Social security policy with public debt in an aging economy

This paper analyzes a social security policy with public debt in an overlapping generations growth model. In particular, the paper considers a situation in which population aging causes a heavy burden of social security payments where public debt is issued by the government to finance the payment. In the model presented below, an economy with an aging population may achieve two dynamically inefficient equilibria. Under certain conditions, the effects of pension reform and population aging on capital accumulation are entirely different between the two equilibria. Received: 23 July 2001/Accepted: 22 August 2002 I am deeply grateful to an anonymous referee and Professor A. Cigno, the Editor of this journal, for their valuable comments and suggestions. I am also grateful to Kazuyo Tanimoto and Kiheiji Nishida for their research assistance. Any remaining errors are my own. The research reported here was conducted as part of a larger study, the “Project on Intergenerational Equity” at the Institute of Economic Research, Hitotsubashi University. Financial support from Kani Hoken Bunka Zaidan is also gratefully acknowledged. Responsible editor: Alessandro Cigno.     

Demographic Change and Fiscal Sustainability in Asia

Changes in the population age structure can have significant effects on fiscal sustainability since they can affect both government revenue and expenditure. In this paper, we project government revenue, expenditure, and fiscal balance in developing Asia up to 2050 using a simple stylized model and the National Transfer Accounts data set. Rapidly aging countries are likely to suffer a tangible deterioration of fiscal sustainability under their current tax and expenditure system. On the other hand, rapid economic growth can improve fiscal health in poorer, relatively young countries with still-growing working-age populations. Overall, our results indicate that Asia’s population aging will adversely affect its fiscal sustainability, pointing to a need for Asian countries to further examine the impact of demographic shifts on their fiscal health.     

Population policy and individual choice

The general equilibrium implications of endogenous fertility for several social issues of population policy are examined. Laissez faire is found to lead to Pareto optimality within generations even in the presence of public goods and Malthusian diminishing returns. On the other hand, bequests emerge as a major potential source of Pareto inefficiency when parents care about the number and welfare of their offspring. Also considered are questions of intergenerational justice and equity using an intergenerational social welfare function. It is shown that maximizing the sum of utilities always leads to a larger population than maximizing per capita utility, but that the laissez-faire solution may lie outside the interval bounded by the two criteria.Invited Lecture at the First Annual Conference of the European Society for Population Economics, Rotterdam, 18–19 September 1987In preparing this paper, I have drawn heavily on joint work with Assaf Razin and Efraim Sadka, both of Tel-Aviv University, and on our book, Household and economy: Welfare economics of endogeneous fertility (Academic Press, New York 1987). I am indebted to two anonymous referees for helpful comments     

Expenditure Decentralization and Citizen Satisfaction with Healthcare: Evidence from Urban China

There has been considerable debate whether fiscal decentralization improves the provision of public goods. Based on individual-level data from a nationally representative survey and county-level data from national compendiums of financial statistics and demographic statistics, this study analyzes the effect of expenditure decentralization on citizen satisfaction with public healthcare in urban China. The results indicate a significantly positive effect of expenditure decentralization on citizen satisfaction with public healthcare. We also find evidence that the impact of decentralization is associated with residency status. Further investigation highlights the importance of local economic development in realizing the potential gains from a decentralized system. This study suggests that decision-making at lower levels of government is more responsive to local needs and that the efficiency gains of decentralization are not necessarily accompanied by equitable distribution of welfare.

     

Demographic Consequences of Gender Discrimination in China: Simulation Analysis of Policy Options

The large number of missing females in China, a consequence of gender discrimination, is having and will continue to have a profound effect on the country’s population development. In this paper, we analyze the causes of this gender discrimination in terms of institutions, culture and, economy, and suggest public policies that might help eliminate gender discrimination. Using a population simulation model, we study the effect of public policies on the sex ratio at birth and excess female child mortality, and the effect of gender discrimination on China’s population development. We find that gender discrimination will decrease China’s population size, number of births, and working age population, accelerate population aging and exacerbate the male marriage squeeze. These results provide theoretical support for suggesting that the government enact and implement public policies aimed at eliminating gender discrimination.     

Longitudinal Factor Analysis of Public Expenditure Composition and Human Development in Brazil After the 1988 Constitution

The way public policies are managed in Brazil has changed since the 1988 Federal Constitution. This study aimed to identify how changes in the structure of public expenditure composition at Brazilian federal states influenced local human development in these states. The states’ public expenditures were categorized according to their nature as spending indices whereas human development was measured through a human development index (HD). To verify the relationships between these variables, an accounting-social theoretical model was created and estimated through latent growth modeling (LGM). The LGM measurement period comprised five administration cycles of the Brazilian states (1988–2011). Variables were measured on data of the second year of state government term; their mean initial values and growth rates were recorded. Results show that, influenced by policies of centralized regulation promoted by the federal government, only the social spending growth rates had statistically significant effect on the human development growth rate, although not considered of great magnitude. Among mean initial values, the most significant was that of minimum spending (SIm), which denotes the direct impact of the Fiscal Accountability Law [Lei de Responsabilidade Fiscal, in Portuguese] on human development improvements. The mean initial value of economic spending also showed a positive and significant effect on HD growth rate.     

