First published in 1948, the International Social Security Review is the principal international quarterly publication in the field of social security.
This article contributes to the debate concerning pension financialization and how countries are adapting their pension systems to respond to demographic ageing. We do so by examining the statutory pension systems of Canada and Finland, which diverge interestingly from current international trends. The Canadian and Finnish public pension schemes reflect two tendencies often associated with pension financialization: an increasing reliance on financial markets and an investment policy with a diversified asset allocation. However, unlike in many other countries, this has not resulted in heightened individual risks in old-age income security caused by a shift from defined benefit to defined contribution pensions – an otherwise common trend internationally.
First published in April 1948 as the Bulletin of the International Social Security Association, this year marks the 75th anniversary of what, since January 1967, we have all come to know as the International Social Security Review. To mark this important anniversary, this special double issue, “The human right to long-term care for the elderly: Extending the role of social security programmes”, talks to current debates on social security coverage extension in a context of population ageing. There is a case to be made for revising the international social security standards to formally recognize long-term care for the elderly, possibly as a distinct branch of social security. At the heart of this discussion, the questions to be addressed by all countries are the roles that social security systems can and should play in helping to meet the long-term medical and social care needs of elders.
Since the 1980s, many Latin American countries have tightened access to contributory pensions, with financial sustainability being a main concern. Studies suggest that a sizable share of contributors would not be able to comply with stricter access conditions, since observed contribution densities were low. While most Latin American countries lack complete work history records, the observed density of contributions offered strong evidence of short contribution histories, in particular for low-income workers and women. In the last decade these facts drove a new wave of reforms, in the form of less demanding eligibility requirements to access pensions and the need for a gender perspective. Uruguay took part in both processes, increasing vesting period conditions in 1996, then lowering them and granting childcare credits in 2008. In this article, we analyse the effects that less strict eligibility requirements would have on pension entitlements in Uruguay, estimating complete contribution histories using administrative records. Work history records have been kept since April 1996 only, meaning there are still no complete work histories. The study finds that pension rights would increase, in particular for women. The main effect would be driven by the lower contribution requirement. In addition, childcare credits would further reduce the gender gap in terms of access to benefits. The case of Uruguay is relevant in the regional context, as most Latin American countries are ageing rapidly and can learn from the Uruguayan experience, a country with vital statistics closer to those of developed countries. Also, recent reforms in the region show shared concerns on pension rights and the gender gap.
This article addresses the link between pensions and occupational earnings using the example of social security contributions in selected OECD countries. The rules of the pension schemes studied point towards a very strong link between occupational earnings and pension level. However, certain pension calculation methods, through pension calculation parameters or through the existence of tools to compensate for certain career discontinuities, may distort this link in the majority of the countries studied. Therefore, the examination of pension calculation parameters and of solidarity measures attached to retirement is necessary to provide a more finely-tuned evaluation of the link between occupational earnings and pension level. Ultimately, comparison of pension systems across countries remains challenging given their specificities.
Social security contributions make up around a fourth of total tax revenue in OECD countries. However, there are concerns on the economic effects of high levies on labour. Recent studies suggest that at least a third of taxes on labour are shifted onto employers, leading to higher wage costs. We find substantial evidence in the literature that the nature of social security contributions matters. With a clear connection between contributions and rights, the employee will perceive this contribution as a price and not as a tax. As a consequence, these contributions will be less distortive in terms of labour supply, wage costs and private savings.
The choice of the methodology used to produce a social security pension system's balance sheet is mainly determined by the system's financing approach. In this article, it is shown using the example of the Canada Pension Plan that if the assessment of the financial sustainability of a pay‐as‐you‐go or partially funded system is done through the means of an actuarial balance sheet, then the methodology used should take into account future contributions of current and future participants. The balance sheets produced using the open group approach, as well as methodologies used in United States and Sweden, are discussed.
This article assesses the effectiveness of pension provision and health insurance in preventing ill health among older people in developing countries. It argues that, until recently, social protection agendas devoted insufficient attention to health risk prevention, instead focusing on the reduction of income poverty through cash transfers. The article shows that there is little reliable evidence to indicate that providing older people with pension benefits enhances their health status and that these effects should not be taken for granted by policy‐makers. The article then focuses on the effect of inclusion in health insurance schemes on health outcomes for older people, with specific reference to outcomes related to hypertension. Drawing on newly‐available data from the World Health Organization for Ghana, Mexico and South Africa, it shows that older people with health insurance are marginally more likely to be aware of health conditions such as hypertension and more likely to have them under control. Nevertheless, the great majority of hypertensive older people, insured or uninsured, are not effectively treated. The chief barriers to treatment are shown to be mainly related to awareness and service provision, rather than financial ones. Consequently, the capacity of pensions or health insurance to enhance health outcomes for older people in such countries, including in rural areas, is heavily contingent upon health education, health screening and adequate health service provision. These interventions should be viewed as an integral element of mainstream social protection strategies, rather than adjuncts to them. Yet, in practice, social protection and health promotion continue to be treated as almost entirely separate spheres, thus presenting substantial institutional barriers to developing combined interventions.
