References of "Pestieau, Pierre"
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See detailTagging with leisure needs
Pestieau, Pierre ULg

Conference (2009, May 14)

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See detailSocial insurance and redistribution
Pestieau, Pierre ULg

Conference (2009, March 31)

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See detailForced Saving, Redistribution, and Nonlinear Social Security Schemes
Cremer, Helmuth; De Donder, Philippe; Maldonado, Dario et al

in Southern Economic Journal (2009), (76), 86-98

This paper studies the design of nonlinear social security schemes when individuals differ in productivity and in their degree of myopia. Myopic individuals may not save ‘‘enough’’ for their retirement ... [more ▼]

This paper studies the design of nonlinear social security schemes when individuals differ in productivity and in their degree of myopia. Myopic individuals may not save ‘‘enough’’ for their retirement. The welfare function is paternalistic: The rate of time preference of the farsighted is used for both types. We show that the solution does not necessarily imply forced savings for the myopics: Paternalistic considerations are mitigated by incentive effects. Numerical results suggest that as the proportion of myopic individuals increases, there is less redistribution and more forced saving, and the desirability of social security increases. [less ▲]

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See detailOptimal redistribution with unobservable disability:Welfarist versus non-welfarist social objectives
Racionero, María; Pestieau, Pierre ULg

in European Economic Review (2009), (53), 636-644

This paper examines the optimal non-linear income and commodity tax when the same labor disutility can receive two alternative interpretations, taste for leisure or disability, but the disability is not ... [more ▼]

This paper examines the optimal non-linear income and commodity tax when the same labor disutility can receive two alternative interpretations, taste for leisure or disability, but the disability is not readily observable. We compare the optimal policy under alternative social objectives, welfarist and non-welfarist, and conclude that the nonwelfarist objective, in which the planner gives a higher weight to the disutility of labor of the disabled individuals, is the only reasonable specification. It has some foundation in the theory of responsibility; further, unlike the other specifications it yields an optimal solution that may involve a lower labor supply requirement from disabled individuals [less ▲]

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See detailBelgian Social Protection Portrait
Atta, C.; Pestieau, Pierre ULg; Perelman, Sergio ULg

Report (2009)

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See detailProviding sustainable long term care: a looming challenge
Cremer, Helmuth; De Donder, Philippe; Pestieau, Pierre ULg

in Toulouse School of Economics (2009), (3),

Long-term care (LTC hereafter) concerns people who depend on help to carry out daily activities. It is mainly delivered informally by families and to a lesser extent formally by professional care ... [more ▼]

Long-term care (LTC hereafter) concerns people who depend on help to carry out daily activities. It is mainly delivered informally by families and to a lesser extent formally by professional care assistants and nursing homes. Most EU governments are also involved in some way in the provision or financing of LTC services. Right now, the future of LTC provision appears to be gloomy, for demographic, societal and financial reasons. This TSE Note studies the strengths and weaknesses of three institutions providing LTC services - namely the family, the State and the private insurance market - and provides policy recommendations based on the view that governments should take the leadership towards a comprehensive approach of the dependency problem, while relying as much as possible on the family and the market. [less ▲]

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See detailPiracy prevention and the pricing of information goods
Cremer, Helmuth; Pestieau, Pierre ULg

in Information Economics and Policy (2009), (21), 34-42

This paper studies the effects of piracy on prices and welfare and determines the optimal enforcement policy. A monopolist sells an information good at a non-linear price in two versions designed for two ... [more ▼]

This paper studies the effects of piracy on prices and welfare and determines the optimal enforcement policy. A monopolist sells an information good at a non-linear price in two versions designed for two types of consumers with different willingness to pay. Consumers with low willingness to pay consumers can copy the good at some cost and with some quality loss. High valuation customers cannot engage in full-fledged piracy. However, they can consume the version designed for the other customer type. We show that copying or piracy may be welfare enhancing because it enables a good to be provided to individuals with a low willingness to pay without undermining the producing firm’s ability to finance the development cost via the pricing scheme applied to high valuation consumers. There are then three levels of piracy control. The highest is that chosen by the private monopoly. The next level is the one chosen by a welfare-maximizing monopoly. The lowest level, which can be zero, is the level of control chosen by the public authority when the good is sold (and priced) by a profit-maximizing monopoly. ! 2008 Elsevier B.V. All rights reserved. [less ▲]

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See detailIs migration a good substitute for education subsidies?
Docquier, Frédéric; Faye, Ousmane; Pestieau, Pierre ULg

in Journal of Development Economics (2008), (86), 263-276

Assuming a given educational policy, the recent brain drain literature reveals that skilled migration can boost the average level <br />of schooling in developing countries. In this paper, we introduce ... [more ▼]

