases, CEE countries have unfortunately overlooked or misjudged a number of development challenges, and have thus implemented policies that have generated growth at the cost of rapidly increasing risks. This is how the financial fragility of several Central and Eastern European countries has recently increased drastically, and the region seems to have virtually arrived at the brink of economic collapse. Since the CEE countries joined the European Union, the CEE governments have gradually moved towards acquiring a more active role in economic development. These policies need, however, to be strengthened considerably and reinforced by macroeconomic policies that curb current excessive dependence on foreign-financed growth.     

Transatlantic Roundtable on High–skilled Migration and Sending Countries Issues

Globalization and the advent of the knowledge economy have created a new context where there is a greater demand for the highly skilled, especially in the information technology (IT) industry. High–skilled migration has become increasingly more complex, even if in recent years the term "brain drain" has become a generic reference to "high–skilled migration" of all types. It has also become clear that brain mobility does not automatically translate into "brain drain", and that impacts vary by the types of skills held by migrants.
The meeting demonstrated that while much is known about high–skilled migration and its effects on source countries, there is also a great deal yet to be learned in a dynamic environment. Many participants deplored the lack of reliable data, which makes it difficult to know what is really going on and to establish appropriate policies. Clearly, there are an array of policies that can offset possible adverse effects of skilled mobility and even leverage the flow into positive outcomes for source countries. A key element is improvement of the population's general level of education. Low levels of skills keep average labour productivity and wages low and therefore retard development. Long–term strategies to promote economic growth are needed to enable developing countries to retain and draw back their highly skilled and address the negative effects of the brain drain. Migrants themselves can play an important role through their remittances, diaspora networks, and own willingness to return – at least temporarily — to share their skills and contribute to economic progress. Finally, destination countries can facilitate the process through policies that promote circulation of highly skilled migrants.     

Best Practices to Reduce Migration Pressures

Are there best practices to foster economic development, reduce population growth, and protect the environment in source countries of unauthorized migration, in a manner that reduces emigration pressures and redirects migration towards legal channels? This paper outlines cooperative actions that can be undertaken by both source and receiving countries to better manage the movements of people over national borders. There are two broad approaches to foster wanted migration and to reduce unwanted migration. First, maximize migration’s payoffs by ensuring that the 3 Rs of recruitment, remittances, and returns foster economic and job growth in emigration areas. Second, make emigration unnecessary by adapting trade, investment and aid policies, and programmes that accelerate economic development and thus make it unnecessary for people to emigrate for jobs and wages. Most of the changes needed for stay–at–home development must occur in emigration areas, but immigration areas can cooperate in the management of immigration, guest workers, and students, as well as in promoting freer trade and investment, and in targeting aid funds. In a globalizing world, selective immigration policies may have important development impacts, as with immigration country policies toward students, and workers in particular occupations, such as nurses and computer programmers, as well as with mutual recognition of occupational licenses and professional credentials. Trade policies affecting migration are also important, such as trade in services and laws regulating contracts between firms in different countries that allow the entry of lower wage workers as part of the contract. opening channels for legal migration can deter irregular migration.     

Labor emigration and economic development

"This article is concerned with the extent to which labor migration is advantageous to the labor exporting country. It focuses on development consequences of labor emigration with a view toward the formulation of policies which can shape those consequences into a positive force for development, discussing a wide variety of potential costs and benefits generated by labor emigration. The issue of private versus public choice relative to emigration is examined, as [are] the major economic benefits and costs of labor emigration and the influence of development objectives on the valuation of these costs and benefits. Policies by which emigration countries may increase the benefits from labor emigration and reduce the costs are outlined."     

Soviet Marxism and population policy

American demographers have maintained that Marxism, notably Soviet Marxism, is consistently pronatalist. The Soviet view is said to be that population growth is not a problem and that birth control policies in either developed or developing societies are to be rejected; the “correct” (i.e., socialist) socio‐economic structure is the true solution to alleged population problems. Such representations of Soviet thought greatly oversimplify the Soviet position as well as fail to discern the changes in Soviet thought that have been occurring. Since the 1960's Soviet writers have increasingly acknowledged that population growth is, to a considerable degree, independent of the economic base of society and that conscious population policies may be needed to either increase or decrease the rate of population growth. Even socialist societies can have population problems. And where population growth is too rapid, as in the developing countries, policies to slow such growth are needed because of the threat to economic development. However, the Soviets continue to stress that birth control policies must go hand‐in‐hand with social and economic development policies if they are to be effective.     

