Portability of Pension, Health, and Other Social Benefits: Facts, Concepts, Issues

Portability of social benefits across professions and countries is an increasing concern for individuals and policy makers. Lacking or incomplete transfers of acquired social rights are feared to negatively impact individual labor market decisions as well as capacity to address social risks with consequences for economic and social outcomes. The paper gives a fresh and provocative look on the international perspective of the topic that has so far been dominated by social policy lawyers working within the framework of bilateral agreements; the input by economists has been very limited. It offers an analytical framework for portability analysis that suggests separating the risk pooling, (implicit or actual) pre-funding and redistributive elements in the benefit design and explores the proposed alternative approach for pensions and health care benefits. This promising approach may serve both as a substitute and complement to bi- and multilateral agreements.portability, acquired rights, migration, bilateral agreements, risk pooling

Portability of pension, health, and other social benefits : facts, concepts, issues

Portability of social benefits across professions and countries is an increasing concern for individuals and policy makers. Lacking or incomplete transfers of acquired social rights are feared to negatively impact individual labor market decisions as well as capacity to address social risks with consequences for economic and social outcomes. The paper gives a fresh and provocative look on the international perspective of the topic that has so far been dominated by social policy lawyers working within the framework of bilateral agreements; the input by economists has been very limited. It offers an analytical framework for portability analysis that suggests separating the risk pooling, (implicit or actual) pre-funding and redistributive elements in the benefit designand explores the proposed alternative approach for pensions and health care benefits. This promising approach may serve both as a substitute and complement to bi- and multilateral agreements.Gender and Law,Health Monitoring&Evaluation,Population Policies,Pensions&Retirement Systems,Debt Markets

Portability regimes of pension and health care benefits for international migrants: an analysis of issues and good practices

The paper provides a first investigation into the portability of pension and health care benefits for international migrants. It is based on available literature and newly minted data, but more importantly on selective case studies from main migrant-sending and receiving countries. While exploratory, the paper achieves a better understanding of the realities on the ground and is able to distill key issues as well as identify good and best practices. The main conclusions include the following: First, only around 20 percent of migrants worldwide work in host countries where full portability of pension benefits, but not necessarily of health care benefits, to their home countries is ensured. Second, bilateral agreements are seemingly the current best practice to ensure portability for pension and health care benefits, although for the latter this is not always the case. Third, more actuarial-type structures should help to enhance portability. This is, in principle, straightforward for pensions and a defined contribution-type design. It is much more complicated for health care benefits. Last but not least, for improved benefit design and implementation, the information base needs to be broadened, including through more country case studies and tracer studies of migrants.

Portability of pension, health, and other social benefits: Facts, concepts, issues

Portability of social benefits across professions and countries is an increasing concern for individuals and policy makers. Lacking or incomplete transfers of acquired social rights are feared to negatively impact individual labor market decisions as well as capacity to address social risks with consequences for economic and social outcomes. The paper gives a fresh and provocative look on the international perspective of the topic that has so far been dominated by social policy lawyers working within the framework of bilateral agreements; the input by economists has been very limited. It offers an analytical framework for portability analysis that suggests separating the risk pooling, (implicit or actual) pre-funding and redistributive elements in the benefit design and explores the proposed alternative approach for pensions and health care benefits. This promising approach may serve both as a substitute and complement to bi- and multilateral agreements

Portability of pension, health, and other social benefits: Facts, concepts, and issues

Portability of social benefits across professions and countries is an increasing concern for individuals and policy makers. Lacking or incomplete transfers of acquired social rights are feared to negatively impact individual labor market decisions as well as capacity to address social risks with consequences for economic and social outcomes. The paper gives a fresh and provocative look on the international perspective of the topic that has so far been dominated by social policy lawyers working within the framework of bilateral agreements; the input by economists has been very limited. It offers an analytical framework for portability analysis that suggests separating the risk pooling, (implicit or actual) pre-funding, and redistributive elements in the benefit design, and explores the proposed alternative approach for pensions and health care benefits. This promising approach may serve both as a substitute and complement to bi- and multilateral agreements

Does formal work pay? The role of labor taxation and social benefit design in the New EU Member States

