Róbert Iván Gál

The effects of child-related benefits and pensions on fertility by birth order: A test on Hungarian data

Using aggregate time-series data from post-war Hungary, we investigated the effect of child-related benefits and pensions on overall fertility and fertility by birth order. The results indicate moderate effects that are robust across a wide range of specifications. According to our estimates, a 1-per-cent increase in child-related benefits would increase total fertility by 0.2 per cent, while the same increase in pensions would decrease fertility by 0.2 per cent. The magnitude of both effects increases by birth order; this is more robust for child-related benefits.

Financing the lifecycle or mitigating poverty: Redistribution in the Hungarian welfare system by age and income

There seems to be a general consent in the expert community that Hungarian social policy provides poorly targeted benefits and services that are prone to Mattheweffects. Our results confirm this observation but we also find that the data offer an alternative interpretation of what the Hungarian welfare state is actually doing. Instead of supporting the poor it reallocates resources from the working age population to children and elderly people. It functions as an intermediary between overlapping generations that seek to finance their lifecycle by exploiting the opportunity offered by the very overlap, the fact that contemporaries are of different age. In a cross-sectional framework we analyse reallocations by age and income simultaneously and assess the relative importance of these two variables in explaining the access and contribution to public benefits. Our data from 2010 (based on EU-SILC and the Household Budget Survey) covers public transfers (cash and in-kind) and both direct and indirect taxes. We compare the importance of age and income in explaining transfers and taxes in a regression-analysis framework by studying causal importance (comparing coefficients) and dispersion importance of the variables (using Shapley-value decomposition). We find that income is irrelevant in explaining access to benefits and services but age is important. On the contribution side, income proves as important as age. This qualifies our description of the Hungarian welfare system: it serves as a channel through which affluent people in their working age support people in inactive age of all income groups.

Pro-Elderly Welfare States within Child-Oriented Societies

ABSTRACT Families and policies both are main vehicles of intergenerational transfers. Working-age people are net contributors; children and older persons net beneficiaries. However, there is an asymmetry in socialization. Working-age people pay taxes and social security contributions to institutionalize care for older persons as a generation, but invest private resources to raise their own children, often with large social returns. This results in asymmetric statistical visibility. Elderly transfers are near-fully observed in National Accounts; those to children much less. Analysing ten European societies, we employ National Transfer Accounts to include public and private transfers, and National Time Transfer Accounts to value unpaid household labour. All three transfer channels combined, children receive more than twice as many per-capita resources as older persons. Europe is a continent of elderly-oriented welfare states and strongly child-oriented parents. Since children are ever-scarcer public goods in aging societies, why has investment in them not been socialized more?

Pro-Elderly Welfare States within Pro-Child Societies: Incorporating Family Cash and Time into Intergenerational Transfers Analysis

Households and welfare states both serve as vehicles of lifecycle financing through intergenerational transfers. Working-age people are net contributors, children and the elderly are net beneficiaries. However, there is a marked asymmetry in the socialization of intergenerational transfers. Working-age people pay taxes and social security contributions to care for the elderly as a generation, but they individually spend cash and contribute time to raise their own children. This results in asymmetric visibility of intergenerational transfers. Resources flowing to the elderly are near-fully observed in National Accounts (NA), but inter- and intra-household transfers are not registered there. Using data for ten European countries representing 70 percent of the population of the EU, we employ National Transfer Accounts (NTA) to include private transfers as well. In addition, as an extension of NTA, we use National Time Transfer Accounts (NTTA) to quantify the value of time transferred within and between households in the form of unpaid labor. Only a fifth of all resource transfers to children is registered in NA; another third is made visible by NTA, but nearly half is made visible only by NTTA. Contrary to much perceived wisdom, once intra-familial transfers of cash and time are incorporated, European societies transfer more resources to children than to the elderly.

Analysis of the Standardized Pan European Personal Pension (PEPP) Product and its Impact in Four European Countries: The Netherlands, Estonia, Finland and Hungary

EIOPA has recently proposed to introduce standardized pan European personal pension products (PEPPs) that would be available in the accumulation phase, jointly with national personal pension plans. This paper analyzes the PEPPs from the perspective of the academic literature and proposes to use the PPR concept of Bovenberg and Nijman (2015) to categorize product characteristics, both in the accumulation phase as in the decumulation phase. The PPR concept can also be used to incorporate design features of the decumulation phase in the PEPP itself. A first important lesson to be learned from the academic literature is that the aim of stable income provision requires a framework where future asset returns are hedged rather than the asset only approach underlying the PEPPs. Whereas EIOPA proposes to allow switching between PEPPs only infrequently, the literature suggests that liquidity concerns are not a very convincing reason to restrict switching. Switching costs could be linked to the degree of liquidity of the portfolio. A better motivation for restriction on switching seems to be that investors might well put too much focus on recent investment performance as a predictor of future performance. As far as information disclosure is concerned more attention is recommended to the impact of biometric risks. More attention is also recommended for tax issues, because current tax provisions for national PPPs seem to be rooted in characteristics of the decumulation phase that can be avoided in the second regime. The paper concludes with a discussion of the potential impact of the PEPP proposal on PPP provision in four European countries.