Assuming a given educational policy, the recent brain drain literature reveals that skilled migration can boost the average level <br />of schooling in developing countries. In this paper, we introduce educational subsidies determined by governments concerned by <br />the number of skilled workers remaining in the country. Our theoretical analysis shows that developing countries can benefit from <br />skilled emigration when educational subsidies entail high fiscal distortions. However when taxes are not too distortionary, it is <br />desirable to impede emigration and subsidize education. We then investigate the empirical relationship between educational <br />subsidies and migration prospects, obtaining a negative relationship for 105 countries. Based on this result, we revisit the country <br />specific effects of skilled migration upon human capital. We show that the endogeneity of public subsidies reduces the number of <br />winners and increases the magnitude of the losses. <br />© 2008 Elsevier B.V. All rights reserved. [less ▲]

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See detailUse and misuse of unemployment benefits for early retirement
Cremer, Helmuth; Lozachmeur, Jean-Marie; Pestieau, Pierre ULg

in European Journal of Political Economy (2008), (25), 174-185

Unemployment insurance (UI) in some countries is one of the most widely used routes to early retirement. Accordingly, firms lay off elderlyworkerswhosewages exceed their productivity. These workers then ... [more ▼]

Unemployment insurance (UI) in some countries is one of the most widely used routes to early retirement. Accordingly, firms lay off elderlyworkerswhosewages exceed their productivity. These workers then receive unemployment benefits until they enter formal retirement, even though they have effectively already exited the labor market. To persuade theminto finding the deal acceptable, they quite often may also receive some additional compensation from their employers. In this paper we consider three routes of transition fromwork to formal retirement that rely on UI: (i) standard unemployment compensation, (ii) public early retirement program yielding benefits higher than the unemployment compensation and (iii) unemployment compensation along with an income supplement provided by the former employer. The study examines under which conditions these three alternative practices can occur. © 2008 Elsevier B.V. All rights reserved. [less ▲]

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See detailLong-Term Care: the State, the Market and the Family
Motohiro, Sato; Pestieau, Pierre ULg

in Economica (2008), (75), 435-454

In this paper we study the optimal design of a long term care policy in a setting that includes three types of care to dependent parents: public nursing, private nursing and assistance in time by children ... [more ▼]

In this paper we study the optimal design of a long term care policy in a setting that includes three types of care to dependent parents: public nursing, private nursing and assistance in time by children. Private nursing can be financed either by financial aid from children or by private insurance. The social planner can use a number of instruments: public nursing, subsidy to aiding children, subsidy to private insurance premiums, all financed by a flat tax on earnings. [less ▲]

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See detailProdigality and Myopia - Two Rationales for Social Security
Possen, Uri; Pestieau, Pierre ULg

in Manchester School (2008), 76(6), 629-652

Among the rationales for social security, there is the fact that some people have to be forced to save. To explain undersaving, rational prodigality and hyperbolic preferences are often cited but treated ... [more ▼]

Among the rationales for social security, there is the fact that some people have to be forced to save. To explain undersaving, rational prodigality and hyperbolic preferences are often cited but treated separably. In this paper we study those two particular behaviors that lead to forced saving within an optimal income tax second-best setting. [less ▲]

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See detailA note on longevity enhancing investment
Eeckhoudt, Louis; Pestieau, Pierre ULg

in Economics Letters (2008)

We argue that risk averse individuals prefer to increase their longevity in the direction of rectangularization of the survival curve instead of an upward shift of that curve. Risk aversion is measured by ... [more ▼]

We argue that risk averse individuals prefer to increase their longevity in the direction of rectangularization of the survival curve instead of an upward shift of that curve. Risk aversion is measured by the concept of fear of ruin. [less ▲]

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See detailUn indicateur de l'étendue et de l'évolution du travail au noir en Belgique
Pacolet, J.; Pestieau, Pierre ULg; Baeyens, K. et al

in Revue Belge de Sécurité Sociale (2008), (4), 437-462

Although the methods for measuring the extent of undeclared work are improving continuously, they still have shortcomings today. The statistical apparatus is not adapted to the present-day needs for ... [more ▼]

Although the methods for measuring the extent of undeclared work are improving continuously, they still have shortcomings today. The statistical apparatus is not adapted to the present-day needs for mapping this phenomenon. The assignment is not simple either: making something visible that wants to remain hidden by definition. This article summarises a study that was conducted on behalf of the Belgian Science Policy and the Federal Public Service Employment, Labour and Social Dialogue in order to examine the possibilities to improve methods for measuring the extent of undeclared work in Belgium. The study revealed that eventually, a multitude of methods will have to be used. The bad image our country has because it accepts the most divergent estimates, can be turned into an advantage by taking the lead in conciliating and combining this multitude of methods. [less ▲]

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See detailInteraction of Defined Benefit Pension Plans and Social Security
Possen, Uri M.; Pestieau, Pierre ULg

in Pensions : An International Journal (2008)

This paper explores the shift from defi ned benefi t to defi ned contribution pension plans when the payout rate from social security is set optimally. This paper shows that when employees are receiving ... [more ▼]

This paper explores the shift from defi ned benefi t to defi ned contribution pension plans when the payout rate from social security is set optimally. This paper shows that when employees are receiving more of their private pensions from defi ned contribution plans one should be raising the payout rate from traditional social security rather than trying to privatise part of it. [less ▲]

