References of "Pestieau, Pierre"
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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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See detailRéformer le système des retraites belge
de la Croix, David; Pestieau, Pierre ULg

in Regards Economiques (2007), (51), 1-12

La résistance aux réformes des retraites provient en partie d'une incompréhension des mécanismes économiques sousjacents à la problématique. Ces réformes touchent aux paramètres clés du système de ... [more ▼]

La résistance aux réformes des retraites provient en partie d'une incompréhension des mécanismes économiques sousjacents à la problématique. Ces réformes touchent aux paramètres clés du système de retraite: taux de cotisation, montant des prestations et âge de départ à la retraite. Nous montrons qu’accroître le taux d’activité des travailleurs âgés n’aura pas d’effet négatif sur l’emploi des autres catégories de travailleurs. En outre, nous défendons l’idée qu’il est important de maintenir un revenu de remplacement décent et lié à l’évolution du coût de la vie et de garantir un minimum de subsistance à toute personne n’ayant pu contribuer suffisamment. [less ▲]

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See detailTagging and redistributive taxation
Boadway, Robin; Pestieau, Pierre ULg

in Annales d'Economie et de Statistique (2007), (83/84),

We study optimal redistributive taxes when the population can be disaggregated into tagged groups. Under reasonable circumstances, the tax system will be more redistributive in the tagged group with the ... [more ▼]

We study optimal redistributive taxes when the population can be disaggregated into tagged groups. Under reasonable circumstances, the tax system will be more redistributive in the tagged group with the higher proportion of high-ability persons. We extend the analysis to the case where the tag reflects differences in resources required to achieve a given level of utility. The compensation given for needs depends on whether the income tax structure is differentiated by needs groups. [less ▲]

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See detailRetirement age and health expenditures
Cremer, Helmuth; Lozachmeur, Jean-Marie; Pestieau, Pierre ULg

in Annales d'Economie et de Statistique (2007), (83/84),

We study the design of pension benefits and contributions when an individual’s health status depends on his consumption of health services. Health services can be subsidized and their uniform public ... [more ▼]

We study the design of pension benefits and contributions when an individual’s health status depends on his consumption of health services. Health services can be subsidized and their uniform public provision is also considered. We show that the second-best policy induces early retirement and that health expenditures ought to be subsidized under plausible assumptions. When only linear subsidies are available, the case for uniform public provision of health services appears to be quite strong. [less ▲]

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See detailDisability Testing and Retirement
Cremer, Helmuth; Lozachmeur, Jean-Marie; Pestieau, Pierre ULg

in B.E. Journal of Economic Analysis & Policy (2007)

We study the design of retirement and disability policies and illustrate the often observed exit from the labor force of healthy workers through disability insurance schemes. In our model, two types of ... [more ▼]

We study the design of retirement and disability policies and illustrate the often observed exit from the labor force of healthy workers through disability insurance schemes. In our model, two types of individuals, disabled and leisure-prone ones, have the same disutility for labor and cannot be distinguished. However, they are not counted in the same way in social welfare. We determine first- and second-best optimal benefit levels and retirement ages. Then we introduce the possibility of testing that can sort out disabled workers from healthy but retirement-prone workers. We show that such testing can increase both social welfare and the rate of participation of elderly workers; in addition disabled workers are better taken care of. It is not optimal to test all applicants. Surprisingly, the (second-best) solution may imply later retirement for the disabled than for the leisure-prone. In that case, the disabled are compensated by higher benefits. [less ▲]

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See detailMicro-simulation of Social Security reforms in Belgium
Jousten, Alain ULg; Desmet, R.; Perelman, Sergio ULg et al

in Gruber, J.; Wise, D. (Eds.) Social Security Programs and Retirement around the World: Fiscal Implications of Reform (2007)

The present paper analyzes the budgetary impact of various Social Security reforms in the Belgian institutional setting. Our approach relies on parameters that were derived in Dellis et alii (2002) using ... [more ▼]

The present paper analyzes the budgetary impact of various Social Security reforms in the Belgian institutional setting. Our approach relies on parameters that were derived in Dellis et alii (2002) using a micro-modeling strategy. Focusing our attention on a hypothetical age cohort, we illustrate the budgetary impact that the reforms considered might have on the budget of the federal government. [less ▲]

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See detailDéveloppement d'un indicateur portant sur l'évolution du travail au noir en Belgique
Pacolet, Jozef; Pestieau, Pierre ULg; Baeyens, Katleen et al

