Christine de la Maisonneuve

The Drivers of Public Expenditure on Health and Long-Term Care: An Integrated Approach

This paper proposes a framework for projecting public health and long-term care expenditures. It considers demographic and other (non-demographic) drivers of expenditures. The paper extends demographic drivers by incorporating death-related costs and the health status of the population. Concerning health care, the projections incorporate income and the effects of technology cum relative prices. For long-term care, the effects of increased labour participation, reduction of informal care and Baumols cost disease are taken into account. Using this integrated approach, public health and long-term care expenditures are projected for all OECD countries. Alternative scenarios are simulated, together with sensitivity analysis. Depending on the scenarios, total public OECD health and long-term care spending is projected to increase in the range of 3.5 to 6 percentage points of GDP for the period 2005-2050.

The Policy Determinants of Investment in Tertiary Education

RÉSUMÉ .................................................................................................................................. 2 THE POLICY DETERMINANTS OF INVESTMENT IN TERTIARY EDUCATION............................... 5

Sectoral Shifts in Europe and the United States: How they Affect Aggregate Labour Shares and the Properties of Wage Equations

This paper sheds light on the importance of aggregation bias in the analysis of wage shares developments over time and across countries. We focus on five European countries and the United States and show that the trend decline in the aggregate wage share observed in these countries over much of the 1980s and 1990s partly reflects changes in the sectoral composition of the economy. The application of a fixed-weight aggregation method changes the profile of the observed wage share in a significant way: in particular there is no longer sign of an overshooting of the wage share levels of the early-1970s. Error-correction wage equations based on the adjusted wage shares generally have a better regression fit and show long-run elasticities of real wages to unemployment that vary less across countries and are substantially lower than those obtained with observed shares. These results are broadly confirmed by wage regressions using sectoral data and the Pooled Mean Group estimator ... Changements sectoriels en Europe et aux Etats-Unis : Impact sur les parts salariales globales et les proprietes des equations de salaire Cette etude examine l’importance du biais d’agregation dans l’analyse de l’evolution des parts salariales au cours du temps et entre pays. L’etude couvre cinq pays europeens ainsi que les Etats-Unis et montre que la baisse tendancielle de la part salariale agregee observee dans ces pays durant la majeure partie des annees 80 et 90 reflete en partie des changements dans la composition sectorielle de l’economie. L’application d’une methode d’agregation basee sur des poids fixes change de maniere significative le profil des parts salariales observees: plus particulierement, les parts salariales ainsi ajustees ne descendent plus en deca du niveau du debut des annees 1970. Les equations de salaires a correction d’erreurs basees sur les parts salariales ajustees ont en general de meilleures proprietes statistiques et generent des elasticites de long-terme des salaires par rapport au niveau de chomage qui varient moins a travers les pays et qui sont significativement inferieures a celles obtenues a partir des parts observees. Ces resultats sont dans l’ensemble confirmes par les estimations d’equations de salaire basees sur des donnees sectorielles et l’estimateur de « pooled mean group ».

Falling Wage Shares in Europe and the United States: How Important is Aggregation Bias?

This paper sheds light on the importance of aggregation bias in the analysis of wage shares developments over time and across countries. We focus on five European countries and the United States and show that the trend decline in the aggregate wage share observed in these countries over much of the 1980s and 1990s partly reflects changes in the sectoral composition of the economy. The application of a fixed-weight aggregation method changes the profile of the observed wage share in a significant way: in particular there is no longer sign of an overshooting of the wage share levels of the early-1970s. Error-correction wage equations based on the adjusted wage shares generally have a better regression fit and show long-run elasticities of real wages to unemployment that vary less across countries and are substantially lower than those obtained with observed shares.