Future perspectives on work and family dynamics in Southern Europe: the importance of culture and regional contexts

The Southern countries model (Portugal, Spain, Italy, and Greece) take a specific family-oriented approach to work–family reconciliation. They are family-oriented in that they entrust the family with more responsibilities that in other countries. Work–family reconciliation is considered as a political action that gives quite limited and unstable support to encourage women’s labour-market participation; this results in the poor development of external services and in few benefits for women, who have to undertake multiple roles inside and outside the family. In these countries, negotiation is left to the private spheres of the couple or local communities, so that each family can decide on the best way to use the existing policies and consider the possibilities available to them. In this sense it is not possible only to apply ‘outside models’ (such as the Nordic, French, German, etc.) to find an effective approach for these countries. The special issue, starting from the current situation explores possibilities for future scenarios in Southern Europe countries concerning work–family dynamics. It includes general comparative papers or case study on work-care arrangements, family and care policies, early childhood education and care (ECEC) with regard to family well-being, gender equality, fertility or father involvement in Southern European countries.     

Gender inequalities in pensions: different components similar levels of dispersion

While the average gender gap in pensions is quite well documented, gender differences in the distribution of pensions have rarely been explored. We show in this paper that pension dispersion is very similar for men and women within the French pension system of a given sector (public or private). Gender differences are less marked among retired civil servants than among former private sector employees. However, the determinants of these inequalities are not the same for men and women. Using a regression-based decomposition of the Gini coefficient, we find that pension dispersion is mostly due to dispersion of the reference wage for all retirees but gender differences exist. For women, in particular, pension dispersion is also due to the dispersion in contribution periods. We also decompose the Gini coefficient by source of pension to measure the impact of institutional rules (minimum pensions, survivor’s pension) on the extent of pension inequality. Unexpectedly, we find that the impact of minimum pensions is limited, although slightly larger for civil servants than for private-sector employees. Survivor’s pension schemes, on the other hand, contribute positively to pension dispersion among retired women.     

Long-Term Care

This study examines the redistributive effects of public pensions on old-age income inequality, testing whether public pensions function as the “great equalizer.” Unlike the well-known alleviating effect of public pensions on old-age poverty, the effects of public pensions on old-age income inequality more generally have been less examined, particularly outside Western countries. Using repeated cross-sectional data of elderly Koreans between 1998 and 2010, we applied Gini coefficient decomposition to measure the impact of various income sources on old-age inequality, particularly focusing on public pensions. Our findings show that, contrary to expectations, public pension benefits have inequality-intensifying effects on old-age income in Korea, even countervailing the alleviating effects of public assistance. This rather surprising result is due to the specific institutional context of the Korean public pension system and suggests that the “structuring” of welfare policies could be as important as their expansion for the elderly, particularly for developing welfare states.     

How Well-Informed Are Pension Scheme Members on Their Future Pension Benefits? Evidence from Ireland

One part of the policy response in many countries to increasing pension coverage will be greater private provision on the part of individuals. This requires that individuals are well informed about pensions. In this article, we assess levels of knowledge of pensions using a representative sample of older Irish adults. We find that two-thirds of individuals enrolled in pension schemes do not know what amount will be paid out on retirement and/or whether the payments will be in the form of lump sums, monthly payments, or both. One policy implication is the need for increased information to be directed at certain groups, in particular, women and less educated people. More fundamentally, the results suggest that the mandatory elements in pension systems should be extended.     

Scientific Mobility, Career Progression, and Excellence in the European Research Area1

This paper explores the various aspects of mobility requirements and the relationship between competitiveness, excellence, and mobility in scientific research in the European Union (EU). The “expectation of mobility” in science plays an important role in shaping the European Research Area. Research argues that better economic opportunities and advanced migration policy in destination countries promote highly skilled migration. Empirical evidence shows that academics and researchers consider important determinants in the migration decision and destination to be the research environment and conditions, i.e. research support, infrastructures, demand for research and development (R&D) staff, and academics (Millard, 2005). While it can be argued that the European Research Area is designed to encourage the interchange of scientists, skills balance is essential to competitiveness in the European region. Despite the actions and measures taken in the context of the EC Mobility Strategy, unbalanced flows are still a weakness of the European Research Area. There is a need in Europe to coordinate science and migration policies at European and Member State level to enhance the attractiveness of European receiving countries and facilitate return of scientists to their sending nations. This paper, which focuses mainly on Austria, Greece, Italy, Portugal, and the United Kingdom, shows the uneven nature of scientific personnel flows within the European Research Area. The article argues that in Europe mobile scientists are often driven by necessity more than choice, and the longer they are away the more complicated it is to return. If the academic system proved impenetrable to return other opportunities in the private sectors might be explored by the researcher.     

Public or Private Management? A Comparative Analysis of Social Policies in Europe

Across the world, political leaders and policy experts frequently use the labels ‘public’ and ‘private’ to organize social policies. A line seemingly separates public from private efforts, with social policies publicly organized in some countries and privately organized in others. According to this perspective, a public social policy is undertaken by government or deals with a public matter. When a social policy is private, non‐public actors and institutions, like employers, undertake it or it deals with a private matter, like body control. This article examines whether public or private approaches to managing social policies are currently emphasized in European countries. I begin by defining social policy and then provide an overview of the public–private dichotomy in managing social policy. I review predominant typological frameworks of public–private organization of social policies and examine three welfare social policies and three social policies dealing with body control by comparing public–private organization of these six policy areas across 21 European countries. I conclude by discussing the limited diversity of public–private organizations of social policies in Europe.     

