Post on 02-Oct-2020
Distributive systems of Economic PolicyPension, Healthcare, Education
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
Pension, the „Zero Sum Game”
SUM(Contributions)=SUM(Benefits)
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
GoalsReduce old age povertyUncrease (smooth) consumption in time
PENSION SYSTEM
Redu
ce o
ld a
ge p
over
ty
Smooth consumption in time
New Zealand, England
Australia
Singapore, Austria, Sweden
USA
Germany, France
Reasons
„Short sightedness” of employees
Moral hazard: people are eager to „overconsume” in their young age in their belief that they will be helped out in their old age
In traditional societies families care about their old members. As societies have been modernising some elderly people remained without care.
Risks of self-care: in the lack of secure financial markets people invested in property, stock, jewellery which are insecure in long term (because of wars, diseases etc.)
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
PENSION SYSTEM
Dominant Methods of Financing and Managing Pensions
Contributory scheme Non-contributory scheme: for those who cannot pay
contribution (e.g.: housewife, armed forces employee)Pay-as-you-go Fully funded
State (or social
security fund) managed
Hungary, Germany, France,
Singapore
Singapore (for armed forces and some gov. employees)
New Zealand (minimum sum scheme for all citizens)
Market (or company)
managedGM, Ford USA
These are just „guide-lines”, each system is a kind of mixedLaszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
Financing
Managing
Pay-as-you-goPolitical riskAdministrative costs: 1,5% of contributions
Fully fundedMarket riskAdministrative costs (incl. capital adequacy, profit): 5-6%
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
PENSION SYSTEMFinancing: pros and cons
Three pillars of pay-as-you-go pension systems
Compulsory pay-as-you-go
Compulsory funded
Supplementary funded
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
Age tree in HungaryMen Women
DisabilityOld AgeLost Relatives
Age tree of pensioners in Hungary
Men Women
Current challenges and answers in the PAYG systems
Aging society: more pensioners less workers
Point system: to keep the contributions=benefits equation governments define pensions according to the contributions. Contributors are credited by points according to their contribution and will receive their pensions later according to the points collected. (Sweden, Poland)
Healthcare,the game of asymmetry
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
What makes you healthy?!
Quality of healthcare service Environmental factorsGenetic and biological makings Lifestyle
Features of healthcare as a restricted market
Health is a unical good (one would give any money for being healthy once gets ill)
Imperfect competition
Supply-oriented market (information asymmetry)
High inflation (in comparison with other markets) because of innovations in diagnostics and therapy
Service is usually paid in advance
The weird triangle of Financing sources, Providers and Clients
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
The TriangleHEALTHCARE
Insurance
Service
Money (direct)
Money
(social security contribution,
tax, insurance fee)
Applicati
on
Money
(vario
us te
chniq
ues o
f
finan
cing p
rovid
ers
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
CLIENT (consumer)
Healthcare Service PROVIDER
Third Party (FINANCER)
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
Financing methods in healthcare
Public financing Private financing
Social security system
Central budget
Private insurance
MSAOut-of-pocket
payments
Third-party payment type Direct and private
Health Care Systems HEALTHCARE
Dominant feature of financingDominant ownership of
providers Country examples
Public Financing (social security system and/or central budget)
Public ownership Sweden, Norway, UK
Public Financing Mixed ownership (public and private)