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See detailSocial Desirability of Earnings Tests
Cremer, Helmuth; Lozachmeur, Jean-Marie; Pestieau, Pierre ULg

in German Economic Review (2008), 9(2), 114-134

In many countries, pension systems involve some form of earnings test; i.e. an individual’s benefits are reduced if he has labor income. This paper examines whether or not such earnings tests emerge when ... [more ▼]

In many countries, pension systems involve some form of earnings test; i.e. an individual’s benefits are reduced if he has labor income. This paper examines whether or not such earnings tests emerge when pension system and income tax are optimally designed. We use a simple model with individuals differing both in productivity and in their health status. The working life of an individual has two ‘endings’: an official retirement age at which he starts drawing pension benefits (while possibly supplementing them with some labor income) and an effective age of retirement at which professional activity is completely given up. Weekly work time is endogenous, but constant in the period before official retirement and again constant (but possibly at a different level), after official retirement. Earnings tests mean that earnings are subject to a higher tax after official retirement than before.We show under which conditions earnings tests emerge both under a linear and under a non-linear tax scheme. In particular, we show that earnings tests will occur if heterogeneities in health or productivity are more significant after official retirement than before. [less ▲]

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See detailThe base for direct taxation: commentary
Pestieau, Pierre ULg

in Banks, J.; Diamond, P.; Mirrlees, J. (Eds.) The tax base for direct taxation (2008)

The chapter of J. Banks, P. Diamond and J. Mirrlees (BDM) presents an excellent survey of the existing literature on optimal taxation and discusses a number of lessons that can be drawn from that ... [more ▼]

The chapter of J. Banks, P. Diamond and J. Mirrlees (BDM) presents an excellent survey of the existing literature on optimal taxation and discusses a number of lessons that can be drawn from that literature. One of the main lessons on which their chapter focuses concerns the treatment of capital income. The authors argue that the finding that the optimal income tax schedule should not include tax on capital is based on too many restrictions, and is thus not robust for policy purposes. Another lesson is that taxation should vary with age. Not having any quarrel with these two points, I would like in this comment to discuss a number of points too quickly dealt with or deliberately neglected by BDM. They concern the issue of tagging, the problem raised by having more than one unobservable characteristic (besides ability), the issue of myopia and prodigality, the question of equal opportunities, the taxation of couples and the threat of tax competition [less ▲]

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See detailVoting over type and generosity of a pension system when some individuals are myopic
Cremer, Helmuth; De Donder, Philippe; Maldonado, Dario et al

in Journal of Public Economics (2007), 91(10), 2041-2061

This paper studies the determination through majority voting of a pension scheme when society consists of far-sighted and myopic individuals. All individuals have the same basic preferences but myopics ... [more ▼]

This paper studies the determination through majority voting of a pension scheme when society consists of far-sighted and myopic individuals. All individuals have the same basic preferences but myopics tend to adopt a short-term view (instant gratification) when dealing with retirement saving and labor supply. Consequently, they will find themselves with low consumption after retirement and regret their insufficient savings decisions. Henceforth, when voting they tend to commit themselves into forced saving. We consider a pension scheme that is characterized by two parameters: the payroll tax rate (that determines the size or generosity of the system) and the "Bismarckian factor" that determines its redistiibutiveness. Individuals vote sequentially. We examine how the introduction of myopic agents affects the generosity and the redistributiveness of the pension system. Our main result is that a flat pension system is always chosen when all individuals are of one kind (all far-sighted or all myopic), while a less redistributive system may be chosen if society is composed of both myopic and far-sighted agents. Furthermore, while myopic individuals tend to prefer larger payroll taxes than their far-sighted counterparts, the generosity of the system does not always increase with the proportion of myopics. (c) 2007 Published by Elsevier B.V. [less ▲]

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See detailDesigning a linear pension scheme with forced savings and wage heterogeneity
Cremer, Helmuth; De Donder, Philippe; Maldonado, Dario et al

in International Tax and Public Finance (2007)

This paper studies the optimal linear pension scheme when society consists of rational and myopic individuals. Myopic individuals have, ex ante, a strong preference for the present even though, ex post ... [more ▼]

This paper studies the optimal linear pension scheme when society consists of rational and myopic individuals. Myopic individuals have, ex ante, a strong preference for the present even though, ex post, they would regret not to have saved enough. While rational and myopic persons share the same ex post intertemporal preferences, only the rational agents make their savings and labor supply decisions according to these preferences. Individuals are also distinguished by their productivity. The social objective is “paternalistic”: the utilitarian welfare function depends on ex post utilities. We examine how the presence of myopic individuals affects both the size of the pension system and the degree of redistribution it operates, with and without liquidity constraints. The relationship between proportion of myopic individuals and characteristics of the pension system turns out to be much more complex than one would have conjectured. Neither the impact on the level of pensions nor the effect on their redistributive degree is unambiguous. Nevertheless, we show that under some plausible assumptions adding myopic individuals increases the level of pension benefits and leads to a shift from a flat or even targeted scheme to a partially contributory one. However, we also provide an example where the degree of redistribution is not a monotonic function of the proportion of myopic individuals. [less ▲]

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