The analysis presented in this paper defines three different synthetic measurements of disincentives for formal work: two standard measurements, namely the tax wedge and the marginal effective tax rate (METR); and a new, innovative measurement called formalization tax rate (FTR). The novelty of the latter is that it measures disincentives stemming not only from labor taxation, but also from benefit withdrawal due to formalization. A descriptive analysis across a large number of OECD and Eastern European countries reveals that the disincentives for formal work - when measured through the FTR - are especially high for low-wage earners. This suggests that formal work might not pay in this segment of the labor market, in particular for the so-called mini-jobs and midi-jobs (low paying part-time work). Another novelty of the paper is its empirical approach. Using EU-SILC 2008 data and OECD Tax and Benefit data for six Eastern European countries (Bulgaria, Czech Republic, Estonia, Latvia, Poland, and Slovakia), we match disincentives for formal work to individual observations in a large data set. Applying a probit regression, the analysis finds a significant positive correlation between FTR or METR and the incidence of being informal. In other words, controlling for individual and job characteristics, the higher the FTR or the METR that individuals are facing is, the more likely they are to work informally. The tax wedge, on the other hand, yields a negative correlation. This indicates that the tax wedge is not sufficiently capturing disincentives for formal work. We also conclude that in cross-country analysis, it might be more useful to use the tax wedge that applies to low wage earners as opposed to average wage earners

Definitions, good practices, and global estimates on the status of social protection for international migrants

This paper analyzes the issue of social protection for migrants by looking at formal and informal social protection provisions. In particular, it presents the latest global data on the social protection status on migrants, including undocumented migrants. The paper gives special attention to lower-income countries drawing upon recent studies from the Southern African Development Community (SADC). It finds that migrants in poorer countries have very limited access to formal social protection such as social security systems, and that the legal social protection frameworks are far from making benefits portable. Rather, migrants have to rely on informal social protection, and it is often migration itself that constitutes a form of social protection for migrants and their families. This means that making migration safer for low-income migrants is vital to allow migrants to fully benefit from their migration experience and to ultimately enhance their social protection.Population Policies,,Health Monitoring&Evaluation,Emerging Markets,International Migration

Full Employment: A Distant Dream for Europe

Today, Europe is a continent of low participation, low employment labor markets. Many observers would like to blame poor employment outcomes on the Euro or on austerity. But these are dangerous distractions from real problems that constitute imperatives for structural reform. There are differences across countries, but there is a European model of work: almost every European economy has more stringent employment protection and more generous social benefits than peers in North America, Oceania, and East Asia. This has led to low labor force participation and high unemployment, especially among young Europeans. Layered on top of these weak labor markets is the rapid onset of aging; if policies are not changed, Europe will lose about a million workers every year for the next five decades, especially in the 2030s. In short, Europe has to increase both the demand for and supply of labor. To do so, Europeans have to begin viewing competition as a necessary good, not an unnecessary evil. Restructuring unemployment and pension benefits will help to increase participation and reverse the decline of the workforce, but policies that promote competition for jobs and mobility of job-seekers are needed to increase the demand for labor. To get to full employment, Europe has to alter the employment protection laws that give too much power to those with jobs while marginalizing others to the fringes of the economy. Europeans will have to reduce and restructure the generous social benefits that simultaneously discourage young people from searching seriously for work and encourage older workers to quit work too early. Europeans will have to view mobility of workers as a prerequisite of European integration, not just a possible consequence of it. If all this is augmented by reforms to reduce public debt, encourage enterprise and innovation, and stabilize finance, Europe will have a vibrant economy, with high participation and full employment

Active labor market programs: Employment gain or fiscal drain?

This paper provides a new perspective by classifying active labor market programs (ALMPs) depending on their main objectives and their relevance and cost-effectiveness during normal times, during a crisis, and during recovery. We distinguish ALMPs that provide: (i) incentives for retaining employment, (ii) incentives for creating employment, (iii) incentives for seeking and keeping a job, (iv) incentives for human capital enhancement, and (v) improved labor market matching. Reviewing evidence from the literature, we discuss direct and indirect effects of various interventions, their cost-effectiveness, and draw lessons for transition and developing countries. The paper concludes by providing a systematic overview of how, why, when and to what extent specific ALMPs are effective. In particular, the paper shows that ALMPs retaining employment, like work sharing schemes, should be applied in severe recessions for a limited time period of time only. ALMPs creating employment, like hiring subsidies, perform much better on cost-effectiveness and strengthen the outsiders' position in the labor market, especially during recoveries. In-work benefits and public works are not very cost-efficient in terms of raising employment, but might be cost-efficient in reducing poverty and inequity. Policies readjusting distorted employment incentives, such as activation and sanction measures, have proven to provide cost-effective results during normal times