Gender and Pensions: An Analysis of Factors Affecting Women's Private Pension Scheme Membership in the United Kingdom

There has been considerable debate about the future sustainability of pension provision and, in particular, the precarious position of many female pensioners. The reasons for women's lower participation rates in private pensions than men's require greater investigation. Using the General Lifestyle Survey (GLF) 2008, this article examines the impact of various characteristics on the likelihood of contributing to a private pension, such as educational attainments, income, occupational group, full-time/part-time status, and whether an individual has any dependent children. It shows that these characteristics play an important role in access to private pensions. Finally, it suggests that strategies to alleviate disadvantages must take into account the complex circumstances that individuals experience throughout the life course, which result in gendered pension provision.     

Warum es kaum Pensionsfonds in Deutschland gibt. Kapitalmarktrisiken,Finanzindustrie und die Politik der Mindestverzinsung

Studies of the rise of private defined-contribution pension plans have traditionally focused on social policy concerns about the allocation of risks and costs for beneficiaries and employers. There is however another dimension of pension privatization, which situates it in the context of financial markets and—more broadly—the economic system. Here, regulations forcing private pension providers to guarantee a minimum rate of return on individuals’ pension assets make a crucial difference for financial markets because they incentivize fund managers to invest a greater chunk of plan portfolios in fixed-income securities and therefore away from equities. While different segments of the financial industry have divergent preferences over minimum return guarantees, politicians are caught in a dilemma: Should they prioritize predictable benefit levels or the development of equity markets? Using the case of the introduction of the German Riester Rente, we argue that, as politicians linked the introduction of private defined-contribution plans with cuts in statutory pensions, insurance firms in coalition with trade unions insisted on minimum guarantees, thereby restricting the expansion of equity markets in Germany.     

Characterizing private investments and implications for poverty reduction and natural resource management in Laos

We examine the patterns and characteristics of private investment in Laos, and how these evolve in relation to the Lao government's investment incentive policies in particular, and the wider State policies in general. Our goals are to: (1) systematically describe and analyze the patterns and characteristics of private investment in the country, and (2) analyze investment outcomes in terms of economic growth, poverty reduction and livelihoods. We argue that while private investments in the resource sector have contributed to economic growth, they have also negatively impacted local resources and communities. From a policy perspective, we highlight the need to examine the actual significance of policy incentives provided by the Lao government, especially with regard to its ability to direct investment decisions, in terms of both geography and sector.     

A Comparison of Early Retirement Pensions in the United States and Russia

Abstract

Early retirement pensions for particular occupations free national policy to establish the social security early retirement age at a later age that is more appropriate for the population as a whole. This paper focuses on early retirement pensions in the United States and the Russian Federation. While comparing early retirement pensions generally, the paper provides a more detailed discussion of the pensions for musicians. While this is an unconventional group to choose for the study of pensions, study of their pensions yields insights into the principles underlying retirement age policy in the two countries.     

Private sector unions: The myth of decline

Conventional wisdom holds that private sector labor unions are in “crisis” due to the loss of millions of members over the past two decades which has resulted in a dramatic decline in their economic viability and political power. Financial data for selected years between 1960 and 1987 are analyzed to show that, contrary to prevailing opinion, private sector unions are financially prosperous despite membership erosion. Evidence is also presented which indicates that union political efforts and influence have increased rather than declined in recent years. Resources have been allocated to political advocacy to obtain a more favorable public policy environment for labor organizations and to achieve gains that have eluded unions in collective bargaining. The author gratefully acknowledges the assistance of Ms. Sybil Jones at the National Institute for Labor Relations Research.     

INTERNATIONAL R&D SPILLOVERS AND OECD ECONOMIC GROWTH

This paper quantifies the cross-national spillover effects of government and private investment in research and development (ROD), using a panel data set of ten OECD countries. The results show that domestic private research is a significant determinant of both domestic and foreign productivity growth, and that foreign government research stimulates domestic private research. These findings are significant in that they provide empirical support for arguments in favor of international economic policy coordination, particularly in the area of international science and technology.     

Patterns of Australian and Canadian immigration 1900-1983

A historical analysis of trends in immigration to Australia and Canada from 1900 to 1983 is presented. The important role that immigration has played in the development of both countries is stressed. The steps taken to rethink immigration policies following the international economic crises of the mid-1970s are also considered, as is the increased demand for immigration by political refugees. The close relationship between political objectives and migration policies in both countries is emphasized. (summary in FRE, SPA)