Mathematical Methods in Economy and Industry
15.9.-19.9.2021
Abstract:
Effects of immigration on public finances
Tomas Domonkos
We estimated the fiscal effects of migration in Slovakia. The methodology employed is the Generational account disaggregated with respect to native and foreign population. Additionally, we consider in the model gender and the level of education as well. We present the static as well as the long-term dynamic approach. Demographic projections used are disaggregated to migrants and to natives. The projections are from 2018 to 2200. We test five alternative scenarios i) no migration from 2018; ii) most likely migration scenario; iii) high migration scenario; iv) all foreigner in the country have high level of education; v) all foreigner in the country have low level of education. The results showed that foreigners have slightly lower net taxes then the natives. However, thanks to a younger age distribution of the foreign population one foreigner contributes on average more to the public purse than one native does on average. We furthermore showed that migration can have positive fiscal impact, however, the age distribution and the educational structure of the foreign population along the number of foreigners are among the key parameters. On the aggregate level, the total effects seem to be rather small compared to the overall long-term fiscal imbalance caused by ageing in Slovakia.
Implementation of the child factor in the old-age pension system
Tatiana Jašurková
Due to the unfavorable demographic situation, marked by an aging population and low fertility rates, countries with established pay-as-you-go pension systems face a problem with the sustainability of such defined systems. Since pension systems with static parameters do not reflect the development of exogenous variables on which the system is financially dependent, it is not possible to expect the stability of such systems. This creates the need to modify pay-as-you-go pension systems to ensure equivalent and long-term sustainable pension systems. The same applies to the pension system of the Slovak Republic. Recent legislative changes in the old-age pension system introduce the principle of fairness in the care of children, i.e. if someone does not work because he is taking care of a child, it must not have a negative impact on his pension. It also incorporates the possibility of intergenerational solidarity from children to their parents. In that matter, the new constitutional law of the old-age pension system in Slovakia introduces the idea of a parental bonus into the pension system. Therefore, in this paper we will focus on the study of the connection between the pension system and fertility, and the possibilities of adjusting the pension model in favor of fertility growth, taking into account the aforementioned parental bonus.
Parental bonus in Slovak pension system – fiscal and redistributive impacts
Ján Šebo, Daniela Danková, Ivan Králik
Slovak pension system is due to the major reform in 2021 where one of the flag ships is the parental bonus introduction. Several countries have experimented with the fertility driven policies within the pension system. Some of them has introduced bonus/malus system on pension contributions and some has introduced contribution sharing to mitigate the risk of lower pensions for child-caring persons during their economic life. Slovakia has decided to interconnect the system of contributors and pension beneficiaries directly by redirecting part of the paid pension contributions on the account of pensioner as a tool of intergenerational altruism and transfers. The paper presents some initial insights on how the parental bonus is created and what fiscal and redistributive impacts can be expected. Using the microsimulation model of pension system, we extend the model by adding intergenerational connections among individuals and study the effects of the parental bonus on overall fiscal stability of PAYG scheme as well as the distribution of retirement income of retirees before and after the bonus is introduced.
Different ways of using second pillar savings in Slovakia
Igor Melicherčík, Gábor Szűcs
Recently, first pensions have been paid from the savings corresponding to the second pillar of the pension system in Slovakia. The talk emphasizes that the advantage of the second pillar cannot be assessed solely using the level of pensions paid. Its strength lies in the number of alternatives it offers. Based on calculations, we have analysed benefits of various alternatives in different circumstances. At present, the need for a long-term care in the case of dependency is a common problem. Most pensioners do not have means to cover the associated costs. We present our own model of the long-term care insurance as well as the replacement rate it could provide.