IDEAS home Printed from https://ideas.repec.org/p/wop/sprcdp/0054.html
   My bibliography  Save this paper

The Use of Replacement Rates in International Comparisons of Benefit Systems

Author

Listed:
  • Peter Whiteford

Abstract

Comparative studies of social security systems have increasingly turned towards the use of replacement rates as measures of the level of benefits in different countries and therefore of the degree of social protection afforded by different welfare systems. The rationale for this is that replacement rates provide consistent measures of the relative generosity of payments and therefore indicate the ‘quality’ of social security systems. This paper reviews the use of replacement rates in comparisons of the generosity of retirement pensions and argues that they are not necessarily reliable as such measures. This reflects a number of factors, including incomplete measurement of benefit packages and differences in what must be bought out of disposable incomes. Most importantly, the paper suggests that the levels of earnings in different countries are not independent of the processes of redistribution. In particular, countries which rely on social security contributions from employers appear to provide more generous benefits than those which rely on income taxes or employee contributions. This is a consequence of the fact that employer contributions do not figure specifically in the calculation of replacement rates. The relative generosity of benefit systems is overstated in countries which rely on employer social security contributions to fund benefits. The paper concludes that a range of complementary indicators of social security systems should be used in future analysis of these issues.

Suggested Citation

  • Peter Whiteford, 1995. "The Use of Replacement Rates in International Comparisons of Benefit Systems," Discussion Papers 0054, University of New South Wales, Social Policy Research Centre.
    • Handle: RePEc:wop:sprcdp:0054
    as

    Download full text from publisher

    File URL: http://www.sprc.unsw.edu.au/dp/dp054.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gerry Redmond, 1999. "Incomes, incentives and the growth of means-testing in Hungary," Fiscal Studies, Institute for Fiscal Studies, vol. 20(1), pages 77-99, March.
    2. Peter Saunders, 1994. "The Role, Value and Limitations of Poverty Research," Discussion Papers 0053, University of New South Wales, Social Policy Research Centre.
    3. Sheila Shaver, 1992. "Body Rights, Social Rights and the Liberal Welfare State," Discussion Papers 0038, University of New South Wales, Social Policy Research Centre.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gerry Redmond, 1999. "Tax-benefit Policies and Parents' Incentives to Work: The Case of Australia 1980-1997," Discussion Papers 00104, University of New South Wales, Social Policy Research Centre.
    2. Peter Saunders, 1998. "Global Pressures, National Responses: The Australian Welfare State in Context," Discussion Papers 0090, University of New South Wales, Social Policy Research Centre.
    3. Sheila Shaver & Michael Fine, 1995. "Social Policy and Personal Life: Changes in State, Family and Community in the Support of Informal Care," Discussion Papers 0065, University of New South Wales, Social Policy Research Centre.
    4. Peter Saunders, 1998. "Using Budget Standards to Assess the Well-Being of Families," Discussion Papers 0093, University of New South Wales, Social Policy Research Centre.
    5. Bruce Bradbury, 1999. "Tax Theory and Targeting: A Survey," Discussion Papers 00100, University of New South Wales, Social Policy Research Centre.
    6. Peter Saunders, 1997. "Developing Policy Planning and Research Capabilities in the Asia Pacific," Discussion Papers 0078, University of New South Wales, Social Policy Research Centre.
    7. Bruce Bradbury, 1996. "Are the Low Income Self-employed Poor?," Discussion Papers 0073, University of New South Wales, Social Policy Research Centre.
    8. Peter Saunders, 1995. "Improving Work Incentives in a Means-Tested Welfare System: The 1994 Australian Social Security Reforms," Discussion Papers 0056, University of New South Wales, Social Policy Research Centre.
    9. Peter Saunders, 1997. "Poverty, Choice and Legitimacy," Discussion Papers 0076, University of New South Wales, Social Policy Research Centre.
    10. Peter Saunders, 1993. "Economic Adjustment and Distributional Change: Income Inequality and Poverty in Australia in the Eighties," Discussion Papers 0047, University of New South Wales, Social Policy Research Centre.
    11. Marilyn McHugh & Jane Millar, 1996. "Sole Mothers in Australia: Supporting Mothers to Seek Work," Discussion Papers 0071, University of New South Wales, Social Policy Research Centre.
    12. Tony Eardley & George Matheson, 1999. "Australian Attitudes to Unemployment and Unemployed People," Discussion Papers 00102, University of New South Wales, Social Policy Research Centre.
    13. Bruce Bradbury, 1992. "The Welfare Interpretation of Family Size Equivalence Scales," Discussion Papers 0037, University of New South Wales, Social Policy Research Centre.
    14. Marilyn McHugh, 1999. "The Costs of Children: Budget Standards Estimates and the Child Support Scheme," Discussion Papers 00103, University of New South Wales, Social Policy Research Centre.
    15. Michael Fine, 1999. "The Responsibility for Child and Aged Care: Shaping Policies for the Future," Discussion Papers 00105, University of New South Wales, Social Policy Research Centre.
    16. Melanie Henwood, 1999. "Home and Away: Reflections on Long-term Care in the UK and Australia," Discussion Papers 00101, University of New South Wales, Social Policy Research Centre.
    17. Peter Saunders, 1998. "Defining Poverty and Identifying the Poor: Reflections on the Australian Experience," Discussion Papers 0084, University of New South Wales, Social Policy Research Centre.
    18. Bjorn Hallerod, 1994. "A New Approach to the Direct Measurement of Consensual Poverty," Discussion Papers 0050, University of New South Wales, Social Policy Research Centre.
    19. Sheila Shaver, 1998. "Extension Admidst Retrenchment: Gender and Welfare State Restructuring in Australia and Sweden," Discussion Papers 0092, University of New South Wales, Social Policy Research Centre.
    20. Sheila Shaver, 1996. "Liberalism, Gender and Social Policy," Discussion Papers 0068, University of New South Wales, Social Policy Research Centre.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wop:sprcdp:0054. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Krichel (email available below). General contact details of provider: https://edirc.repec.org/data/spnswau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.