Social security in a general equilibrium model with endogenous government behavior

In this paper attention is focused on the economic and political effects of an aging population. For that purpose, a general equilibrium model is used that allows for an endogenous analysis of decisionmaking on government policies. We concentrate here on the effects of an aging population on expenditures and levels of social security benefits, the provision of public goods and services, the private output and intergenerational conflicts. Special attention will be paid to the effects of changes in the retirement age and in capital endowments. Furthermore, the effects of issues related to aging, as changes in the political influence structure and the motive of other-directedness by others, are investigated.The authors are grateful to the participants of the ISPE conference. They wish to thank in particular the discussants Jean Frijns, Pierre Pestieau and Harry van Dalen for their helpful comments.     

A Population Policy Rationale for the Twenty‐First Century

I propose that the primary goal of twenty‐first‐century population policies should be to strengthen the human resource base for national and global sustainable development. I discuss the shortcomings of the three dominant twentieth‐century population policy rationales: acceptance of replacement‐level fertility as a demographic goal; realizing a “demographic dividend” from the changing age structure; and filling the “unmet need” for family planning. I demonstrate that in all three cases the explicit incorporation of education into the model changes the picture and makes female education a key population policy priority. Population policies under this new rationale could be viewed as public human resource management. I argue that 20 years after the Cairo ICPD the international community needs a new rationale for population policies in the context of sustainable development and that a focus on human capital development, in particular education and health, is the most promising approach.     

Public expenditures,population aging and economic dependency in Canada, 1921–2021

The slowing population growth and consequent aging of the population in Canada and elsewhere have raised questions of the ability of such populations to provide support to their non-working or dependent, particularly their aged, members. Previous discussions have often been focussed on demographic measures of dependency, but more recent research has shown that, in North American society, the per capita costs of providing public programmes to an elderly member are between two and three times higher than those to a younger member of society. However, these measures have made no attempt to take into account changing labour market conditions. This paper develops measures of dependency to incorporate these latter effects. Calculations with Canadian data (1921–2021) show that demographic and economic dependency in Canada are currently at historically low levels. The numerical results also suggest that the effects of the general increases in labour force participation rates, that have characterized the past two decades, have more than offset the effects of the general increases in unemployment rates, and that future increases in participation rates and, perhaps, decreases in unemployment rates could provide a significant alleviation of the impacts of population aging on government expenditures in the years ahead.     

Private versus public old-age security

We directly compare two institutions, a family compact—a parent makes a transfer to her parent in anticipation of a possible future gift from her children—with a pay-as-you-go, public pension system, in a life cycle model with endogenous fertility wherein children are valued both as consumption and investment goods. Absent intragenerational heterogeneity, we show that a benevolent government has no welfare justification for introducing public pensions alongside thriving family compacts since the former is associated with inefficiently low fertility. This result hinges critically on a fiscal externality—the inability of middle age agents to internalize the impact of their fertility decisions on old-age transfers under a public pension system. With homogeneous agents, a strong-enough negative aggregate shock to middle-age incomes destroys all family compacts, and in such a setting, an optimal public pension system cannot enter. This suggests the raison d’être for social security must lie outside of its function as a pension system—specifically its redistributive function which emerges with heterogeneous agents. In a simple modification of our benchmark model—one that allows for idiosyncratic frictions to compact formation such as differences in infertility/mating status—a welfare-enhancing role for a public pension system emerges; such systems may flourish even when family compacts cannot.     

Outreach: helping achieve coordination in the field

The outreach officials of the National Population Program of the Philippines, with its 4 basic functions of research, training, information-education-communication, and clinic services, are trying to solve pressing problems which have been an outgrowth of developments of the early 1970s when population and family planning concepts were integrated into other government programs. Given the task of attacking these problems and coordinating the whole program was the newly organized Commission on Population (Popcom). The organizations which had their own programs cooperated with the government agencies. Initially thought of as workable, the early strategy was soon found to be inadequate, and in July 1975, Popcom implemented an integrated development approach in population work. The strategy is complex, and as it undergoes refinement, the program may well profit from the experiences or lessions gained by a number of agencies in carrying out population/development activities. The approach used by the Office of Nonformal Education of the Philippines Rural Reconstruction Movement is seen as potentially helpful to the outreach project in developing 3 types of leadership in order to properly integrate or link private and public agencies, and ensure a continuing development program: political, educational, and technical. It is stressed that outsiders can help, but it is the community which must basically do the job themselves. So different government technicians are trained so that they can effectively train other people from the community, and do it in such a way that the program will be continuing and self-releasing.     