Report (2007)

La mission du CREPP était de présenter une synthèse des travaux portant sur la mesure du travail au noir en général et en Belgique en particulier. Elle était aussi de suggérer des pistes concrètes ... [more ▼]

La mission du CREPP était de présenter une synthèse des travaux portant sur la mesure du travail au noir en général et en Belgique en particulier. Elle était aussi de suggérer des pistes concrètes permettant de mieux appréhender la réalité du travail au noir et les moyens de lutter contre lui. Dans le texte ci-dessous on trouvera la synthèse des études existantes qui conclut que la plupart des estimations macroéconomiques sont discutables, voire fan¬taisistes. Notre conviction est que l’approche macroéconomique est stérile. L’approche correcte est sectorielle et elle devrait s’appuyer sur deux types de données: les données administratives et les données d’enquêtes portant sur tous les acteurs: offreurs, demandeurs et autorités de contrôle. [less ▲]

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See detailExploring the synergy between promoting active participation in work and in society and social, health and long-term care strategies
Grammenos, S.; Atta, C.; Pestieau, Pierre ULg et al

Report (2007)

The purpose of this study is to provide information that can help the Commission and EU Member States engage in policy discussion on how social, health and long-term care systems can help enhance ... [more ▼]

The purpose of this study is to provide information that can help the Commission and EU Member States engage in policy discussion on how social, health and long-term care systems can help enhance participation in work and family, social and community activities and how, in turn, participation in paid employment, family, social and community activities can contribute to healthy and autonomous living at present and in the future. Part I presents a review of the literature on the synergy between health and activity/work. Health affects work and social participation but on the other side work and activity affect health. We focus on people aged 55 and over as this interrelation (double causality) seems to be significant for important life events (retirement decision, social participation, etc.) of this age group. Part II presents a quantitative analysis and tries to identify national specificities. It presents the lessons which we can draw from European surveys. It presents a quantitative analysis based on the LFS, the EU-SILC, the ECHP UDB and SHARE surveys. The fourth step summarises national policies and gives a comparative analysis, while the fifth step presents the best practices. Finally, the last part summarises the main conclusions and the policy implications. [less ▲]

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See detailThe Social Protection of the Elderly : Comparison of Two Indicators of Generosity
Lefebvre, Mathieu ULg; Pestieau, Pierre ULg

in Marin, B.; Zaidi, A. (Eds.) Mainstreaming Ageing. Indicators to Monitor Sustainable Policies (2007)

The purpose of this article is to distinguish between two types of generosity of the welfare state towards the elderly. These are: average generosity and generosity towards the poor. We compare these ... [more ▼]

The purpose of this article is to distinguish between two types of generosity of the welfare state towards the elderly. These are: average generosity and generosity towards the poor. We compare these indicators across about 20 countries and show how they relate to each other. In particular, we show that a social protection system that is contributive benefits from a large political support and tends to be generous towards the poor. [less ▲]

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See detailPensions with endogenous and stochastic fertility
Cremer, Helmuth; Gahvari, Firouz; Pestieau, Pierre ULg

in Journal of Public Economics (2006), 90(12), 2303-2321

This paper studies the design of a pay-as-you-go social security system in an overlapping generations model where fertility is in part stochastic and in part determined through capital investment. If ... [more ▼]

This paper studies the design of a pay-as-you-go social security system in an overlapping generations model where fertility is in part stochastic and in part determined through capital investment. If investments are publicly observable, pension benefits must be linked positively to the level of investment, and payroll taxes negatively to the number of children. The outcome is characterized by full insurance with all parents, regardless of their number of children, enjoying identical consumption levels. Without observability, benefits must increase, and payroll taxes decrease, with the number of children. The second-best level of investment, and the resulting average fertility rate, are less than their corresponding first-best levels. (c) 2006 Elsevier B.V. All rights reserved. [less ▲]

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See detailSocial Insurance and Redistribution with Moral Hazard and Adverse Selection
Boadway, Robin; Leite-Monteiro, Manuel; Pestieau, Pierre ULg et al

in Scandinavian Journal of Economics (2006), 108(2), 279-298

Rochet (1991) showed that with distortionary income taxes, social insurance is a desirable redistributive device when risk and ability are negatively correlated. This finding is re-examined when ex post ... [more ▼]

