This 2016 special issue addresses the topic of excellence in social security administration. For the International Social Security Association, “excellence” is most usually associated with ensuring that the technical processes and administrative procedures that underpin the delivery of social security benefits and services are high-performing, well-governed and sustainable. But it also refers to the covered population’s perceptions of the quality and adequacy of the services and benefits provided. The academic literature on “social security” is immense, but the larger part of this published research addresses questions of social security theory and policy. The critical, analytical literature on social security administration, including that which marries theoretical analysis with the empirical evidence of administrative performance, is thus smaller. A major aim of this special issue is to make a contribution to redressing this imbalance. This is done not only to support and stimulate research that draws equally on empirical evidence and the theoretical literature, but in a very practical sense to better take into account and provide responses to the increasingly complex operational challenges facing social security administrations.

Canada, Denmark, the Netherlands and Sweden have advanced multi-pillar pension systems. Using micro-simulations, this article presents a close examination of the interaction of pillars in these countries. The relative importance and the role of the different pension pillars vary from country to country, and according to age, income, gender and socio-economic dimensions as well as between generations. A further area of investigation is the mitigation capacity of the four pension systems. On the one hand, adverse labour careers lead to lower life-time earnings and lower private pension accruals. On the other hand, these effects are mitigated through the design of pillars and their interaction. Mitigation is important to income security and stability in retirement and to post-retirement income distribution. However, mitigation mechanisms come at the cost of incentives. Moreover, in many countries, the generosity of public benefits is set to decrease – increasing the importance of private pensions. This will shift risk and uncertainty from employers and pension institutions to individuals. Thus, risks and uncertainties related to private pensions will become more important, raising questions about the division of responsibilities between public and private pensions, and about the potential of mitigating such risk through pillar interaction. These concerns are further reinforced by labour market changes. Although a pension system free of distortions is inconceivable, this article seeks to contribute to addressing how mitigation should be designed, and how mitigation and risk sharing should be balanced against incentives, challenges which are as much political as technical.

The United States is at a crossroads in its policies for families and women. Currently, the United States provides basic support for children, fathers, and mothers in the form of unpaid parental leave, child-related tax breaks, and limited public child care. In contrast, the other member states of the Organisation for Economic Co-operation and Development (OECD) empower families through paid parental leave and comprehensive investments in infants and children. The potential gains from strengthening these policies in the United States are enormous. Paid parental leave and subsidized child-care help to get and keep more women in the workforce, contribute to economic growth, offer cognitive and health benefits to children, and give parents options in defining their preferred work-life strategy. Indeed, the United States has been falling behind the rest of the OECD in many social and economic indicators by not adequately investing in children, fathers and mothers. Given the significant payoffs to these family supports, this article focuses on issues of reconciling work and care commitments for families with young children, and, in particular, on paid parental leave policies within the OECD and the United States.

The extension of social protection to all has become a central policy objective, both nationally and internationally. A considerable number of middle- and low-income countries have undertaken substantial efforts to extend social protection, while the international community reaffirmed its commitment to the extension of social protection through the adoption of the ILO Recommendation concerning National Floors of Social Protection, No. 202 (2012). This article reviews the legal provisions and the implementation of the Indian Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), legislated in 2005, and does so in the light of the more recent provisions of ILO Recommendation No. 202. Since its introduction ten years ago, MGNREGA has provided a source of income to rural workers, increased wage rates, achieved high female participation rates and created durable assets. India’s local governance bodies, Panchayati Raj Institutions (PRI), have been empowered and involved in the processes of planning and monitoring. However, despite successes, there have been considerable shortcomings in implementation. This article highlights two central themes: first, the innovative policy framework of the Act, which brings together rights-based entitlements, demand-driven employment, and citizen-centred monitoring. Second, it assesses the accessibility and adequacy of benefits in the implementation of MGNREGA. We conclude that MGNREGA offers potential for South-South learning, both in terms of policy-design and implementation.

Since 1981 close to forty countries have introduced systemic pension reforms that have replaced all or part of prior pay-as-you-go (PAYG) schemes with privately managed funded defined contribution (FDC) pillars or systems. However, over the past decade about half of these countries have subsequently cutback on, or entirely eliminated, these FDC schemes. In this article we explore some of the reasons why this reversal is often taking place in developing countries. As part of our analysis we propose a new pension reform typology that goes beyond the commonly used dichotomy between PAYG and pension privatization. We identify and discuss four factors that are of particular relevance to those seeking to understand the pension policy reversals that have been taking place in many developing countries: low pension coverage and incentive incompatibility, triple burden costs, tradeoffs between pension reforms and social pensions, and difficulties with annuitization.