Háztartás-formálódás a MIDAS modellben

A MIDAS dinamikus mikroszimulacios nyugdijmodell magyar valtozata tartalmaz egy haztartas-formalodasi modult, amely a szimulacio soran eletpalyajukon vegigkisert egyeneket osszekapcsolja. Ez lehetőve teszi a feloszto-kirovo nyugdijrendszer azon elemeinek modellezeset, amelyekben a jarulek vagy a jaradek fugg az egyen csaladi kapcsolataitol. Ilyen elemek az ozvegyi es egyeb hozzatartozoi nyugdijak, a csaladi allapottol fuggő jarulek- es jaradekmegallapitas, a valtozatos gyermekkedvezmenyek vagy a gyermekneveles-fuggő nyugdijmegallapitas. A magyar adatkornyezetben a haztartas-formalodasi modul programozasa specialis nehezsegekbe utkozik, mivel nem all rendelkezesre olyan adminisztrativ vagy kerdőives kikerdezesre epulő adatallomany, amely azon felul, hogy az egyenre nezve kapcsolattorteneti es haztartas-szerkezeti adatokat tartalmaz, kiterjed a parokra, vagy ha kiterjed is, ezt a tenyt nem rogziti. A szoba johető survey jellegű adatbazisok egyeni mintakat tartalmaznak, az adminisztrativ adatallomanyok pedig, melyek a nyugdijrendszerrel kapcsolatos relevans informaciokat gyűjtik, nem kapcsoljak ossze az egyeneket. A MIDAS modell magyar valtozata ezert egy retrospektiv haztartas-rekonstrukcios szimulaciot is elvegez.* Journal of Economic Literature (JEL) kod: C53, H55

Health Expenditure Scenarios in the New Member States: Country Report on Hungary

This country report aims to give an estimation of the development of public health care expenditures in Hungary during the first half of the 21st century. The model used for analysis is the ILO social budget model. Since this model is a full budget model, it includes not only the expenditure side, but the revenue side also. The structure of the model is presented in Section 2 of this report following a discussion of the long-term projections recently prepared for the Hungarian health care system (Section 1). The third section contains a review of main databases used by the model, while the fourth describes the underlying assumptions and development of main variables of the baseline scenario. The second part of the same section discusses alternative assumptions, aiming to provide sensitivity analyses for the baseline scenario. Results of both the baseline scenario and sensitivity analyses are presented in Section 5. Section 6 summarises these results and draws conclusions, while the final section formulates some policy recommendations based on the findings of our model (Section 7).

Health & Morbidity in the New Member States

The analysis aims to describe processes of demographic and epidemiological changes, as well as health status self-assessment in selected Central and Eastern European countries. Countries selected for analysis represent groups characterized by similar tendencies and specific health and demographic characteristics. Estonia represents the Baltic states, Bulgaria – Balkan countries, and Slovakia represents countries of Central Europe. Poland is a specific country, with demographic and epidemiological characteristics similar to Slovakia, but much larger, with a high share of rural population. In Hungary, demographic processes related to the second demographic transition began much earlier and are still dynamic, and as such constitute a reference for other CEE countries. Analysis is presented in the context of medical service utilization, impact on frequency and structure of services use. Special attention is given to those demographic and epidemiological changes that have direct impact on the frequency of medical service utilization and, as such, determine the increase of healthcare costs. The ageing process and health status improvement are the main hypothetical determinants of healthcare cost increases, and thus they are presented in more detail. Additionally, changes in health behaviour – mainly in the utilization of medical services – are discussed in the context of institutional changes in the healthcare sector.

The Social Dimension in Selected Candidate Countries in the Balkans - Bulgaria, Romania, Croatia and Turkey: Synthesis Report

The European Commission awarded a contract in November 2005 to a consortium composed of the TARKI Social Research Institute (Hungary), CASE, Center for Social and Economic Research (Poland) and CEPS to analyse the socio-economic developments and the process of structural reforms in what were then four candidate countries: Bulgaria, Croatia, Romania and Turkey. The objective was to identify the major challenges in the current demographic, social and economic context that could be considered relevant in determining the capacity of these countries to function in the European Union. This study presents a synthesis of the findings for all four countries, and consists of an analytical section and a statistical annex. The four country reports are published separately in this same series.