This article examines the timing of the introduction of four major social security programmes — work accident insurance, sickness benefits, pensions, and family allowances — in 43 African countries. Further, it explores whether legislative structure, dominant religion or the colonial past of the country is of importance when we control for year of independence, prosperity, degree of democracy, government stability, industrialization and the size and ethnic homogeneity of the population. On the basis of Cox hazard rate modelling it is concluded that industrialized, homogeneous and rather populous countries that were under French rule tend to be pioneers in African social security legislation.
In 2009, Argentina introduced a new transfer programme for children and adolescents younger than age 18 (Universal Child Allowance) that extended coverage under the contributory programme for family allowances to include families in the informal economy and families of unemployed persons. This article describes this innovative programme, compares it with similar programmes in Latin America and analyses its impact on coverage and its possible effects on the welfare of the population. The results indicate that the extension of access to this type of benefit has reduced considerably the coverage gap for the poor and indigent and supports efforts to consolidate the operations of different and poorly coordinated transfer programmes.
In the 1990s, following the earlier example of Chile, pension system reforms were implemented in a number of Latin American and other countries. These reforms focused on introducing models of pension provision that were fully‐funded and privately managed. Although aspects of these reforms have been positive, for many persons covered by these systems retirement income is not adequate. The development of occupational pension plans may offer an alternative, complementary mechanism to help improve pension adequacy. This article discusses different complementary pension plan models and examines the case of the Dominican Republic. It argues that complementary occupational pension plans may be a viable policy option for this developing country.
Population ageing has been occurring in many countries within Europe, North America and elsewhere for a number of decades. However, recently the pace, size and global reach of such ageing has begun to be recognised, and the wider implications assessed. Population ageing poses a key policy challenge for social security and health care systems across the globe. Different governments will come to these considerations carrying with them contrasting demographic profiles, welfare regimes and institutional structures, and cultural systems. The future success of societies in their efforts to accommodate such demographic change will, to a large extent, rest with the capacity of social security and health care institutions to adapt to an ageing world.
Upward intergenerational flows — from the working ages to old age — are increasing substantially in the advanced industrialized countries and are much larger than in developing countries. Population ageing is the most important factor leading to this change. Thus, in the absence of a major demographic shift (e.g. a return to high fertility), an increase in upward flows is inevitable. Even so, three other important factors will influence the magnitudes of upward flows. First, labour income varies at older ages due to differences in average age at retirement, productivity, unemployment, and hours worked. Second, the age patterns of consumption at older ages vary primarily due to differences in spending on health. Third, spending on human capital (i.e. spending on child health and education) varies. Human capital spending competes with spending on the elderly, but it also increases the productivity of subsequent generations of workers and the resources available to support consumption in old age. All contemporary societies rely on a variety of institutions and economic mechanisms to shift economic resources from the working ages to the dependent ages — the young and the old. Three institutions dominate intergenerational flows: governments which implement social security, education, and other public transfer programmes; markets which are key to the accumulation of assets (e.g. funded pensions and housing); and families which provide economic support to children in all societies and to the elderly in many. The objectives of this article are, first, to describe how population ageing and other changes influence the direction and magnitude of intergenerational flows; and, second, to contrast the institutional approaches to intergenerational flows as they are practiced around the world. The article relies extensively on National Transfer Accounts (NTA), a system for measuring economic flows across age in a manner consistent with the United Nations' System of National Accounts. These accounts are currently being constructed by research teams located in 33 countries on six continents representing wide variations in the level of development, demographics, and policies regarding intergenerational transfers.
To counter the negative social consequences of the present crisis, States must take measures to provide income support and new employment opportunities to affected workers and their families. This article reviews crisis responses in a number of countries with respect to support from unemployment programmes, the branch of social security most directly affected by economic downturn. It also discusses the trade offs that all social security schemes face during economic crises, when revenues from contributions or taxes earmarked to finance programmes fall and expenditures on benefits rise. In turn, concerns about pension policies receive special attention. The article concludes by discussing the initiative, launched by the United Nations, for a global “social protection floor”: to extend, at the very least, basic social protection to the large majority of the world's population who are currently without and who remain vulnerable to all economic and social risks.
This article reports the findings of 13 studies undertaken as part of the International Social Security Association (ISSA) project on “Examining the existing knowledge on coverage extension”. It reviews recent evidence that highlights how cash benefits and health‐care coverage, financed on the basis of contributions or tax revenue or both, can be extended and maintained in low‐, middle‐ and high‐income countries. The article also highlights a number of priority areas and issues for coverage extension, including realizing improved protection for informal‐economy and migrant workers.