Using a two-period overlapping generation (OLG) model, this article seeks to identify the optimal redistribution policy instrument in terms of aggregate welfare when agents differs according to their labour condition. We use five policy specifications: (i) early redistribution to the young informal generation; (ii) late redistribution to the informal old generation; (iii) a mix between early and late redistribution; (iv) redistribution from the current formal young generation to the current formal old one; and (v) a non-redistribution scenario. With inelastic labour supply, we show that transferring to the young performs better as a redistribution policy. This result is robust across different parameter values.

This article evaluates the implementation of the Child Grant, one of the major social protection interventions in Nepal, and identifies bottlenecks that limit its ultimate effectiveness. On the whole, while delivery works for many beneficiaries, we found inconsistencies between the way the policy is laid out on paper, and the way it is actually implemented. Targeting efficiency is high, despite the wealth targeting criterion not being applied in practice. Owing to informal awareness-raising campaigns, beneficiaries’ knowledge on registration, eligibility and entitlement is patchy. Payment levels vary and tend to be infrequent. These implementation bottlenecks limit the Grant’s effectiveness and temper some of its impact potential.

Chile pioneered in Latin America not only the introduction of social security pensions, but the structural reform that privatized them and a process of “re-reform” implementing key improvements. A Presidential Commission in Chile, appointed in 2014 to evaluate reform progress and remaining problems in the pension system, released its report in September 2015. In light of the Commission’s findings, the article assesses Chile’s compliance with International Labour Organization social security guiding principles: social dialogue, universal coverage, equal treatment, social solidarity, gender equity, adequacy of benefits, efficiency and affordable administrative cost, social participation in management, state role and supervision, and financial sustainability. The exercise follows three stages: the structural reform (1981–2008), the re-reform (2008–2015), and the Presidential Commission proposals (2015)

With social security provisions in Kenya remaining under-reported in the more recent literature, this overview covers recent reforms in key areas of the country’s social security system. In the health sector and in old-age pension provision social security is still mainly workerist (biased toward those in formal employment), and attempts to expand coverage have had limited effect only – cash transfer programmes, for instance, have been expanded but in practice they do not universally cover the entitled categories. Thus, although the Kenyan social security system now has a considerable pro-poor social assistance component it remains biased toward those in formal employment, to the benefit of the highest income quintile.

In the context of the reform of defined benefit pension systems under population ageing, we focus on the introduction of automatic adjustment mechanisms linked to life expectancy. Our goal is to establish a relationship between changes in the key parameters of the pension system and changes in life expectancy, applying the principle of intergenerational actuarial neutrality. For a defined benefit pension scheme, we first obtain the fundamental adjustment equation and then, for particular cases, we derive different designs of automatic adjustment mechanisms depending on the involved parameter. We include a numerical application only for illustrative purposes.

This article analyses the health care system reform process in Europe based on the concept of privatization. This notion is understood from two perspectives. First, privatization may concern the health care financing or the provision of health services. Second, privatization can be “imposed” on individuals or be “internalized” and then introduced by individuals (patients and doctors). So we emphasize the diversity that privatization can assume. We classify privatization mechanisms used by different countries and identify which of the perspectives presented are more common in 14 European Union countries since the 1980s. The article shows that even if privatization processes are widespread, they assume different patterns in each country.

Mongolia achieved high population coverage under mandatory health insurance relatively quickly. This fact was viewed by policy- and decision-makers as a central issue for health financing reform in Mongolia. Health insurance brought many new features for health service planning, provision, funding and resource management. Based on initial achievements, health insurance came to be strategically considered as the vehicle for achieving universal coverage. The article analyses developments in Mongolia's health insurance over the last decade along with the core policy dimensions of Universal Health Coverage. It examines various reform approaches and the numerous amendments to laws that have been implemented during this period and discusses new opportunities as well as challenges. The analytical review and findings discussed suggest that Mongolia has a need for evidence-based policy decisions and informed political support, with health insurance backed by robust institutional and administrative capacities. More generally, it also emphasizes that health policy goals and objectives can be attained by strengthening and making transparent and publicly-accountable all health system financing functions and arrangements. The policy analysis, experiences, lessons and proposed strategies presented with regard to Mongolia intend to stimulate wider discussions on health insurance development as well as promote continuing focused research on specific aspects of health insurance and public financing reform.

