WP 2016-338

The Australian age pension is noncontributory, funded through general tax revenues and means tested against pensioners?private resources, including labour earnings. This paper constructs an overlapping generations (OLG) model of the Australian economy to examine the economy wide implications of several counterfactual experiments in the means testing of the age pension. These experiments include policy changes that both relax and tighten the existing mean test. We also consider a policy change that only exempts labour earnings from the means testing. Our simulation results indicate that tightening the existing means test combined with lower income tax rates leads to higher labour supply, domestic assets and consumption per capita, as well as to welfare gains in the long run, while labour earnings exemptions from the means testing have largely positive e¤ects on labour supply at older ages. Population ageing is shown to further strengthen the case for the pension means testing.Social Security Administrationhttp://deepblue.lib.umich.edu/bitstream/2027.42/121942/1/wp338.pdfDescription of wp338.pdf : Working pape

Comparing budget repair measures for a small open economy with growing debt

We quantify the macroeconomic and welfare effects of alternative fiscal consolidation plans in the context of a small open economy. Using an overlapping generations model tailored to the Australian economy, we examine immediate and gradual eliminations of the existing fiscal deficit with (i) temporary income tax hikes, (ii) temporary consumption tax hikes and (iii) temporary transfer payment cuts. The simulation results indicate that all three fiscal measures result in favourable long-run macroeconomic and welfare outcomes, but have adverse consequences in the short run that are particularly severe under the immediate fiscal consolidation plan. Moreover, our results show that cutting transfer payments leads to the worst welfare outcome for all generations currently alive. Increasing the consumption tax rate results in smaller welfare losses, but compared to raising income taxes, the current poor households pay much larger welfare costs. The adverse effects on wellbeing of current generations highlight political constraints when implementing a fiscal consolidation plan. However, after compensating current generations for all welfare losses, there is still an overall efficiency gain. This implies possibilities to devise a fiscal consolidation plan supported by a compensation scheme to improve wellbeing of future generations.This research was supported by the Australian Research Council Centre of Excellence in Population Ageing Research (CEPAR) under grant CE110001029

Sustainable and equitable pensions with means testing in aging economies

A means-tested pension system has a distinct feature that tailors the level of pension benefits according to individual economic status. In the context of population aging with widening gaps in life expectancies, we show that this feature generates an automatic mechanism that (i) mitigates the pressing fiscal cost of an old-age public pension program (fiscal stabilization device) and (ii) redistributes pension benefits to those in need with shorter life expectancies (redistributive device). To evaluate this automatic mechanism, we employ an overlapping generations model with population aging. Our results indicate that this novel mechanism plays an important role in containing the adverse effects of population aging on the fiscal costs and enhancing the progressivity of a pension system. More pronounced aging scenarios further strengthen the role of this mechanism. A well-designed means test rule can create a sufficiently strong automatic mechanism to keep public pensions sustainable and progressive under population aging

Les Misérables: analysis of low SWB across the world

Global trends indicate that the prevalence of low subjective wellbeing is on the rise, though not all regions are equal in terms of both absolute levels and their trajectories. In this paper, we explore the relative importance of individual- and country-level factors in predicting low SWB. Put differently, we ask if a person found themselves behind a veil of ignorance, should they want to know who they will be or what country they will live in to better understand their risk of having low wellbeing. To answer this question, we leverage data from the most extensive wellbeing survey in the world—the Gallup World Poll. We explore people's likelihood of reporting low evaluative wellbeing (that their life is close to the worst possible life on the Cantril ladder) and low experiential wellbeing (reporting having felt angry, sad, stressed, and worried for most of the day yesterday). Using multilevel models on both measures, we show that individual factors have the greatest explanatory power across both measures, but that country level factors are almost four times more important in explaining the variation in low evaluative wellbeing than low experiential wellbeing around the world. We also present evidence that individual and country-level factors interact, suggesting that a complex system of people and places determines people's likelihood of reporting low SWB

