Brazil fiscal and welfare spending demands will clash

Significance The economy is at a crossroads: high unemployment and increasing poverty are generating pressures for greater income transfers, but the delicate fiscal position is generating concern about long-term fiscal sustainability. Rising inflation has generated temporary fiscal relief, but for the coming years fiscal indicators are expected to worsen. Impacts Conflicting pressures between welfare spending and long-term fiscal equilibrium will worsen in coming months. The implementation of ‘populist’ policies for purely political purposes may prove unsustainable. Uncertainty about fiscal issues will contribute to deteriorating perceptions about the future of the economy.

The Comparation of Foreign Financial Investment and Human Investment Effect on Economic in Indonesia Base on Macro Economic Point of View

The purpose of this study is to compare the impact of the direction of the relationship between education and health investment with economic growth in Indonesia, with the impact and direction of the relationship of foreign direct investment and portfolio investment with economic growth in Indonesia. This study uses a quantitative method using the Threshold Autoregressive model. This study uses secondary data from the world bank in the annual time period from 2000 to 2019. We found that Investment in education and health has an impact on increasing productivity which drives economic growth because labor productivity directly drives the real sector. However, FDI and FPI changed the financial position in terms of capital. Direct investment increases real capital which has an impact on the creation of new sources of economic production but has consequences in the form of income transfers abroad, resulting in cash outflows. The existence of these foreign transfers continuously when economic conditions are stable and the real sector grows and generates profits that can be greater than the cash inflows obtained when foreign direct investments are made.

Work Accident and Sickness Benefits

This entry traces past and present trends in the institutional development of income transfers in the case of work accident and sickness. The focus is mainly on OECD or European countries, but in some instances, references are made to a wider array of countries or continents. The entry begins with a review of the history of work accident insurance; in most countries, this was the first social insurance programme to be created. The history of this early programme highlights a number of factors behind the development of later programmes. The latter part of the entry focuses on sickness insurance. Again, we begin with historical developments, focusing in particular on the universalism and generosity of benefits. We then move on to discuss the extent to which sickness benefits have, in recent years, been targets for retrenchment. The final section tentatively discusses future trajectories of these two income maintenance programmes.

Welfare implications of mitigating investment uncertainty

This study explores the welfare implications of mitigating investment uncertainty in the context of Easley and O’Hara (Rev Financ Stud 22:1817–1843, 2009) While one may expect welfare gains by encouraging participation in financial markets by ambiguity-averse investors, we formally show that it hurts other investors and thus is not Pareto-improving without appropriate income transfers. We also examine the welfare effects of income redistribution among heterogeneous investors and government spending on investor education.

The conditional altruist and the Samaritan’s dilemma

The Samaritan’s dilemma refers to any situation in which an actual or expected altruistic behavior of one actor generates an incentive for exploitation on the recipient, such that the altruist suffers a welfare loss beyond the cost of the originally intended transfer. This study hypothesized that the Samaritan’s dilemma condition does (not) apply when the help given is a substitute for (complement to) the effort of the beneficiary to help herself. Using static and sequential game analyses, it is proven that either substitution or complementary condition could arise in the act of giving and receiving help. It is in the substitution condition only that the Samaritan dilemma arises. The players in a sequential game, with the first-mover advantage, can transform the game’s payoffs by setting assistance or work effort at the outset that forces the other player to adjust. Thus, Buchanan’s Samaritan’s dilemma is not a universally strategic outcome in the altruistic acts of giving. The empirical part tested if the Samaritan’s dilemma pervades or not in Philippine households by investigating the effects of expenditures of gifts on work hours. Household total transfers (consumption gifts plus remittances) and household members’ work effort are found substitutes. Thus, the Samaritan’s dilemma equilibrium is implied. However, there is also an implied equilibrium outside that of the Samaritan’s dilemma among high-effort workers: for these theoretically "altruist" workers, the gifts and income transfers are complementary to work hours.

How Does Mortality Contribute to Lifetime Pension Inequality? Evidence From Five Decades of Swedish Taxation Data

As with many social transfer schemes, pension systems around the world are often progressive: individuals with lower incomes receive a higher percentage of their income as a subsequent pension. On the other hand, it is well known that those with lower earnings have higher mortality and thus accumulate fewer years of pension income. These opposite factors, therefore, both contribute to the progressiveness of a given pension system. Thus far, empirical research efforts to disentangle the effects of mortality inequality on lifetime pension income have been scarce. To close this gap, we use Swedish taxation data linked with death registers from 1970 to 2018 to study how education and pre-retirement earnings relate to lifetime pension income from age 60 onwards, as well as how inequalities in mortality between groups contribute to overall inequalities in lifetime pension income. The results show that both a progressive replacement structure and mortality differentials contribute to the overall distribution of life-course pension payments. A substantial proportion of the total inequality in lifetime pensions can be attributed to the fact that socially advantaged groups live longer, and this is particularly true for men. Mortality differences can explain up to 28% of the lifetime pension benefits between socioeconomic groups. We conclude that inequalities in mortality play an important part in determining the overall degree of between-group income transfers in a pension system.

Evaluation of producer inflation, subsidies and profitability of vegetables and grains in Sinaloa, 2018-2019

Objective: To evaluate producer inflation, equity in PROCAMPO subsidy distribution, as well as profitability of eight agricultural products in the state of Sinaloa, 2018-2019 cycle.Design/Methodology/Approach: First, inflation is estimated in the value of agricultural production, using the agricultural producer price index (INPP) base 2019. Second, the inequality in the allocation of PROCAMPO is calculated with Lorenz curves. Third, the internal rate of return (IRR) is estimated for the eight products and compared with the 28-day yield of the treasury certificates (CETES).Results: The current values generated show growth in cereals (corn, wheat), and vegetables (tomato, chili peppers), with downward inflationary gaps in the period 2000-2019. There is a concentration of the PROCAMPO allocation in producerswith high income deciles. The IRR is high in vegetables, and low in corn and beans.Study Limitations/Implications: This study does not specify the size of the productive unit and only the data is generalized. It does not address marketing channels and their destinations.Findings/Conclusions: The producer is assuming the inflationary increase. Income transfers via PROCAMPO areinequitable. The IRR in corn and beans is sometimes less profitable than CETES.

External balance sheets of emerging economies: low-yielding assets, high-yielding liabilities

The new millennium has witnessed a rapid expansion of external balance sheets and significant changes in the capital, currency and sectoral compositions of foreign assets and liabilities of emerging economies. These have created new channels of transmission of global financial shocks and amplified the susceptibility of the value of their outstanding stocks of gross foreign assets and liabilities to global financial conditions, leading to sizeable wealth transfers between emerging and advanced economies. They have also resulted in significant income transfers in view of negative yield differentials between their gross external assets and liabilities. Altogether, such transfers to advanced economies are estimated to have reached 2.3 per cent of the combined GDP of the G20 emerging economies per annum during 2000–2016.

Community Money COMMON. The Alternative to Universal Basic Income

The paper outlines the institutional innovation of ›Community Money‹ COMMON, a securitized claim on a monthly income transfer that can also be used as a tax allowance in an up to 100 percent inheritance tax. It can be accumulated on a special citizens’ account and is a substitute for all other kinds of public income transfers such as pensions and unemployment benefits. COMMON can also be voluntarily earned in community work. COMMON liberates citizens from the compulsory participation in the capitalist market economy.