A Projection Method for Public Health and Long-Term Care Expenditures

This paper proposes a new set of public health and long-term care expenditure projections until 2060, seven years after a first set of projections was published by the OECD. It disentangles health from long-term care expenditure, as well as the demographic from the non-demographic drivers, and refines the previous methodology, in particular by extending the country coverage. Regarding health care, non-demographic drivers are identified, with an attempt to better understand the residual expenditure growth by determining which share can be explained by the evolution of health prices and technology effects. Concerning LTC, an estimation of the determinants of the number of dependants (people needing help in their daily life activities) is provided. A cost-containment and a cost-pressure scenario are provided, together with sensitivity analysis. On average across OECD countries, total health and long-term care expenditure is projected to increase by 3.3 and 7.7 percentage points of GDP between 2010 and 2060 in the cost-containment and the cost-pressure scenarios respectively. For the BRIICS over the same period, it is projected to increase by 2.8 and 7.3 percentage points of GDP in the cost-containment and the cost-pressure scenarios respectively.

THE WIDTH OF THE INTRA-EUROPEAN ECONOMIC BORDERS

This paper first provides a brief overview of the literature on market segmentation and then presents an empirical exercise that sheds more light on the significance of border effects across European countries. The literature suggests that integration in the EU goods and financial markets is typically more advanced than among the other OECD countries. On the other hand, integration in Europe remains significantly lower than that observed between regions within countries. The empirical exercise is based on a set of comparable price data of tradeable goods collected just before the launch of the single currency. The paper finds that for a given distance, crossing national borders adds significantly to the price differential across European cities. However, this border effect is substantially smaller than the one found in previous estimates focusing on European and North American cities, which were based on the comparison of much broader price indices such as the consumer price index ... Cette etude passe brievement en revue la litterature traitant de la segmentation des marches puis presente un exercice empirique qui examine la question de l’importance des effets frontiere a travers les pays europeens. Dans l’ensemble, les conclusions des diverses etudes portant sur la question semblent indiquer que l’integration des marches de biens et des marches financiers europeens est plus avancee qu’elle ne l’est generalement parmi les autres pays de l’OCDE. Par contre, l’integration des marches en Europe demeure sensiblement plus faible que celle observee entre les regions d’un meme pays. L’exercice empirique presente dans cette etude s’appuie sur un ensemble de donnees comparables de prix de biens echangeables recueillis dans un grand nombre de villes europeennes a la veille du lancement de la monnaie unique. Les resultats obtenus mettent en evidence que pour une distance donnee, le fait de traverser les frontieres nationales ajoute sensiblement a la difference de prix ...

The Drivers of Public Health Spending: Integrating Policies and Institutions

This paper investigates the impact of policies and institutions on health expenditures for a large panel of OECD countries for the period 2000-10. We use a set of 20 policy and institutional indicators developed by the OECD characterising the main supply-side, demand-side, and public management, coordination and financing features of health systems. The impact of these indicators is tested alongside control variables related to demographic (dependency ratio) and non-demographic (income, prices and technology) drivers of health expenditures per capita. Overall, there is a reasonably good fit between the expected signs of the coefficients for the institutional indicators and the actual estimates. By integrating the role of policies and institutions, together with the other primary determinants, our analysis is able to explain most of the cross-country variation in public health expenditures. Les determinants des depenses publiques de sante : Le role des politiques et des institutions Ce papier analyse l’impact des politiques et des institutions sur les depenses de sante pour un large ensemble de pays de l’OCDE durant la periode 2000-10. Nous utilisons un groupe de 20 indicateurs politiques et institutionnels developpes par l’OCDE et qui caracterisent principalement l’offre, la demande, la gestion publique, la coordination et le financement des systemes de sante. L’incidence de ces indicateurs est evaluee conjointement avec des variables de controle en lien avec les determinants demographiques (taux de dependance) et non demographiques (revenu, prix et technologie) des depenses de sante par tete. Globalement, il existe une adequation satisfaisante entre les signes attendus des coefficients des indicateurs institutionnels et les estimations. En integrant le role des politiques et des institutions avec les autres determinants principaux, notre analyse reussit a expliquer la majorite de la variation entre pays des depenses publiques de sante.

