References of "Pestieau, Pierre"
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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 endogenous and stochastic fertility
Cremer, Helmuth; Gahvari, Firouz; Pestieau, Pierre ULg

in Journal of Public Economics (2006), (02581), 1-19

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. [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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See detailOptimal income taxation and the ability distribution: Implications for migration equilibria
Hamilton, J.; Pestieau, Pierre ULg

in International Tax and Public Finance (2005), 12(1), 29-45

As recently argued by Diamond (1998), one of the key factors explaining the progressivity of an optimal non-linear income tax is the distribution of productivity among workers. Migration is one source of ... [more ▼]

As recently argued by Diamond (1998), one of the key factors explaining the progressivity of an optimal non-linear income tax is the distribution of productivity among workers. Migration is one source of changes in the productivity distribution. How changes in the population's ability distribution affect optimal income tax schedules has received little attention. Changing the distribution generally affects both the objective function and the government budget constraint. We first consider the comparative statics of the fraction of highly-skilled workers with maximin and maximax welfare functions (so that only the second effect is present) and a quasi-linear utility function. We also present some results for a utilitarian social welfare function. We then study the interaction between mobility and redistributive taxation. We consider mobility by either the skilled or unskilled population under majority voting where governments take the population as fixed. If individuals choose to relocate independently, having identical ability distributions is always a stable equilibrium when the unskilled are the mobile group. However, this is not always the case when the skilled are mobile. If groups of individuals can choose where to locate, having identical ability distributions across regions is only an equilibrium when the mobile type has an overall majority. [less ▲]

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See detailVoting on pensions with endogenous retirement age
Casamatta, G.; Cremer, H.; Pestieau, Pierre ULg

in International Tax and Public Finance (2005), 12(1), 7-28

It is often argued that the observed trend towards early retirement is due mainly to the implicit tax imposed on continued activity of elderly workers. We study the relevance of such a distortion in a ... [more ▼]

It is often argued that the observed trend towards early retirement is due mainly to the implicit tax imposed on continued activity of elderly workers. We study the relevance of such a distortion in a political economy model with endogenous age of retirement. The setting is a two-period overlapping generations model. Individuals differ in their productivity. In the first period they work a fixed amount of time; in the second, they choose when to retire and then receive a flat rate pension benefit. Pensions are financed by a payroll tax on earnings in the first and in the second period of life. Such a tax is non distortionary in the first period; it is distortionary in the second period. We allow for some rebating of the second period tax. Individuals vote on the level of the payroll tax given the rebate which can range from 0 (biased system) to 100% (neutral system). We provide sufficient conditions for the existence of a voting equilibrium and study its properties. Under these conditions, high tax rates are supported by all the old and by low productivity young individuals. We show that the pivotal voter is a young individual. The number of young individuals who have higher wage than the pivotal voter equals half the total population. We also show that the introduction of a bias increases the political support for the pension system. Finally, we study the simultaneous determination of the bias and the tax rate through a voting procedure and show that the equilibrium (if any) implies a bias which is always positive and may or not be larger than one. [less ▲]

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See detailLong-term care insurance and optimal taxation for altruistic children
Jousten, Alain ULg; Lipszyc, B.; Marchand, Maurice et al

in Finanzarchiv (2005), 61(1), 1-18

We model long-term care insurance in an optimal taxation framework. Every adult decides upon the amount and type of care he purchases for his dependent parent. We consider two alternatives: nursing-home ... [more ▼]

We model long-term care insurance in an optimal taxation framework. Every adult decides upon the amount and type of care he purchases for his dependent parent. We consider two alternatives: nursing-home care provided by the government, and home care paid by the child with some lump-sum subsidy by the government. The only source of information asymmetry is the government's inability to observe the degree of altruism of the adult child for his/her parent. Further tax collection entails some social costs. In such a second-best setting, we show that the quality of institutional care has to be kept relatively low and that compared to altruistic children, nonaltruistic ones enjoy a high level of consumption. [less ▲]

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See detailRaising the age of retirement: an example of political ratchet effect
Lefebvre, Mathieu ULg; Pestieau, Pierre ULg; Vidal, Jean-Pierre et al

Report (2005)

Political resistance to a progressive increase in the retirement age is widespread in a number of European countries. We present a simple model explaining why such a reform can be opposed even when it is ... [more ▼]

Political resistance to a progressive increase in the retirement age is widespread in a number of European countries. We present a simple model explaining why such a reform can be opposed even when it is profitable to a majority of citizens. Then, we try to explain the existence of wide differences in the average length of retirement across countries and over time. [less ▲]

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See detailSocial Security in Belgium: Distributive Outcomes
Jousten, Alain ULg; Lefebvre, Mathieu ULg; Pestieau, Pierre ULg et al

Report (2005)

The paper analyzes the link between old-age income programs and economic outcomes in Belgium. We use a simulation methodology to construct an average pension generosity variable. Our regression analysis ... [more ▼]

The paper analyzes the link between old-age income programs and economic outcomes in Belgium. We use a simulation methodology to construct an average pension generosity variable. Our regression analysis explores the link with distributional outcomes in income, consumption and more subjective indicators. Results document the weak link between average generosity and distributional outcomes across a heterogeneous population. [less ▲]

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See detailFaut-il un ou plusieurs indicateurs d'exclusion sociale?
Lefebvre, Mathieu ULg; Perelman, Sergio ULg; Pestieau, Pierre ULg

in Revue Belge de Sécurité Sociale (2005), (1), 59-76

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