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Article
Publication date: 22 February 2021

Ishay Wolf and Jose Maria Caridad y Ocerin

This paper aims to analytically show that in an over-lapping-generation (OLG) model, low earning cohorts bear unwanted risk and absorb higher economic cost than high…

Abstract

Purpose

This paper aims to analytically show that in an over-lapping-generation (OLG) model, low earning cohorts bear unwanted risk and absorb higher economic cost than high earning cohorts do.

Design/methodology/approach

This paper aims to consider the individual's risk appetite, using a simple utility function, based on consumptions and discount rates in each period. This paper calibrates the model according to teh Israeli pension system as a representative of a small open developed organization for economic cooperation and development country. Israel is considered as unique case study in the pension landscape, as it implements almost pure defined contribution pension scheme with continuous trend of pension market capitalization (Giorno and Jacques, 2016). Hence, this study finds Israel suitable for examining the theoretical mix of pension scheme. That model enables exploring combined solutions for adequate old age benefits, involving the first and the second pension pillars, under fiscal constraints.

Findings

It comes out that for risk-averse individuals, the optimal degree of funding is negatively correlated to asset returns' volatility and positively correlated to earning decile level. The neglect of risk and individual's current earning level will thus overstate the contribution level and funded percentage from total contributions. Moreover, even in an economy with minimum government intervention, and highly developed private pension fund with high average of rate of return, the authors find it is optimal that the pension system contains a sizeable unfunded pillar. This paper innovates by revealing a socio-economic anomaly in design of mix pension systems in favor of high earning cohorts on the expense of economic loss of low earning cohorts.

Practical implications

The model presented in this paper could be implemented in countries with mix pension systems, as an alternative to public social transfers or means tested, alleviating poverty and inequality in old age. Additionally, this model could raise the public awareness of the financial sustainability of the unfunded pay-as-you-go pillar to diversify financial risk in pension systems, especially for low earning cohort in society.

Social implications

One area of research that is particularly relevant in this context concerns the issue of alleviating poverty and income inequality. It is often stressed that the prevention of old age poverty is among the central targets of well-designed pension system (Holzmann and Hinz, 2005). The conceptualization of minimum pension guarantee used in this composition allows to clearly capturing the notion of such a poverty and social targets as an integral part of the pension system rolls.

Originality/value

This paper innovates by revealing a socio-economic anomaly in design of mix pension systems in favor of high earning cohorts on the expense of economic loss of low earning cohorts. That comes to realize through the level of total contribution rates and funded share that are generally optimal for high earning cohorts but not for low earning cohorts. This paper identifies that the effect of anomaly is most significant in a market characterized with high income-inequality level. This paper finds that imposing intra-generational risk sharing instrument in the form of minimum pension guarantee can re-balance pension design among different earning cohorts. This solution demonstrates balancing effect on the entire economy.

Details

Journal of Financial Economic Policy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1757-6385

Keywords

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Book part
Publication date: 12 August 2014

Gil Richard Musolf

This is an interpretive study in the sociology of literature that explores Aeschylus’s trilogy of dramatic plays known as the Oresteia. The plays dramatize a normative…

Abstract

This is an interpretive study in the sociology of literature that explores Aeschylus’s trilogy of dramatic plays known as the Oresteia. The plays dramatize a normative argument that exemplifies the dialectical struggle between domination and democracy. Social relations are characterized by agon (struggle), domination, and contradictions brought about by learning through suffering. These social realities reflect the primary theoretical claim of radical interactionism (RI) that domination and conflict are profound, pervasive, and perennial. On the interpersonal level, the plays dramatize structure, agency, role-taking, and the Thomas Axiom. As the first drama to interrogate an inchoate polity as an object of the public’s gaze, the Oresteia anticipates the sociological importance of critical consciousness, collective decision-making, political institutions, moral and, ultimately, cultural transformation. Despite a social context of slavery, imperialism, xenophobia, ostracism, misogyny, exclusivity, and constant warfare, the Oresteia foreshadows Western civilization’s ideals of legal-rational domination, citizenship, human rights, persuasion, and justice that have been imperfectly institutionalized to reduce surplus domination. The West still struggles to realize those ideals.

Details

Revisiting Symbolic Interaction in Music Studies and New Interpretive Works
Type: Book
ISBN: 978-1-78350-838-9

Keywords

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Article
Publication date: 19 June 2019

Nahla Mahmoud Ahmed and Alia Abd el Hamid Aref

The purpose of this paper is to explain the issues and variables that influence the bureaucracy’s role and work in the transitional period, which is known with its…

Abstract

Purpose

The purpose of this paper is to explain the issues and variables that influence the bureaucracy’s role and work in the transitional period, which is known with its complexity, uncertainty, instability, ambiguity and asymmetry. This paper highlights the transition from theoretical perspective, giving examples from the Polish experience in transition.

Design/methodology/approach

This paper describes the changing roles of public bureaucracies in transitional periods by highlighting their ecology with the transitional period and analyzing the determinants of bureaucracy’s role and functions in terms of participation in policy-making policies, providing consultations to executives and elected officials, working as a mediator in communication and acting as an active participant in the development process giving examples from Poland. Finally, it highlights the way the bureaucracy manages its functions and the internal and external variables that constitute various levels affecting this role in the transition.

Findings

Bureaucracy is supposed to function naturally and stably in an unstable environment (transition) as its success in doing these functions and helping the new regime to exceed the transition and achieve its goals depends on many variables (bureaucracy capabilities and skills, history, power, experience, the nature of politics and bureaucratic functions, political support, policy environment, knowledge, cohesion, etc.). Most of these variables were demonstrative in the case of Poland.

Originality/value

This paper will be useful for scholars and policymakers interested in public administration role in the time of transition, especially countries that recently have been experiencing the transition.

Details

Review of Economics and Political Science, vol. 4 no. 2
Type: Research Article
ISSN: 2356-9980

Keywords

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