Germany, France
Mixed Financing(public and private financing
with similar weights)
Private Ownership USA, the Netherlands
Mixed Financing(public and private)
Mixed Ownership Singapore
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
40
50
60
70
80
Hea
lthy
life
expe
ctan
cy (y
ears
)
Facts and figures
Singapore Australia Canada France Germany Japan UK USA Hungary
Total expenditures on health (%GDP)GDP/capita
Healthy life expectancy (years)
16%
14%
12%
10%
8%
6%
4%
2%
0%
source: WHO, 2002; CIA World Fact Book, 2005
40e $
30e $
15e $
TEH: Total Expenditure on Health
PEH: Public Expenditure on Health
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
2002
TEH (%) PEH (%) PEH/TEH (%)
Australia 9.1 6.2 67.7
France 10 7.8 78.1
Germany 10.6 8.4 79.3
Hungary 7.7 5.4 70.2
Japan 7.9 6.4 81.5
Korea 5.3 2.7 50.6
Mexico 6.2 2.7 43.9
Netherlands 8.9 5.6 62.5
Spain 7.3 5.2 71.3
Sweden 9.1 7.7 85.1
Switzerland 11.1 6.7 54.9
UK 7.7 6.4 83.4
USA 14.6 6.6 44.8
Singapore 3.7 0.9 24
WHO healthcare rankings1 France
2 Italy
3 San Marino
4 Andorra
5 Malta
6 Singapore
7 Spain
8 Oman
9 Austria
10 Japan
11 Norway
12 Portugal
13 Monaco
14 Greece
15 Iceland
16 Luxembourg
17 Netherlands
18 United Kingdom
19 Ireland
20 Switzerland
21 Belgium
22 Colombia
23 Sweden
24 Cyprus
25 Germany
26 Saudi Arabia
27 United Arab Emirates
28 Israel
29 Morocco
30 Canada
31 Finland
32 Australia
33 Chile
34 Denmark
35 Dominica
36 Costa Rica
37 United States of America
38 Slovenia
39 Cuba
40 Brunei
41 New Zealand
42 Bahrain
43 Croatia
44 Qatar
45 Kuwait
46 Barbados
47 Thailand
48 Czech Republic
49 Malaysia
50 Poland
51 Dominican Republic
52 Tunisia
53 Jamaica
54 Venezuela
55 Albania
56 Seychelles
57 Paraguay
58 South Korea
59 Senegal
60 Philippines
61 Mexico
62 Slovakia
63 Egypt
64 Kazakhstan
65 Uruguay
66 Hungary
67 Trinidad and Tobago
68 Saint Lucia
69 Belize
70 Turkey
71 Nicaragua
72 Belarus
73 Lithuania
74 Saint Vincent and the Grenadines
75 Argentina
76 Sri Lanka
77 Estonia
78 Guatemala
79 Ukraine
80 Solomon Islands
81 Algeria
82 Palau
83 Jordan
84 Mauritius
85 Grenada
86 Antigua and Barbuda
87 Libya
88 Bangladesh
89 Macedonia
90 Bosnia-Herzegovina
91 Lebanon
92 Indonesia
93 Iran
94 Bahamas
95 Panama
96 Fiji
97 Benin
98 Nauru
99 Romania
100 Saint Kitts and Nevis
101 Moldova
102 Bulgaria
103 Iraq
104 Armenia
105 Latvia
106 Yugoslavia
107 Cook Islands
108 Syria
109 Azerbaijan
110 Suriname
111 Ecuador
112 India
113 Cape Verde
114 Georgia
115 El Salvador
116 Tonga
117 Uzbekistan
118 Comoros
119 Samoa
120 Yemen
121 Niue
122 Pakistan
123 Micronesia
124 Bhutan
125 Brazil
126 Bolivia
127 Vanuatu
128 Guyana
129 Peru
130 Russia
131 Honduras
132 Burkina Faso
133 Sao Tome and Principe
134 Sudan
135 Ghana
136 Tuvalu
137 Ivory Coast
138 Haiti
139 Gabon
140 Kenya
141 Marshall Islands
142 Kiribati
143 Burundi
144 China
145 Mongolia
146 Gambia
147 Maldives
148 Papua New Guinea
149 Uganda
150 Nepal
151 Kyrgystan
152 Togo
153 Turkmenistan
154 Tajikistan
155 Zimbabwe
156 Tanzania
157 Djibouti
158 Eritrea
159 Madagascar
160 Vietnam
161 Guinea
162 Mauritania
163 Mali
164 Cameroon
165 Laos
166 Congo
167 North Korea
168 Namibia
169 Botswana
170 Niger
171 Equatorial Guinea
172 Rwanda
173 Afghanistan
174 Cambodia
175 South Africa
176 Guinea-Bissau
177 Swaziland
178 Chad
179 Somalia
180 Ethiopia
181 Angola
182 Zambia
183 Lesotho
184 Mozambique
185 Malawi
186 Liberia
187 Nigeria
188 Democratic Republic of the Congo
189 Central African Republic
190 Myanmar
Text
http://www.photius.com/rankings/healthranks.html
EducationTwo GOALS:
1. raise HUMANS (for themselves) and for the society
2. educate “RESOURCES” for the economy
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
Education
Meritocratic or egalitarian?
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/
Education
Ability developmental or factual knowledge driven?
Laszlo Gyorgy, gyorgy@finance.bme.hu - http://mono.eik.bme.hu/~gyorgy/