THE ESTIMATION OF THE INCIDENCE OF EMPLOYER CONTRIBUTIONS TO SOCIAL SECURITY IN JAPAN*

The present paper estimates the incidence of the employer portion of social security contributions in Japan. One of the purposes of the paper is to examine whether the employer portion is shifted entirely or partly in many industrialized countries. The paper concludes, based on our estimation method, that there is very little apparent backwards shifting on to employees and, therefore, employers bear nearly all of their portion of social security contributions. Firms in Japan could use their contributions to social security for other purposes to reduce the financial burden on firms.     

Campaigning for retirement: State teacher union campaign contributions and pension generosity

Since Tullock (1972) first asked why there is so little money in U.S. politics, several studies have found evidence that political activism has the potential to yield significant returns. This study is the first to directly investigate the returns to public sector union activism by leveraging a transactions-level dataset from the National Institute on Money in Politics to estimate the relationship between teachers' union campaign contributions and the generosity of teacher pension systems. Our results show that more politically engaged teachers’ unions, as evidenced by their aggregate campaign contributions, are successful at both securing a higher level of retirement benefits and at shifting a greater burden of the financing of those benefits to the sponsoring government. Our estimates are in line with recent related studies and imply an investment return on campaign contributions of nearly 1500%.     

Social security and unsecured debt

In this paper, we use a calibrated life-cycle model to explore quantitatively ways of reducing the burden of social security in a world populated by both optimizing and rule-of-thumb consumers. Social security contributions force young households with upward-sloping income profiles to save a sizeable portion of their income for retirement, when their optimal consumption plan would likely have them either saving little or borrowing. We first use household data to document that young households have accumulated social security contributions that are large relative to debt holdings. Then, using a calibrated life-cycle model, we show that both allowing households to use social security wealth to pay off their debt and exempting young households from social security contributions (but in both cases requiring higher contributions later) mitigate many of the inefficiencies of social security from the perspective of life-cycle financial planning. Specifically, in our preferred experiment, which exempts households whose heads are under 30 from making social security contributions, we find that certainty-equivalent consumption increases by 3.4% for optimizing households and by 3.3% for rule-of-thumb households.     

ARE EFFICIENCY IMPROVEMENTS IN GOVERNMENT TRANSFER POLICIES SELF-DEFEATING IN POLITICAL EQUILIBRIUM?*

This paper studies an election game between two politicians, in which each provides income transfers to special-interest groups in return for political contributions. It is shown that a move to a more inefficient form of transfers may lower the total excess burden created by these transfers, because the politicians are induced to reduce their provision of transfers. For the case in which the income transfers are indirectly provided as trade protection to import-competing industries, a switch from production subsidies to tariffs as the form of protection reduces the equilibrium level of excess burden and makes both politicians better off.     

Social security contributions,economic activity,and distribution

Deductions from private income occupy a central role in the discussion of current economic problems. One hypothesis stated frequently claims that an increasing social security burden depresses economic activity. A reduction in contributions is evaluated within the macroeconometric F&T-Model. It leads to the desired systematic changes in economic activity and distribution. Demand and employment rise while the disburdening of profits exceeds that of wages and salaries thereby inducing additional private investment. These results hold even if the loss in contributions is compensated by a decrease in subsidies of the same amount. Although profits have to pay for the disburdening of wages and salaries in the course of the simulation the losses in profits are over-compensated by effects arising from increased economic activity.     

TECHNOLOGY TRANSFERS FOR CLIMATE CHANGE

This article considers the transfer of cost‐reducing technology in the context of contributions to climate protection. We analyze a two‐period public goods model where later contributions can be based on better information, but delaying the mitigation effort is costly because of irreversible damages. Investments in technology affect the countries' timing of contributing. We show that countries have an incentive to provide cost‐reducing technology as this can lead to an earlier contribution of other countries and can therefore reduce a country's burden of contributing to the public good. Our results provide a rationale for the support of technology sharing initiatives.     

老龄化、社保缴费与企业诞生*

本文分析了我国不同经济区域老龄化和老年抚养比的变化轨迹,发现经济发达地区老龄化出现下降趋势。测算不同省份企业的最大社保缴费能力和缴费负担,发现我国企业的社保缴费负担过重。采用负二项回归模型,实证分析社保缴费对不同省份、不同行业企业成立数量的影响,发现社保缴费能力对企业成立数量有正向影响,社保缴费负担则有负向影响,统计显著但影响力较小。在上述分析基础上,本文提出了合理划分国家、企业、个人三方社保负担的政策建议。     

Why Sweden's pension reform was able to be successfully implemented

Governments that do not reform pay-as-you-go (PAYG) pension systems will eventually face a pension crisis. In a democracy, reforms require majority support. The problem is that pension reform requires today's generation to bear the burden to avoid burdening tomorrow's generation. Sweden recently passed pension legislation that specifies a gradual transition from a public defined-benefit plan to a defined contribution plan. Why was Sweden successful in reforming its pension system? We find that a political economy perspective helps to answer this question: there are more winners who would vote in favour of the reform than non-winners who would vote against it. When comparing the net effect (present value of expected benefits minus present value of remaining contributions) of the new and old systems, contributions of the working generation (age < 53) are reduced by more than their expected benefits.     