促进我国流动人口基本公共卫生服务均等化的筹资机制研究

从筹资的角度分析制约我国地方政府向流动人口均等化供给基本公共卫生服务的原因,总结国外流动人口基本公共卫生服务筹资的经验,提出筹资机制改革建议。研究结果表明：我国现行的以常住人口为基数核定和安排基本公共卫生服务筹资责任的政策安排,给地方政府回避流动人口基本公共卫生服务的供给责任提供了制度空间,导致了流动人口公共卫生服务筹资“两头落空”的现象,影响了服务供给的均等化水平。我国须进一步强化中央政府的投入责任,保证流动人口基本公共卫生服务筹资的总体充足性,同时完善转移支付制度,增加对人口流入地的基本公共卫生服务经费补助金额,从而填补短期流动人口筹资政策的空白。     

Tax reform,population ageing and the changing labour supply behaviour of married women

The burden of financing retirement incomes in an ageing population is predicted to rise sharply in future decades. This paper investigates the effects of reforms to the Australian tax-benefit system involving a greater reliance on proportional taxation for raising revenue and a more targeted welfare system for cutting government expenditure, in order to reduce expected budget deficits. Estimates of changes in net incomes and hours of work suggest that reforms of this kind shift the tax burden to lower and middle income households with a second earner and that they can have counter-productive labour supply effects. The study explores the impact of projected increases in female work force participation and illustrates the importance of shifts in the labour supply of married women in predicting the fiscal effects of demographic change.I wish to thank the discussants of this paper, Sijbren Cnossen and Hiromitsu Ishi, for their detailed and constructive comments which have been most helpful in revising the paper. Thanks are also due to John Buchanan, Glenn Jones, John McCallum and Elizabeth Savage for their comments and suggestions.This research has been supported by a grant from the Australian Research Council.     

Code-Switching or Bahasa Gado-Gado in Discussion of Homosexuality in Indonesian Films

ABSTRACT

The article offers insights on how code-switching (CS) as a linguistic device and mechanism has served as an act of empowerment for the bilingual filmmaker to challenge government domination. Bahasa gado-gado, an Indonesian-English CS, is normatively unfavorable language use in Indonesia. The negative sentiment toward CS has been expressed by many Indonesians and the government. This article investigates the English switches in otherwise Indonesian popular cinematic texts: two films released after 1998, a critical political moment in Indonesia. Since the collapse of the New Order era in 1998, the use of bahasa gado-gado has been significantly visible in public spaces. Using a textual interpretive analysis, I show how CS is a tool used by characters to express “non-normative” sexual orientations in a liberating and open manner; by extension, CS in this context serves to expand monolithic definitions of Indonesianness.     

Social Security in China: Government White Paper

The largest financial problem faced by many aging societies is how to support their older, retired members. That support was once wholly a matter for individual families, with perhaps a minimal safety net offered by charitable institutions. Increasingly, in the usual course of economic development, the requisite transfers become a responsibility of the state—financed either through tax revenues or by pensions offered by (or required of) employers. The combination of lengthening life expectancy at later ages and falling fertility, however, makes those transfers ever more onerous as fewer workers are expected to support greater numbers of retirees. The situation is often likened to the approaching collapse of a Ponzi scheme. Not surprisingly, governments see an attractive solution in what is in effect a reprivatization of responsibility—not back to the family but right to the individual, through a system of individual retirement accounts (albeit with considerable state supervision). The financial trans‐fers—savings and later dissavings—then take place over each person's life cycle. Establishing a social security system—through pay‐as‐you‐go transfers, individual retirement accounts, or some combination of the two—is a major institution‐building and administrative task for a developing country, the more so in the context of rapid population aging. China is certainly a case of rapid aging, with the proportion of the population over age 60 projected to rise from 10 percent in 2000 to 20 percent by 2025 and 30 percent by 2050. The document excerpted below, a 2004 White Paper issued by the government of China, describes China's current social insurance provisions and the proposed expansion of coverage (beyond government employees and the urban formal sector) over coming years. In urban areas, it envisages pension coverage of “all eligible employees,” with an increasing emphasis on personal accounts. (Not mentioned is the situation of the large “floating population” of informal rural‐to‐urban migrants.) In rural areas, reliance on family support perforce continues: in 2003, only 2 million farmers are reported as drawing old‐age pensions. A safety‐net provision for the destitute elderly with no family provides for another 2.5 million. The document mentions various experimental schemes in rural areas. One, for medical insurance, covers 95 million residents; another offers an annual “reward” to those over 60 who have only one child (or two girls). The excerpts comprise sections I (Old‐age Insurance) and X (Social Security in Rural Areas) and the Conclusion of the White Paper, China's Social Security and Its Policy, issued by the Information Office of the State Council, Beijing, September 2004.     

