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Who Gains and Who Loses from the National Insurance System in Israel A Financial Appraisal within and across Generations

Who Gains and Who Loses from the National Insurance System in Israel A Financial Appraisal within... A major objective of the Israeli Old Age and Survivors OASprogramme is focused on redistribution of income. The effects on incomedistribution within one generation and across generationsare studied. It was found that the programme is very effective. It takesmore than 4 per cent of the gross income of the more affluent people inthe sample and gives more than 16 per cent of income to the leastaffluent people. The programme discriminates against men because oftheir later retirement, higher income and lower survival probabilities.All these results are within one generation. For the intergenerationaltransfers, it was found that this generation pays more than it receivesfrom the programme. Interestingly, the reduction of National Insurancetax devoted to the Old Age and Survivors programme, from 5.4 per cent to3.3 per cent is the one suggested by the model. Unfortunately, it wasfound that increasing the intergenerational equality by reducing thetax rate lessens its effectiveness to bring equality within thegeneration. More research is needed before policy recommendations can bemade. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Social Economics Emerald Publishing

Who Gains and Who Loses from the National Insurance System in Israel A Financial Appraisal within and across Generations

Spivak, Avia
International Journal of Social Economics , Volume 17 (11): 22 – Nov 1, 1990
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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0306-8293
DOI
10.1108/03068299010140278
Publisher site
See Article on Publisher Site

Abstract

A major objective of the Israeli Old Age and Survivors OASprogramme is focused on redistribution of income. The effects on incomedistribution within one generation and across generationsare studied. It was found that the programme is very effective. It takesmore than 4 per cent of the gross income of the more affluent people inthe sample and gives more than 16 per cent of income to the leastaffluent people. The programme discriminates against men because oftheir later retirement, higher income and lower survival probabilities.All these results are within one generation. For the intergenerationaltransfers, it was found that this generation pays more than it receivesfrom the programme. Interestingly, the reduction of National Insurancetax devoted to the Old Age and Survivors programme, from 5.4 per cent to3.3 per cent is the one suggested by the model. Unfortunately, it wasfound that increasing the intergenerational equality by reducing thetax rate lessens its effectiveness to bring equality within thegeneration. More research is needed before policy recommendations can bemade.

Journal

International Journal of Social Economics – Emerald Publishing

Published: Nov 1, 1990

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