Analyzing the Distributional Impact of Reforms, Vol.2 by Aline Coudouel, Stefano Paternostro

By Aline Coudouel, Stefano Paternostro

The research of the distributional influence of coverage reforms at the health or welfare of alternative stakeholder teams, relatively on th e negative and weak, has a massive function within the elaboration and implementation of poverty aid suggestions in constructing international locations. lately this kind of paintings has been categorised as Poverty and Social effect research (PSIA) and is more and more applied to advertise evidence-based coverage offerings and foster debate on coverage reform concepts. whereas info is offered at the normal strategy, recommendations, and instruments for distributional research, every one region screens a chain of particular features. those have implications for the research of distributional affects, together with the categories of affects and transmission channels that warrant specific realization, the instruments and methods best, the information resource more often than not applied, and the diversity of political economic climate components probably to impact the reform method. This quantity offers an summary of the categorical concerns coming up within the research of the distributional affects of coverage and institutional reforms in chosen sectors. every one bankruptcy bargains suggestions at the collection of instruments and methods such a lot tailored to the reforms less than scrutiny, and provides examples of functions of those ways. this can be a spouse to the 1st quantity, which deals suggestions on exchange, financial and alternate fee coverage, software provision, agricultural markets, land coverage, and schooling. additionally encompasses a CD-ROM containing chapters from significant other quantity 1, the PSIA User's consultant, sturdy perform observe, E-learning path, and hyperlinks to assets.

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Minimum pension. The level of the minimum pension is set too high in most countries, sometimes as high as or higher than the minimum wage. Given that workers at minimum wage make contributions from their wages, have families to support, and pay income taxes, while pensioners do not make contributions, have fewer family members to sup- Pension System Reforms port, and usually pay no or fewer income taxes, it does not make sense to give pensioners more than the net wage they earned while they were working.

Neither one of the two pension-system objectives—neither poverty reduction nor consumption smoothing—is necessarily to be preferred over the other; they simply represent separate societal priorities; countries place different emphases on these two objectives. Some countries, such as Australia, New Zealand, and, to a lesser extent, the United States, focus on poverty reduction more than consumption smoothing. New Zealand offers all individuals of a certain age a flat pension that is unrelated to previous income, while Australia offers a means-tested pension that provides some level of benefit to more than 75 percent of the elderly.

Other systems, such as those in Malaysia and Singapore, provide a guaranteed minimum rate of return, which can be redistributive depending on the level. If the minimum rate of return is high, it obviously redistributes from the guarantor, usually the government, to pensioners, but without regard to the income level of the pensioner. On the other hand, there are a few cases where the rate of return is virtually fixed ex ante, and, if the fund can earn better rates of return, then individuals lose by belonging to the fund, but, again, the loss is not dependent on income level.

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