Holzmann, Robert

Person:
Holzmann, Robert

Fields of Specialization

Public Finance, Pension Strategy

Last updated February 1, 2023

Biography

Robert Holzmann is elected fellow of Austrian Academy of Sciences and as of September 2019 governor of the Austrian Central Bank. He held academic positions in Austria, Australia, Germany and Malaysia, senior economist positions at OECD and IMF, and senior management positions at the World Bank where he was leading the pension strategy work. He has published 37 books and some 200 articles on financial, fiscal and social policy issues. He has travelled to over 90 countries in the world.

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Now showing 1 - 10 of 34

Financial Capability in Low- and Middle-Income Countries : Measurement and Evaluation

(World Bank, Washington, DC, 2013-06) Holzmann, Robert ; Mulaj, Florentina ; Perotti, Valeria

This report provides an overview of the conceptual foundations and work program implemented by the World Bank under the Russia Financial Literacy and Education Trust Fund (RTF) generously supported by the Ministry of Finance of the Russian Federation beginning in October 2008. The overall objective of the Trust Fund was to support implementation of the December 2006 summit statement from the Russian G8 Presidency, which greatly advanced the topic of financial literacy and education within the international policy discussion. The specific objective of the overall effort was to extend the knowledge base to help Low-Income Country's (LICs) and Middle-Income Country's (MICs) prepare and implement national strategies and programs in this area. This report positions the results of the RTF work program undertaken by the World Bank within the broader realm of international knowledge activities. It highlights the contributions of this work program to the conceptual development and measurement of financial capability and the evaluation of the results achieved by programs directed towards its enhancement. The elements of the work program led by the World Bank focused on two measurement-related topics: 1) how to measure financial capability in a way that is applicable to diverse levels of economic development and across individuals of different income levels; and 2) how to measure the effectiveness of interventions to improve financial capability including, but extending well beyond, formal financial education programs.
Demographic Alternatives for Aging Industrial Countries : Increased Total Fertility Rate, Labor Force Participation, or Immigration

(World Bank, Washington, DC, 2005-12) Holzmann, Robert

The paper investigates the demographic alternatives for dealing with the projected population aging and low or negative growth of the population and labor force in the North. Without further immigration, the total labor force in Europe and Russia, the high-income countries of East Asia and the Pacific, China, and, to a lesser extent, North America is projected to be reduced by 29 million by 2025 and by 244 million by 2050. In contrast, the labor force in the South is projected to add some 1.55 billion, predominantly in South and Central Asia and in Sub-Saharan Africa. The demographic policy scenarios to deal with the projected shrinking of the labor forth in the North include moving the total fertility rate back to replacement levels, increasing labor force participation of the existing population through a variety of measures, and filling the demographic gaps through enhanced immigration. The estimations indicate that each of these policy scenarios may partially or even fully compensate for the projected labor force gap by 2050. But a review of the policy measures to make these demographic scenarios happen also suggests that governments may not be able to initiate or accommodate the required change.
Old-Age Financial Protection in Malaysia : Challenges and Pptions

(World Bank Group, Washington, DC, 2014-11) Holzmann, Robert

This policy paper presents key findings and suggestions on Malaysia s old-age financial protection system within the context of the country s broader social security framework. The trademark policy approach focusing on job creation instead of expanding social security programs served the country well to move it quickly to a high-middle income level. But to join the club of high-income countries in a sustainable manner may require the country to review its approach to social security, including the way old-age income support is provided, and to address the main current weaknesses: fragmentation across economic sectors, lack of an enabling political environment, incomplete benefit coverage, low mandated savings level, and inadequate disbursement options given the challenges of projected population aging and socioeconomic shifts. To address the old-age financial protection challenge, the paper outlines two key options for Malaysia's employees provident fund, the country's central pension pillar: (i) moving from a mere retirement savings investment fund to a fully-fledged pension fund that offers some minimum annuities; or (ii) more radically, moving the benefits toward a non-financial defined contribution scheme with the fund s resources used as its major reserve fund. Whatever approach is considered, the reform discourse will benefit from changes in the overall governance structure of social security and from a comprehensive research agenda that offers an evidence based decision making.
Aging Population, Pension Funds, and Financial Markets : Regional Perspectives and Global Challenges for Central, Eastern, and Southern Europe

