The right to social security: Bismarck or Beveridge

The right to social security: Bismarck or Beveridge

The right to social security:
Bismarck or Beveridge
Pierre Pestieau
Crepp, Université de Liège, CORE,
PSE and CEPR.
1
INTRODUCTION
Comparative advantages of Bismarck versus Beveridge as to
•
•
•
•
The viability of social protection
Its resistance to social dumping
Its efficiency at poverty alleviation
Its support to full employment
2
Outline
•
•
•
•
•
•
History
Taxonomy
Political sustainability
Poverty alleviation
Social dumping
Activation of labor policy
3
Historical background
• Bismarck:1880-1890
Social insurance
Labor market
Paritarian approach
• Beveridge: 1942
Flat rate benefits
State managed
4
Taxonomy
Generosity/
Redistribution
Weak
Weak
High
High
France
Germany
Anglo-Saxon
Nordic
5
Benefit formula
pi  wi  1  w
 : generosity
 : redistributiveness
pi : benefits





0






0

1
1
: Bismarckian
 1 : mixed
: Beveridgean
: Means tested
6
Table 1 – Generosity and redistribution
Pension
Réduction
Indice de
(% PIB)
de pauvreté
redistribution
Type
11.2
70.1
1.4
BI
Autriche
3.8
57.0
8.9
BE
Belgique
11.5
78.5
1.1
BI
Canada
5.4
46.9
3.4
BE
Danemark
9.7
65.3
3.6
BE
Finlande
9.7
30.8
3.9
BE
France
12.1
78.0
1.0
BI
Italie
13.3
55.6
1.4
BI
Japon
5.9
25.4
3.6
BE
Norvège
7.5
58.2
2.2
Nouvelle-Zélande
5.6
70.2
3.2
BE
Pays-Bas
8.0
59.7
3.1
BE
Portugal
7.7
36.8
2.1
Suède
10.6
73.2
1.2
Suisse
12.6
69.4
1.9
Royaume-Uni
8.7
53.4
3.5
BE
Etats-Unis
6.3
36.4
3.7
BE
Allemagne
Source: OECD (2004, 2003), Förster (2003)
BI
7
Table 2 – Generosity and redistribution
Pension
Réduction
Indice de
(% PIB)
de pauvreté
redistribution
11.9
70.0
1.4
Autriche
5.6
50.0
9.7
Canada
5.2
52.1
3.7
Danemark
8.3
61.3
4.3
Finlande
8.6
23.2
6.1
France
12.1
78.7
1.1
Irlande
3.4
29.1
4.4
13.8
58.7
1.4
Japon
7.9
32.4
3.2
Norvège
6.8
63.4
2.3
Nouvelle-Zélande
4.9
67.1
4.2
Pays-Bas
7.2
60.6
2.9
Portugal
8.9
39.8
1.4
Suède
9.9
69.9
1.3
Suisse
13.3
72.9
1.6
Royaume-Uni
8.9
50.5
3.4
Etats-Unis
6.0
35.5
3.8
Allemagne
Italie
8
Sustainability
•
d
d
 0
• Programs for the poor are poor programs
9
Poverty alleviation
Rich programs are good for the poor
• Survival benefits
• Minimum benefits
• Rights for unemployment, training, maternity leave
10
Tableau 3 - Coefficient de corrélation 1995
Pension
Réduction
Indice de
(% PIB) de pauvreté redistribution
Pension (% PIB)
1.000
Réduction de pauvreté
0.461
1.000
Indice de redistribution
-0.686
-0.686
1.000
11
Table 3bis - Coefficient de corrélation 2000
Pension
Réduction
Indice de
(% PIB) de pauvreté redistribution
Pension (% PIB)
1.000
Réduction de pauvreté
0.458
1.000
Indice de redistribution
-0.740
-0.642
1.000
12
Social dumping
Poverty alleviation and openness
12
10
Poverty alleviation
8
6
4 y = -3,7363x + 31,741
2
R = 0,5017
2
0
5
5,5
6
6,5
7
7,5
8
8,5
9
-2
-4
Openness
13
Employment policy
Activation of employment policy
• Earnings related
• Generous benefits
• Temporary
• Contingent upon search
14
Current trends
Contrasted evolution
•
•
Sweden, Italy towards NDC schemes
France, Belgium towards narrower range of benefits
15