A REAPPRAISAL OF THE INCIDENCE OF EMPLOYER CONTRIBUTIONS TO SOCIAL SECURITY IN JAPAN

This paper reappraises Tachibanaki and Yokoyama (2008)—an empirical analysis indicating no apparent backward shifting of employer social insurance contributions—by modifying their empirical strategy. First, we control for a spurious positive correlation between wages and employers' contribution rates by trend variables. Second, we utilize a cross‐sectional variation in the contribution rate of workers' compensation insurance. Third, we exclude two industries from our sample to remove sampling errors in wages. Our results indicate that the social insurance burden shifts back onto employees to some extent, contrary to Tachibanaki and Yokoyama (2008). Our finding is consistent with other existing studies.     

The shadow economy in three Mediterranean countries: France,Spain and Greece. A MIMIC approach

This paper offers estimations of the evolution of the shadow economy in three Mediterranean countries, namely France, Spain and Greece. A multiple indicators and multiple causes model based on the latent variable structural theory has been applied. As established by Giles (Working paper on monitoring the health of the tax system, 1995), filtered data to solve the non-stationary problems are used. The model includes the tax burden (both as a whole and disaggregated into direct taxes, indirect taxes and social security contributions), a proxy of regulation burden, theu nemployment rate and self-employment as causes of the shadow economy and the GDP growth rate, the labour force participation ratio and the currency ratio as indicators of the underground economy. The results confirm that unemployment, the fiscal burden and self-employment are the main causes of the shadow economy in these countries, and confirm that an inverse relationship exists between the official GDP growth rate and that of the unofficial economy. This paper has benefited from the comments and suggestions of the anonymous referees. The usual disclaimer applies. The paper was partly written when third author was visiting Real Colegio Complutense at Harvard University. The hospitality of this Institution is gratefully acknowledged.     

A dynamic game for fiscal federalism with non-local externalities

We address the questions of the patterns and the efficiency of public intervention in a dynamic game model between public agencies in charge of a non-local externality. We give two examples: pollution spreading between water basins (negative externality), and non-uniform contributions from the elite and from the mass to a cultural background (positive externality). We define two extreme cases, depending on whether or not the receiving end of the externality balances the transmitting end. When both balance, the reactivity of the agency structure is strong and the need for redistribution between them is weak. When they do not balance, the externality is more markedly non-local and redistribution is required to balance the fiscal burden (or product) from pigouvian instruments among all beneficiaries. We show that, with a static rule of redistribution that allows them to compute transfers between them as a function of their own strategies, the decentralized agencies' reactivity is somewhat slowed, but they still react faster and more efficiently than a static central agency.     

The Shadow Economy in German Regions: An Empirical Assessment

Despite the increasing number of contributions to the literature, regional variations of the shadow economy have been hardly studied. This article analyses the determinants and derives the size of the shadow economy on the district level in Germany. I find that an inferior local labour market and the burden of taxation significantly contribute to the existence of the shadow economy, while a better enforcement of tax rules and regulations has the potential to deter such activities. Districts in the affluent south of Germany experience on average smaller shadow economies.     

Universal Health Care and the Economics of Responsibility

In the American health care system the cost of health insurance is underwritten by all three sectors of the economy: 1) households; 2) employers; and 3) government. However, while costs are shared, responsibility is not. The retreat of private firms and government from assuming a substantial share of the burden of health care costs is based on the presumption that health care is an individual’s responsibility, while the contributions of government and the private sector are basically optional - a matter of benevolence rather than responsibility. The outcome of the current debates over health care reform will depend on this issue of responsibility. Who should pay for health care? Is it a collective responsibility or an individual one? In this paper, we explore the economics of responsibility as it applies to health care. In the institutionalist framework, any reallocation of costs must be driven by an underlying philosophy of shared responsibility.     

On the performance of rule-based contribution schemes under endowment heterogeneity

We experimentally test different rule-based contribution mechanisms in a repeated 4-player public goods game with endowment heterogeneity and compare them to a VCM, distinguishing between a random and an effort-based allocation of endowments. We find that endowment heterogeneities limit the efficiency gains from these rule-based contribution schemes under random allocation. Under effort-based allocations, substantial efficiency gains relative to a VCM occur. These are largely driven by significant reductions of contributions in VCM, while the rule-based mechanisms generate stable efficiency levels, even though falling short in realizing the maximal efficiency gains. Our results indicate that the procedure of endowment allocation impacts the perception of what constitutes a fair burden sharing.     

