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Public policy for pensions, health and sickness insurance

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  • Palmer, Edward

Abstract

This document is prepared by Edward Palmer, Consultant of the Project ¨Inclusion of the European Nordic Model in the debate concerning reform of social protection schemes in Latin American and the Caribbean¨ (SWE/05/001). This project that the Economic Commission for Latin America and the Caribbean (ECLAC) is carrying out in the Social Development Division, with the financial support of Swedish International Development Agency (SIDA). Prepared as a support to the document Shaping the Future of Social Protection: Access, Financing and Solidarity" presented in the XXXI ECLAC Session Period carried out in Montevideo, Uruguay during March, 20 to 24, 2006. The views expressed in this document, which has been reproduced without formal editing, are those of the authors and do not necessarily reflect the views of the Organization. Abstract This paper discusses the rationale of social insurance and social insurance institutions as they have emerged and developed in economically mature nations. The aim of the paper is to present discuss experience in a perspective that can be useful for discussions in Latin America. Key issues in system and institution design are identified and discussed, and examined with reference to experience from Sweden. The paper contains three major sections and concludes with some final remarks. The first of these discusses the case for publicly mandated insurance. The second discusses models and issues for health care and sickness insurance and the third section models and issues for pension insurance. The paper presents the arguments favoring mandated insurance for health care and pensions. The paper concludes that public provision of health care insurance combined with some private-public mix of health care services has strong advantages in the Latin American setting. The paper discusses various institutional issues in designing health care and sickness insurance, referring specifically to experience from Sweden. Likewise, the paper argues in favour of mandated old age pension insurance, presenting the arguments for why the present trend in pension reform is in the direction of notional (NDC) and financial (FDC) defined contribution earnings-related schemes. A large portion of the population in Latin America will not be sufficiently covered by earnings-related schemes, stressing the need for the public sector to tread in with income support for the poor, only partially covered or wholly uncovered population as the market economy develops. The safety net will need to be a publicly provided defined benefit or means-tested income support, with the defined benefit taking the form of a minimum pension guarantee or demogrant."

Suggested Citation

  • Palmer, Edward, 2006. "Public policy for pensions, health and sickness insurance," Documentos de Proyectos 3680, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    • Handle: RePEc:ecr:col022:3680
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    References listed on IDEAS

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    1. Edward Palmer, 1999. "Exit from the Labor Force for Older Workers: Can the NDC Pension System Help?," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 24(4), pages 461-472, October.
    2. Assar Lindbeck & Mats Persson, 2003. "The Gains from Pension Reform," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 74-112, March.
    3. Robert Holzmann & Edward Palmer, 2006. "Pension Reform : Issues and Prospects for Non-Financial Defined Contribution Schemes," World Bank Publications - Books, The World Bank Group, number 6983.
    4. Unknown, 2005. "Forward," 2005 Conference: Slovenia in the EU - Challenges for Agriculture, Food Science and Rural Affairs, November 10-11, 2005, Moravske Toplice, Slovenia 183804, Slovenian Association of Agricultural Economists (DAES).
    5. Góra, Marek & Palmer, Edward, 2004. "Shifting Perspectives in Pensions," IZA Discussion Papers 1369, Institute of Labor Economics (IZA).
    6. Edward Palmer, 2002. "Swedish Pension Reform: How Did It Evolve, and What Does It Mean for the Future?," NBER Chapters, in: Social Security Pension Reform in Europe, pages 171-210, National Bureau of Economic Research, Inc.
    7. Jonathan Gruber & David A. Wise, 1999. "Social Security and Retirement around the World," NBER Books, National Bureau of Economic Research, Inc, number grub99-1.
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    Cited by:

    1. Guillermo Cruces & Quentin Wodon, 2007. "Risk-adjusted poverty in Argentina: measurement and determinants," Journal of Development Studies, Taylor & Francis Journals, vol. 43(7), pages 1189-1214.
    2. Xiao Xu & Gail A. Jensen, 2012. "Does health insurance reduce illness-related worker absenteeism?," Applied Economics, Taylor & Francis Journals, vol. 44(35), pages 4591-4603, December.
    3. Cruces, Guillermo & Galiani, Sebastian, 2007. "Fertility and female labor supply in Latin America: New causal evidence," Labour Economics, Elsevier, vol. 14(3), pages 565-573, June.
    4. James, Vanus, 2007. "New directions for development banking in the Caribbean: financing to take advantage of unlimited supplies of labour skills and entrepreneurship," Financiamiento para el Desarrollo 5172, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    5. Bebczuk, Ricardo N., 2007. "Access to credit in Argentina," Financiamiento para el Desarrollo 5163, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    6. Sandiford, Wayne, 2007. "Development banking in the Eastern Caribbean: the case of Saint Lucia and Grenada," Financiamiento para el Desarrollo 5171, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    7. Collister, Keith R., 2007. "A new approach to development banking in Jamaica," Financiamiento para el Desarrollo 5173, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    8. Poteraj, Jarosław, 2008. "Pension systems in 27 EU countries," MPRA Paper 31053, University Library of Munich, Germany.
    9. Jaroslav Vostatek, 2013. "Politická ekonomie financování zdravotní péče [Political Economy of Health Care Financing]," Politická ekonomie, Prague University of Economics and Business, vol. 2013(6), pages 834-851.

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