Owing to a favourable economic situation and to national labour market and social protection policy reforms, Latin America has witnessed significant progress in social protection coverage extension. Some countries, however, have seen weaker progress, with stagnant coverage levels. Several factors underlie the extension of pensions and health care coverage and the increased formalization of the labour market: substantial improvements in the quality of employment, more flexible eligibility criteria for contributory coverage, and the strengthening of the supervisory and regulatory roles of the State. This article first addresses the link between social protection and informality in Latin America to show the relationship between informal labour markets, the lack of social protection and the scale of unpaid contributions. Also highlighted is regional progress in extending social protection as a result of labour market formalization. Countries in the region have used various policies to encourage formalization and these have also helped to reduce wage inequalities, since formalization has had especially beneficial effects on low-income sectors. Finally, we discuss controversial and diverging views on social protection financing in the region. These views tend to favour non-contributory over contributory financing mechanisms and support proposals for limited coverage, but do not address the stratification of access to social protection. The move towards the alignment of benefits is deemed essential: strategies to universalize social protection in the region should not focus exclusively on increasing resources, but must address their form given that institutional change is a crucial part of the locus of innovation

In writing the overture to an issue on contribution financed social security one cannot but speak of Bismarck; it must also address Beveridge who saw contributions, although in their design and role clearly differently from Bismarck, as one core revenue tool to finance his vision. Beveridge attributed to the private financial sector a prominent role in securing people against the negative effects on income of shocks and crises, while Bismarck did not. Beveridge's concept, when first published, had, and still has today, the most attractive charm of rigorously satisfying peoples' striving for equitable and inclusive societal solutions. Bismarck's concept intrinsically offers income security only to those who contribute, while the level of protection depends on the level of contributions paid (with the exception of health insurance). In reality, both concepts, where implemented, had to face the realities of socio-economic and political developments: Beveridge's vision was achieved in respect of access to health services where his proposal, in its predominantly tax-financed version, has since turned into a worldwide blueprint for health schemes; in its other components, it was not resilient enough to achieve the intended standards and now is replete with means-tested (poor relief) elements. Bismarck's scheme has proven its potential to achieve "universality", not necessarily by theoretical design but as a matter of fact, i.e. covering people from cradle to grave (like Beveridgean schemes). With globalization, schemes of both origins have had to face massive neoliberal attacks over the last three decades. Which of the approaches is best able to survive must be left an open question: in the current worldwide context of rapid change, both have weak and strong points, and whether a symbiosis of the two offers the answer to future challenges remains to be seen.

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.

In this article the adequacy of social insurance benefits is addressed from the perspective of eight fundamental goals of social insurance. With respect to these goals, the legislated level of the benefit and other conditions represent tools to achieve adequate levels of benefits vis-à-vis contributory effort. The goals address income risks of various sorts: (i) income compensation; (ii) securing a decent standard of living; (iii) universality, implying simplicity and a high takeup of social rights; (iv) reducing income risk deriving from physical incapacity; (v) safeguarding insurability by balancing the expected payoff to the insured and the value of the contributions paid over the lifetime; (vi) intergenerational equity; (vii) containing work and savings disincentives; and (viii) risk reduction (prevention). A simple model serves to clarify what is needed to achieve benefit adequacy together with insurability and contribution adequacy. An example of income support in working age, based on Israeli data, illustrates the use of specific instruments to achieve a decent standard of living while containing economic disincentives. The example stresses the importance of synchronizing efforts with institutions outside the social insurance system.

The 2014 Research Conference of the International Social Security Association (ISSA), which offered a platform for discussion and analysis among social security administrators and academia, addressed issues concerning the adequacy and sustainability of social security. Core issues discussed were the definition and measurement of adequacy and the contribution of social security systems to social and economic development. Also addressed were "megatrends", including demographic ageing and climate change, and their impacts on social security systems. As an objective, the conference sought to evaluate the implications of these issues for social security administrations and, on the basis of national good practice and new research findings, to identify measures permitting future adaptation and innovation.

The BRICS countries have made important progress in extending social security coverage. However, much remains to be achieved to realize the goal of comprehensive universal social security protection. Using policy experiences from the BRICS, the article explores the possibility of drawing from existing models of social security provision to design effective policy interventions for universalizing social security. Main principles of a framework for bridging the coverage gap are identified. These principles are then placed in complimentary and supplementary relationships to develop a framework for policy interventions to bridge the social security coverage gap and achieve universal social security.

The rapid rise in unemployment since 2008 caused by the global financial crisis has created renewed interest in the effects of well-designed unemployment benefit systems on the speed at which labour markets recover and job creation resumes. On the basis of a newly-created database on labour market flows, this article makes use of a micro-founded macroeconomic model to estimate different effects of active and passive labour market spending on employment growth and the state of public finances. It demonstrates, in particular, that for the average G20 country, spending on unemployment benefits yields employment gains both in the short term and long term that are superior to those observed for active labour market policies. Moreover, rather than tightening their budgets prematurely, G20 countries would have fared much better in accepting further deterioration in public finances stemming from higher spending on social transfers in order to stimulate faster employment growth, which would have led to a more rapid recovery in the state of public finances as well.