A Study of Public Pension in OECD Countries -Comparision Between Dualism and integration
Date Issued
2009
Date
2009
Author(s)
Chang, Shu-Ting
Abstract
As the number and share of the population aged 65 and over will continue to grow steadily in OECD countries over the next decades, reforming pensions is becoming one of the biggest challenges governments have to face. With information for OECD countries, 11 OECD countries can be categorized as having separate public pension arrangements for civil servants, 19 OECD countries are categorized as integrated schemes. Hence, the main purposes of this study are to: (1) compare public pension between separated and integrated schemes and (2) compare public pension between public and private sector in the separated scheme countries. Public pension might be affected by different category of factors, so this study use of 30 OECD countries during the 1980-2003 period data, and the variables in the public pension model include public pension scheme, politics, demography, macroeconomics and finance factors. The empirical result reveals that there is no difference between separated and integrated scheme in public pension expenditures. But comparing with integrated schemes, civil servants in the separated scheme countries whose pension are more generous. And comparing public pension between public and private sector in the separated scheme countries, civil servants’ pension expenditures were mainly influenced by party ideology and fiscal burden. However, we found that civil servant pension was significantly correlated to CPI. On the other hand, we do not find the evidence to support private sector pension also was affected by CPI. Pension systems are complex and diverse, so comparing them is consequently difficult. And pensions have multiple purposes, like social equity and economic sufficiency. These purposes may be given different weights, but policy needs to bear them all in mind. Before reforming, we should judge from the perspectives of equality, efficiency, and feasibility. A move from dualism towards integration may or may not be welfare-improving, depending on a series of country specifics. The analysis of any such move needs to take account of the costs of moving from one steady state to another, rather than simply comparing two steady states And it also needs to take account of differences in risk and of the significant differences in administrative costs of different types of pension arrangement And it also needs to rebalance retirement income provision to ensure it is both adequate and financially sustainable. Moreover, it is suggested that the public pension reform should be implemented incrementally.
Subjects
public pension
Dualism
integration
random effect model
SDGs
Type
thesis
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