China pension report

The Chinese CISS has published the China Pension Report 2012. China has a strategy of development of the market economy and the goal of a “more reliable social security”, based on “wide coverage, basic security, multi-level, sustainability”. The report is very interesting to know first-hand the thinking and facts around Chinese pensions. A short list of results can be found in this interview with Zheng Bingwen, main author of the report.

Vouchers in Belgium for informality

The issue of bringing informal workers into social security is a challenge even in the wealthier and more urbanized countries. Belgium adopted a program based on vouchers that has enjoyed success. The program provides a framework for small employers and households employing domestic or other service workers to buy vouchers through authorized distributors. Those vouchers provide access to social security benefits. This seems to be a good example on how providing a simple framework can induce significant increases in participation at a low administrative cost. The Belgian labor force is roughly 5 million people, and the voucher system had 760 thousand active users in 2010, so the share of work covered is not small. The system is still growing, and by 2010 there were 2,664 companies supporting the distribution of the vouchers. It is interesting that when the word voucher is used in the context of social programs, it is often to define a mechanism to distribute a public subsidy, while in this case, the voucher is really issued by households and small employers to allow workers to access the benefits of social security.

Norway: labor and the welfare state

Speaking at the research meeting of the ISSA, the Secretary of Labor of Norway makes some points:

1. Norway is currently one of the leading countries in terms of "trust" among the population.
2. Oil wealth is not enough to finance the welfare system. Actually, the total work effort is the main determinant of the sustainability of the welfare state. Labor supply will decrease 7% towards the middle of the century due to aging, but the Government of Norway thinks that policies to raise labor supply are being successful. They think that the more realistic path is that for decades the labor participation rate can increase, because the average hours per worker will not increase.
3. To reduce benefits is not considered necessary to raise participation rates. Rather, if the welfare system is reliable, the population will be more businesslike, more trusting. On the other hand, a policy to graduate benefits may be needed. The system (as it is in most of the world) is "all or nothing": If someone receives a disability pension or sick pay, he receives 100% or nothing. There has been a massive increase in child care services, and to improve the quality is seen as critical to raise labor supply.

 

 

In this graph we see some interesting things: Norway has taken advantage of the boom in the price of oil to reduce public debt significantly (this is the inverted-U seen from 2000 to 2012). They are achieving in effect a raise labor participation (which is something that is not happening in general in the European Community). Norway is not in the community and does not use the Euro, and they have maintained a more stable exchange rate (they have had the revaluation from 2000 to today, but the exchange rate is approximately the same as in the 1990s).

ILO on socially responsible investment

Julien Goy and Helmut Schwarzer, from the ILO, have published this paper on “Socially responsible investment, decent work and pension funds: Concepts and international experiences”.

Social security funds have become significant players in financial markets, and sometimes can hold shares and bonds of private and public corporations that make them eligible to have a voice, seats in the board and sometimes even a controlling interest. To make those investments compatible with the goals of the decent work agenda and the social security views has consequently become part of the goals of fund managers and regulators.

Caribbean summit in Port-aux-Prince

The Caribbean Summit has been meeting this week in Haiti, and for today many heads of state will be present. It is very good news to confirm the return to institutional normalcy after the large natural disasters. The presidents of the Dominican Republic, Nicaragua, Honduras, Guatemala, Mexico, Colombia, Costa Rica y Chile have been among the attendees.

Peace in Syria

The 2013 winners of the Pultizer have been announced. Social security is an instrument of peace, and this winner picture talks about why anyone can be against war:

World Health Day 2013: High blood pressure

The WHO celebrated yesterday the world health day 2013. The theme for this year is high blood pressure. More information here.