The Problems and Prospects Faced by Pay-As-You-Go Pension Systems

Without further reforms, pay-as-you-go pension systems throughout most of continental Europe face unsustainable financial imbalances as their population ages. Though this paper describes the Greek pension system, which will face especially severe financial strains, it sheds light on the pension problems of other continental European countries, as these countries’ systems share many common features. The main focus of the paper is on the factors of the Greek pay-as-you-go system which result in its future unsustainability. Exacerbating the deteriorating demographics, the system is characterised by very generous pensions relative to contributions for the pre-1993 generation of workers, as well as other incentives/provisions to retire early. To highlight these facets, the study provides simulations of the generosity of different categories of individual pensions under different scenarios as well as projections of aggregate pension expenditures and revenues. It concludes with options ... S’ils ne font pas l’objet de reformes supplementaires, les systemes de retraite par repartition de la plupart des pays d’Europe continentale vont etre confrontes a des desequilibres financiers non viables dus au vieillissement de la population. Ce document decrit le systeme grec de retraite qui va devoir faire face a des difficultes financieres particulierement importantes. Cependant il expose aussi les problemes des systemes de pension des autres pays d’Europe continentale puisque ces regimes ont de nombreuses caracteristiques communes. Le document analyse principalement les elements du systeme grec de retraite par repartition qui conduiront a sa non-viabilite future. Outre l’evolution demographique defavorable, le systeme se caracterise par la generosite des pensions au regard des cotisations pour les travailleurs entres dans la population active avant 1993, ainsi que par d’autres incitations/dispositifs qui favorisent les departs en retraite anticipee. Pour mettre en evidence ...

Sectoral Shifts in Europe and the United States

This paper sheds light on the importance of aggregation bias in the analysis of wage shares developments over time and across countries. We focus on five European countries and the United States and show that the trend decline in the aggregate wage share observed in these countries over much of the 1980s and 1990s partly reflects changes in the sectoral composition of the economy. The application of a fixed-weight aggregation method changes the profile of the observed wage share in a significant way: in particular there is no longer sign of an overshooting of the wage share levels of the early-1970s. Error-correction wage equations based on the adjusted wage shares generally have a better regression fit and show long-run elasticities of real wages to unemployment that vary less across countries and are substantially lower than those obtained with observed shares. These results are broadly confirmed by wage regressions using sectoral data and the Pooled Mean Group estimator ...

La prime salariale pour l'éducation supérieure

Cette etude presente des estimations transversales de la prime salariale horaire brute pour l’education superieure qui reposent sur un cadre harmonise pour 21 pays de l’OCDE entre les annees 90 et le debut des annees 2000. L’etude est basee sur des enquetes internationales aupres des menages afin de maximiser la comparaison entre pays. L’ « extension » des equations salariales de Mincer donne comme resultat une prime salariale horaire moyenne brute a l’achevement d’un diplome d’education superieure de 55% en 2001 (en moyenne pour les hommes et les femmes pour tous les pays), ce qui est equivalent a pres de 11% par annee d’education superieure. Les primes salariales varient peu au cours du temps mais de maniere significative a travers les pays : les plus faibles sont en Grece et en Espagne a 6% (hommes et femmes) ainsi qu’en Autriche et en Italie (femmes) alors qu’elles atteignent 14%-18% en Hongrie, au Portugal et dans la plupart des pays anglo-saxons. Etant donne que la prime salariale est le determinant le plus important du rendement prive de l’education superieure, les resultats peuvent avoir des implications importantes pour les politiques visant l’augmentation du stock de capital humain.This study focuses on the single most important component of the private return on tertiary education, the gross wage premium. There are at least two additional reasons for paying particular attention to wage premia. First, the wage premium earned by existing graduates is easy to observe, so high-school leavers can be assumed to take it into account when deciding for or against enrolment in tertiary education. Second, to the extent that wages reflect marginal labour productivity, estimates of wage premia are sometimes used to assess the quality of human capital in an economy with a view to correcting simpler measures based on years of schooling or attainment levels.