WP 2016-337

Means testing can balance the need to provide adequate retirement incomes with the requirement that such provision is fiscally sustainable and economically efficient. Critics of the policy suggest that to reduce benefits as a retiree’s income and/or wealth increase is to discourage work and savings. Yet such distortions are small compared to those resulting from large earnings related pensions that, due to demographic change, require greater levels of financing via payroll taxes. Some form of means testing exists in most countries, usually involving small, safety-net schemes that target the poorest retirees (e.g., the Supplemental Security Income program in the U.S.). But an appropriately designed means-testing instrument can also be used to reduce the liability of large, publicly financed social security promises by excluding the affluent. This paper summarises means-testing design and implementation in a number of OECD countries as well as tackling key criticisms of means testing. In doing so, we discuss a number of recent, cutting-edge modelling approaches and empirical insights that examine economic impacts of means testing in the Australian and U.S. contexts.Social Security Administrationhttp://deepblue.lib.umich.edu/bitstream/2027.42/121944/1/wp337.pdfhttp://deepblue.lib.umich.edu/bitstream/2027.42/121944/4/wp337.pdfDescription of wp337.pdf : Working paperDescription of wp337.pdf : Working pape

Uncertainties and opportunities in delivering environmentally sustainable surgery:the surgeons' view

Surgery is a carbon‐heavy activity and creates a high volume of waste. Surgical teams around the world want to deliver more environmentally sustainable surgery but are unsure what to do and how to create change. There are many interventions available, but resources and time are limited. Capital investment into healthcare and engagement of senior management are challenging. However, frontline teams can change behaviours and drive wider change. Patients have a voice here too, as they would like to ensure their surgery does not harm their local community but are concerned about the effects on them when changes are made. Environmentally sustainable surgery is at the start of its journey. Surgeons need to rapidly upskill their generic knowledge base, identify which measures they can implement locally and take part in national research programmes. Surgical teams in the NHS have the chance to create a world‐leading programme that can bring change to hospitals around the world. This article provides an overview of how surgeons see the surgical team being involved in environmentally sustainable surgery

Reducing the environmental impact of surgery on a global scale: systematic review and co-prioritization with healthcare workers in 132 countries

Background Healthcare cannot achieve net-zero carbon without addressing operating theatres. The aim of this study was to prioritize feasible interventions to reduce the environmental impact of operating theatres. Methods This study adopted a four-phase Delphi consensus co-prioritization methodology. In phase 1, a systematic review of published interventions and global consultation of perioperative healthcare professionals were used to longlist interventions. In phase 2, iterative thematic analysis consolidated comparable interventions into a shortlist. In phase 3, the shortlist was co-prioritized based on patient and clinician views on acceptability, feasibility, and safety. In phase 4, ranked lists of interventions were presented by their relevance to high-income countries and low–middle-income countries. Results In phase 1, 43 interventions were identified, which had low uptake in practice according to 3042 professionals globally. In phase 2, a shortlist of 15 intervention domains was generated. In phase 3, interventions were deemed acceptable for more than 90 per cent of patients except for reducing general anaesthesia (84 per cent) and re-sterilization of ‘single-use’ consumables (86 per cent). In phase 4, the top three shortlisted interventions for high-income countries were: introducing recycling; reducing use of anaesthetic gases; and appropriate clinical waste processing. In phase 4, the top three shortlisted interventions for low–middle-income countries were: introducing reusable surgical devices; reducing use of consumables; and reducing the use of general anaesthesia. Conclusion This is a step toward environmentally sustainable operating environments with actionable interventions applicable to both high– and low–middle–income countries

Reducing the environmental impact of surgery on a global scale: systematic review and co-prioritization with healthcare workers in 132 countries

Abstract Background Healthcare cannot achieve net-zero carbon without addressing operating theatres. The aim of this study was to prioritize feasible interventions to reduce the environmental impact of operating theatres. Methods This study adopted a four-phase Delphi consensus co-prioritization methodology. In phase 1, a systematic review of published interventions and global consultation of perioperative healthcare professionals were used to longlist interventions. In phase 2, iterative thematic analysis consolidated comparable interventions into a shortlist. In phase 3, the shortlist was co-prioritized based on patient and clinician views on acceptability, feasibility, and safety. In phase 4, ranked lists of interventions were presented by their relevance to high-income countries and low–middle-income countries. Results In phase 1, 43 interventions were identified, which had low uptake in practice according to 3042 professionals globally. In phase 2, a shortlist of 15 intervention domains was generated. In phase 3, interventions were deemed acceptable for more than 90 per cent of patients except for reducing general anaesthesia (84 per cent) and re-sterilization of ‘single-use’ consumables (86 per cent). In phase 4, the top three shortlisted interventions for high-income countries were: introducing recycling; reducing use of anaesthetic gases; and appropriate clinical waste processing. In phase 4, the top three shortlisted interventions for low–middle-income countries were: introducing reusable surgical devices; reducing use of consumables; and reducing the use of general anaesthesia. Conclusion This is a step toward environmentally sustainable operating environments with actionable interventions applicable to both high– and low–middle–income countries