Welfare state and social Europe

Fabian Kindermann, 22 October 2021

As life expectancy increases, so does the importance of a fair pension system that reflects our contribution but won't leave anyone in poverty. Can we create a progressive pension system that doesn't discourage work? Fabian Kindermann tells Tim Phillips how it could be designed.

Read more about the research presented and download the free Discussion Paper

Kindermann, F and Pueschel, V. 2021. 'Progressive Pensions as an Incentive for Labor Force Participation'. CEPR.

Ulugbek Aminjonov, Olivier Bargain, Tanguy Bernard, 09 October 2021

In many countries, poorer people have been more exposed to Covid-19 as they cannot afford to stay at home instead of going to work. This column shows that in low- and middle-income countries, emergency income support schemes have significantly reduced differences in rates of contagion due to wealth or poverty status by allowing poorer people to also stay at home. As well as preserving livelihoods and alleviating poverty, income support has also been successful in curbing the spread of Covid-19.

Colin Gray, Adam Leive, Elena Prager, Kelsey Pukelis, Mary Zaki, 04 October 2021

Proponents of work requirements for social safety net programmes argue that they promote self-sufficiency by encouraging work, while opponents contend that they reduce benefits for the most vulnerable recipients in times of need. This column looks at the impact of the reinstatement of work requirements for the Supplemental Nutrition Assistance Program in the US following a hiatus during the Great Recession. The authors find that work requirements do not appear to improve economic self-sufficiency, while substantially reducing benefits paid to programme recipients.

Armand Fouejieu, Alvar Kangur, Samuel Romero Martinez, Mauricio Soto, 02 October 2021

The past three decades have witnessed reform efforts to contain pension expenditures, the cost of which is born mostly by younger generations. This column assesses the sustainability, fairness, and intergenerational equity of pension systems in Europe by comparing the pension contributions and benefits over the lifetime of different cohorts. Reforms legislated in the decade from the onset of the Global Crisis reduced the lifetime benefit-contribution ratio by nearly 25% for younger generations. However, subsequent policy reversals have partly eroded these gains, suggesting additional reforms are needed.

Michele Andreolli, Paolo Surico, 29 April 2021

What is the consumption response to unexpected transitory income gains of different size and what are the aggregate demand implications of stimulus packages that target different segments of the population? This column explores these questions using responses to hypothetical questions in the Italian Survey of Household Income and Wealth. Families with low cash-at-hand display a higher marginal propensity to consume out of small gains, while affluent households exhibit a higher marginal propensity to consume out of large gains. For a given level of public spending, a fiscal transfer of a smaller size paid to a larger group of low-income households stimulates aggregate consumption more than a larger transfer paid to a smaller group.

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