The Care Economy in Post-Reform China: Feminist Research on Unpaid and Paid Work and Well-Being

ABSTRACT

As China embarked on the path of economic and social reforms, social provisions from the Maoist era were dismantled, and care responsibilities shifted back from the state to the household. Rural–urban migration, a steep decline in fertility, and increasing longevity have led to changes in the age structure of the population both overall and by region. Using seven different surveys, the eleven contributions in this volume study the distributive consequences of post-reform care policies and the impact of unpaid care responsibilities on women’s and men’s opportunities and gender inequality. Overall, reduced care services have created care deficits for disadvantaged groups, including low-income rural elderly and children. The shifted care burden has also limited women’s ability to participate fully in the market economy and has contributed to rising gender inequalities in labor force participation, off-farm employment, earnings, pensions, and mental health outcomes.     

Reforming occupational pension schemes: the case of the Netherlands

In many countries, occupational plans are being reformed away from defined-benefit (DB) to defined-contribution (DC) designs. This paper explores the case of the Netherlands, which features a particularly high ratio of occupational pension assets to GDP. Dutch occupational DB plans suffer from a number of serious weaknesses, including ambiguous ownership of assets, back-loading of benefits, and lack of tailor-made risk management. To address these weaknesses, we propose collective individual DC plans that are actuarially fair. These schemes maintain important strengths of collective schemes, such as mandatory saving, collective procurement, and pooling of biometric risks. At the same time, they eliminate intergenerational conflicts about risk management and distribution through transparent individual property rights on financial assets and tailor-made risk profiles in individual accounts. We show how the transitional burden due to phasing out the back-loading of pension benefits can be addressed without a substantial increase in contributions.     

Social Security Contributions and the Business Cycle

We investigate business cycle dynamics of social security contributions (SSC), by far the largest labor tax distortion in the OECD. In most countries, we find a negative covariation of SSC tax burdens with levels and growth of GDP at business cycle frequencies and lower. In detrended data, a decline of GDP of 1% is associated with a 0.05-0.2 percentage point increase in the aggregate SSC burden, measured as a fraction of the wage bill. For most countries, average marginal SSC rates exceed, but track average rates. Changes in average SSC tax burdens are largely due to adjustments in statutory tax schedules rather than cyclical shifts in earnings distributions. Our findings are consistent with Esping-Andersen's (1990) typology of social welfare states. In some countries, SSC rates co-move with measures of the “labor wedge” (Chari et al. 2007, Brinca et al. 2016).     

企业税负、虚拟经济发展与工业企业金融化——来自A股上市公司的证据

税收负担是否成为倒逼实体经济企业向金融投资领域进军的重要动因？虚拟经济发展在企业税负与企业金融化之间的关联效应如何？本文使用2010—2016年A股工业企业财务数据进行实证研究，结果表明：（1）微观税负能显著提高工业企业金融资产配置水平；（2）相较于国有企业，非国有企业税收负担的金融化效应更为明显；（3）虚拟经济发展将放大税负水平对企业金融化的正向作用。     

Optimal tax treatment of private contributions for public goods with and without warm glow preferences

Tax-favored contributions for financing some public goods may be a useful part of optimal nonlinear income tax and expenditure policy. There are two sides to the potential gain from subsidized donations. First, for a given level of public good provision, higher private donations from high earners than low earners eases the incentive compatibility constraint for donors and so can raise social welfare. This follows since considering a lower-paid job includes a perception of a drop in public good provision. Second, private donation reduces consumption, easing the resource constraint. This paper explores optimal policy, using first a model with standard preferences and then a model with a warm glow of giving. In addition to showing the conditions for the level of public goods, the paper considers the pattern of optimal subsidization across earnings levels. Analysis of optimal taxation with warm glow preferences is sensitive to the choice of preferences that are relevant for a social welfare evaluation. After considering optimal rules with formulations of social welfare which do and do not include warm glow utility, the paper considers the choice of normative criterion. Like the earlier literature, this paper assumes that organizing private donations is costless while tax collection has a deadweight burden. Since private charitable fundraising is very far from costless, the paper is an exploration of economic mechanisms, not a direct guide to policy.     

School finance reform and voluntary fiscal federalism

California has transferred the financing of its public schools from localities to the state. In response, many families have supplemented the tax revenue of their local public schools with voluntary contributions. This paper analyzes that phenomenon. We propose a model of partial cooperation among parents in making voluntary contributions to their public schools. Under reasonable conditions, the model predicts that contributions per pupil should decline with school size. We estimate this relationship using data on contributions to California schools. Our estimates reveal that contributions per pupil do decline with size; however, the rate of decline is surprisingly slow.