Abstract
Several papers presented at this conference have emphasized the role of social security in redistributing resources from the more affluent to the poor. Professor Dillemans, Dr. Himenez and many others have also pointed out to the high priority of achieving full coverage in our social security systems. This paper focuses on both these aspects of social security: coverage and redistributive potential. As an economist I will limit myself to the problem of financing, attempting to analyze the potentials of voluntary and obligatory schemes in achieving full coverage and its serving effectively as one vehicle by which society can redistribute income.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
The pension schemes which complement the old age pension are income related and organized according to occupation sectors.
Data are based on a survey conducted by R. Roter and A. Doron in 1971 within the framework of the following study: Supplementary Benefits to low wages paid through employers, Draft of final report, Jerusalem, December 1974. It is based on a multistage probability sample of 1000 employers and 32 500 wage-earners.
Enterprises owned by the Histadrut — the General Federation of Labor in Israel.
In some sense health insurance may also be considered an investment: an investment in human capital. See S. Mushkin, ‘Health as an Investment’, J.P.E., October 1965.
For detailed description of Israel’s complementary pension funds see: M. Benenson’s Summary on Israel in ‘Complementary Pension Institutes of Complementary Pension Schemes’, ISSA, Studies and Research. No. 3, Actuarial Series, Geneva, 1973.
There is also a greater accumulation of interest on his contributions. However, since the starting pension is calculated according to the last wage and is then linked to changes in wages we can reasonably ignore the interest component in our calculations. By ignoring interest we assume that the rate of interest equals the rate of wage increase, so that the contributions accumulate at the same rate as the insured person’s wage. This means a zero interest rate in terms of wages.
Data are based on special tabulations of the Bureau of Research and Planning of the National Insurance Institute, using the ‘Family Expenditure Survey’, 1969. For a detailed description of survey methods see the Central Bureau of Statistics, ‘Family Expenditure Survey’, 1968–9, special publication No. 330.
Economic income includes income from work (including self-employment) and returns from capital, before direct taxes and transfer payments from the government sector.
In order to compare the income levels of different-sized families we used an equivalence scale for standardizing income. For a description of the scale and its limitations see J. Habib and Y. Tawil, ‘Equivalence Scale for Family Size: Findings from Israel Data’. Discussion paper 1. Bureau of Research and Planning, National Insurance Institute, Israel, 1974.
In the U.K. until recently flat rate pensions were actually financed by a flat-rate tax, but this was changed to a proportional tax.
Y. Tawil, Reform in Social Security Tax, Discussion paper 6, Bureau of Research and Planning, National Insurance Institute, Jerusalem, Israel, 1974 (Hebrew only).
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 1977 Springer Science+Business Media Dordrecht
About this chapter
Cite this chapter
Roter, R. (1977). The redistributive potential of voluntary and obligatory insurance schemes. In: Social security and medical care. Springer, Boston, MA. https://doi.org/10.1007/978-1-4899-3774-2_16
Download citation
DOI: https://doi.org/10.1007/978-1-4899-3774-2_16
Publisher Name: Springer, Boston, MA
Print ISBN: 978-90-312-0058-0
Online ISBN: 978-1-4899-3774-2
eBook Packages: Springer Book Archive