Endogenous fertility,endogenous lifetime and economic growth: the role of child policies

We examine the effects of child policies on both transitional dynamics and long-term demo-economic outcomes in an overlapping-generations neoclassical growth model à la Chakraborty (J Econ Theory 116(1):119–137, 2004) extended with endogenous fertility under the assumption of weak altruism towards children. The government invests in public health, and an individual’s survival probability at the end of youth depends on health expenditure. We show that multiple development regimes can exist. However, poverty or prosperity does not necessarily depend on the initial conditions, since they are the result of how a child policy is designed. A child tax, for example, can be used effectively to enable those economies that were entrapped in poverty to prosper. There is also a long-term welfare-maximising level of the child tax. We show that a child tax can be used to increase capital accumulation, escape from poverty and maximise long-term welfare also when (a) a public pay-as-you-go pension system is in place and (b) the government issues an amount of public debt. Interestingly, there also exists a couple child tax–health tax that can be used to find the second-best optimum optimorum. In addition, we show that results are robust to the inclusion of decisions regarding the child quantity–quality trade-off under the assumption of impure altruism. In particular, there exists a threshold value of the child tax below (resp. above) which child quality spending is unaffordable (resp. affordable) and different scenarios are in existence.     

Household commodity demand and demographics in the Netherlands: a microeconometric analysis

We investigate the effects of demographics, household expenditure and female employment on the allocation of household expenditure to consumer goods. For this purpose we estimate an Almost Ideal Demand System based on Dutch micro data. We find that interactions between household expenditure and demographics are of significant importance in explaining the allocation to consumer goods. As a consequence, consumer goods such as housing and clothing change with demographic characteristics from luxuries to necessities. Furthermore, this implies that budget and price-elasticities cannot be consistently estimated from aggregated data and that equivalence scales are not identified from budget survey data alone. We reject weak separability of consumer goods from female employment. A couple with an employed spouse has a smaller budget share for housing and personal care and a larger budget share for education, recreation and transport and clothing compared to a couple with a non-employed spouse. Received: 12 September 1997/Accepted: 27 February 1998     

早期教育内涵在人口计划生育工作中的运用

"中国人口早期教育暨独生子女培养示范区"项目的启动和实施,适应了人口和计划生育工作新形式的要求,既能稳定低生育水平,又能提高出生人口素质,通过政府提供的公共服务平台,秉承新的工作思路:坚持以人为本,把人口和计划生育工作纳入改善民生的全局部署,为广大群众提供"恋、婚、孕、生、养、育、教"诸方面的优质服务,适应了广大人民群众渴望养育一个健康、聪明孩子的心理取向;弥补了优生筛查、出生缺陷干预与3～6岁教育之间的断档问题;面向所有的婴幼儿,让他们都能从自己的起点出发,拥有均等的塑造人生的权利。人口早期教育和独生子女培养是人口计生系统特有的行业概念,具有鲜明的时代性和行业特色,从理念推广到内容设计再到目标人群的干预,有一系列的实施方案。     

Household Budgets as a Social Indicator of Poverty and Inequality in South Africa

In the absence of a universally accepted method of calculating poverty, household expenditure can be used to provide an indication of inequality of wealth and serve as an indicator of poverty. Household expenditure comprises expenditure of private households on goods and services, irrespective of their durability. The portion of household budgets allocated to different types of goods and services provides an indication of the material standard of living of a population. The article discusses different definitions of poverty and compares the state of poverty according to these definitions in selected countries. This is followed by an analysis of South Africa’s economic position in the world and a comparison of the household budgets and demographic profile of South African households that fall into different income groups in order to identify the differences between the poorest and the wealthiest households in South Africa. Income inequality in South Africa is further elucidated by means of the Gini coefficient. A comparison is also made between the household budgets of the poorest households with the minimum financial living level requirements in South Africa to maintain their health and have acceptable standards of hygiene and sufficient clothing for their needs.     

人口老龄化与社会福利状况:国际比较及其启示

国际比较表明,无论是与人口老龄化程度相当的国家相比,还是与经济发展水平相当的国家相比,中国在公共福利支出和社会养老保障制度方面都存在明显的不足和滞后。人口老龄化挑战的真正涵义是:能否在经济、社会转型和人口迅速老龄化的条件下,建立起公平、合理、有效的国家制度安排和社会应对机制。解决人口老龄化问题的根本出路不仅在于加快经济发展,弘扬传统文化,而且在于完善社会保障制度、增加公共福利支出。