Abstract
This chapter presents micro-simulation results of the impact of a new social welfare law adopted in Serbia in 2010 on income distribution and poverty outcomes across households. Micro-simulations were conducted using a tax-benefit micro-simulation model for Serbia (SRMOD). The new law introduced a number of the changes to the eligibility criteria for the last-resort social assistance programme discussed in this chapter. These are expected to improve significantly the targeting of social assistance, both in terms of its expanded coverage and increases in the amounts of social assistance received by the already eligible households. Simulation results suggest that the changes in legislation would increase social assistance eligibility of households in the poorest income decile by 18.4 %. The average amount of the benefit would increase by about 10.6 % per adult equivalent. Finally, total fiscal expenditures on MOP would increase by 34.6 %.
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Notes
- 1.
These figures are based on a new methodology for poverty calculations from Household Budget Survey (HBS) which now calculates a nutritional basket for 2006 and adjusts it by consumer price index for each consecutive year.
- 2.
MOP stands for “materijalno obezbedjenje porodice” and translates into English as “material support for low-income households”.
- 3.
This chapter presents part of a larger research endeavour financed by the World Bank. FREN’s research team was commissioned by the bank to simulate the impact of the new social welfare law on income distribution and poverty outcomes before its adoption by the Serbian parliament. The law was adopted in March 2011.
- 4.
EUROMOD is the tax and benefit micro-simulation model for the European Union, developed and maintained by the micro-simulation unit of the Institute for Social and Economic Research (ISER), University of Essex. More details are available at http://www.iser.essex.ac.uk/research/euromod. For more details about SRMOD construction, see Žarković-Rakić (2010).
- 5.
For example, in the LSMS, the receipt of social assistance, unemployment benefit and maternity leave benefit is reported separately, whereas in the Household Budget Survey, there is only one question regarding the receipt of these three benefits.
- 6.
Decile groups are formed by ranking according to equalised household disposable income using the modified OECD equivalence scale and weighted by household size.
- 7.
We estimate the cost of claiming MOP at 1,000 RSD (Serbian national currency). See section “Issues of MOP Non-take-up and Overpayment” of this chapter for explanation.
- 8.
See Chap. 6 for a more detailed discussion on the original recipients of MOP from the LSMS database and their comparison to administrative records of the Ministry for Labour and Social Policy.
- 9.
Since the analysis undertaken here represents the theoretical maximum of the beneficiaries, i.e. non-take-up is not entirely accounted for, it is more relevant to observe the relative changes in the percentage of poor when new eligibility criteria are introduced, rather than the absolute numbers.
- 10.
Year of collection: 2007. Income reference period: 2007. Sample size: 17,375 individuals in 5,557 households.
- 11.
The ratio between the number of households which are not receiving the benefit but are eligible and the total number of households which are potentially eligible.
- 12.
The law on social welfare allows social worker to impute income from informal employment (in the lump sum amount) in the means test of an applicant if he/she suspects that applicant has incomes from unregistered activity.
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Arandarenko, M., Avlijas, S., Randjelovic, S., Vladisavljevic, M., Rakic, J.Z. (2013). Simulating Policy Reform: Distributional and Poverty Outcomes of the New Social Welfare Law in Serbia. In: Ruggeri Laderchi, C., Savastano, S. (eds) Poverty and Exclusion in the Western Balkans. Economic Studies in Inequality, Social Exclusion and Well-Being, vol 8. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-4945-4_15
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