Rochet (1991) showed that with distortionary income taxes, social insurance is a desirable redistributive device when risk and ability are negatively correlated. This finding is re-examined when ex post moral hazard and adverse selection are included, and under different informational assumptions. Individuals can take actions influencing the size of the loss in the event of accident (or ill health). Social insurance can be supplemented by private insurance, but private insurance markets are affected by both adverse selection and moral hazard. We study how equity and efficiency considerations should be traded off in choosing the optimal coverage of social insurance when those features are introduced. The case for social insurance is strongest when the government is well informed about household productivity. [less ▲]

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See detailWealth Transfer Taxation: A Survey of the Theoretical Litterature
Cremer, Helmuth; Pestieau, Pierre ULg

in Kolm, Serge-Christophe; Mercier Ythier, Jean (Eds.) Handbook of the Economics of Giving, Altruism and Reciprocity. Volume 2 (2006)

The purpose of this paper is to survey the theoretical literature on wealth transfer taxation. The focus is normative: we are looking at the design of an optimal tax structure from the standpoint of both ... [more ▼]

The purpose of this paper is to survey the theoretical literature on wealth transfer taxation. The focus is normative: we are looking at the design of an optimal tax structure from the standpoint of both equity and efficiency. The gist of this survey is that the optimal design crucially depends on the assumed bequest motives. Alternative bequest motives are thus analyzed either in isolation or combined. Even though there are as many results as models and as many models as combinations of bequest motives, the general conclusion is that the case for a zero taxation of inheritance is very weak. [less ▲]

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See detailPensions with heterogenous individuals and endogenous fertility
Cremer, Helmuth; Gahvari, Firouz; Pestieau, Pierre ULg

in Journal of Population Economics (2006), (21), 961-981

This paper studies the design of pension schemes in a society where fertility is endogenous and parents differ in their ability to raise children. In a world with perfect information, a pay-as-you-go ... [more ▼]

This paper studies the design of pension schemes in a society where fertility is endogenous and parents differ in their ability to raise children. In a world with perfect information, a pay-as-you-go social security system is characterized by equal pensions for all but different contributions which may or may not increase with the number of children. Additionally, fertility must be subsidized at the margin to correct for the externality that accompanies fertility. In a world of asymmetric information, incentiverelated distortions supplement the Pigouvian subsidy. These may either require an additional subsidy or an offsetting tax on fertility depending on whether the redistribution is towards people with more or less children. In the former case, pensions are decreasing in the number of children; in the latter case, they are increasing. [less ▲]

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See detailOptimal accumulation in an endogenous growth setting with human capital
Docquier, Frédéric; Paddison, Olivier; Pestieau, Pierre ULg

in Journal of Economic theory (2006), 134(1), 361-378

This paper considers a three-overlapping-generations model of endogenous growth wherein human capital is the engine of growth. It first contrasts the laissez-faire and the optimal solutions Three possible ... [more ▼]

This paper considers a three-overlapping-generations model of endogenous growth wherein human capital is the engine of growth. It first contrasts the laissez-faire and the optimal solutions Three possible accumulation regimes are distinguished. Then it discusses a standard set of tax-transfer instruments that allow for decentralization of the social optimum. Within the limits of our model, the rationale for the standard pattern of intergenerational transfers (the working-aged financing the education of the young and the pension of the old) is seriously questioned. On pure efficiency grounds, the case for generous public pensions is rather weak. (c) 2006 Elsevier Inc. All rights reserved. [less ▲]

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See detailThe Generosity of the Welfare State Towards the Elderly
Lefebvre, Mathieu ULg; Pestieau, Pierre ULg

in Empirica (2006)

This paper distinguishes among three types of generosity of social security systems: average generosity, generosity towards early retirement and generosity towards the poor. On the basis of theoretical ... [more ▼]

This paper distinguishes among three types of generosity of social security systems: average generosity, generosity towards early retirement and generosity towards the poor. On the basis of theoretical predictions, it examines the statistical correlations among those types of generosity for 14 OECD countries over the period 1985-2000. It also shows how they have evolved over time and tries to relate this evolution to the process of economic integration. There are three main findings, the first one being a positive relation between average social security spending and poverty alleviation. There is the negative relation between average spending and inequality reduction. Finally, over the period 1985-95 one sees that poverty alleviation increases on average, but to a degree that decreases with economic openness. [less ▲]

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See detailLitterature review on the redistributive effects of pension systems
Grammenos, S.; Lefèbvre, Mathieu; Pestieau, Pierre ULg et al

Report (2006)

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