(World Bank, 2009) Holzmann, Robert

Population aging is a worldwide phenomenon, but it is particularly advanced in highly developed northern countries. The retirement of the baby-boom generation in these rich countries will impose additional, albeit temporary, pressure on their pension systems. To cope with this pressure, reforms have been introduced that have lessened the generosity of publicly provided pension benefits. By design and by implication, this change increases the importance of mandatory and voluntary funded retirement schemes in smoothing consumption across the life cycle. The first three chapters of this book investigate questions germane to pension systems in the Central, Eastern, and Southern Europe (CESE) economies: the extent to which pension systems were prepared to deal with multi pillar pension reform, how to foster the development of financial systems so that they can better support funded systems, and how ready the systems are for the approaching payout of benefits as the first participants in the funded pillar approach retirement age. The remaining three chapters investigate broader questions facing pension systems in both developed and emerging countries: the capacity of the financial markets to deliver sufficiently high net rates of return, the benefits and disadvantages of investment in emerging markets, and the effect of aging on the rates of return afforded by funded and unfunded schemes.
Adequacy of Retirement Income after Pension Reforms in Central, Eastern, and Southern Europe : Eight Country Studies

(World Bank, 2009) Holzmann, Robert ; Guven, Ufuk

All of the former transition economies in Central, Eastern, and Southern Europe (CESE) inherited from the era of central planning traditional defined-benefit pension systems financed on a pay-as-you-go basis. Like many pay-as-you-go public pension systems elsewhere in the world, CESE pension systems were in need of reforms to address short-term fiscal imbalances and longer-term issues relating to population aging. Reforms were also needed to adjust benefit and contribution structures to meet the challenges of-as well as to take advantage of opportunities relating to the transition to a market economy, including the widespread adoption of multiplier designs with improved risk-sharing across funded and unfunded pillars. By 2006, most countries in Europe and Central Asia had introduced a voluntary private pension scheme. By 2008, 14 countries roughly half of all countries in the region had legislated mandatory private pension schemes, and all but one of those schemes (the one in Ukraine) had been introduced. These reforms shared a number of common objectives, in particular putting the systems on a sounder financial footing and better aligning them with the (very different) incentives of a market economy. This report is organized as follows. The first section discusses the motivation for reform across the eight countries included in the study against the backdrop of the regional (and global) trend toward multiplier pension arrangements. The second section summarizes the key provisions of the reformed systems in the eight countries within the World Bank's five-pillar framework for pension system design. The third section summarizes pension system performance against the two crucially important dimensions of adequacy and sustainability. The last section provides some policy recommendations for addressing gaps in reforms and taking advantage of further opportunities.
Pension Reform in Southeastern Europe : Linking to Labor and Financial Market Reforms

(World Bank, 2009) Holzmann, Robert ; MacKellar, Landis ; Repansek, Jana

The reform of public pension systems and, more generally, the review of old-age income support are on the reform agenda worldwide. The reform discussion is more intense in countries where population aging is well advanced, including the member countries of the Organization for Economic Co-operation and Development (OECD), much of Latin America, China, Russia, and the former transition economies of Southeastern Europe (SEE). But developing countries in the global South are also awakening to the challenges of aging and old-age income support in view of changing family structures, urbanization, and migration. Over 80 percent of the increase in the numbers of persons age 65 and older up to 2050 will take place in countries with current per capita incomes of US$1,000 and below. Whereas the North grew rich before becoming old, the South risks becoming old before becoming rich. The remainder of the chapter attempts to substantiate this point. The next section briefly describes aging and its fiscal implications in the light of demographic developments in the countries of Southeastern Europe. There follows an outline of the drivers of pension reform that go beyond population aging and have to be understood when choosing among reform options. Subsequent sections take up recent international reform trends and lessons and underline key points concerning the labor market and financial market reforms needed to support pension reform. The chapter ends with some concluding remarks.
Reforming Severance Pay : An International Perspective

(World Bank, 2012) Holzmann, Robert ; Vodopivec, Milan

Throughout the developed and developing world there is growing demand for policies that would facilitate access to jobs by the most vulnerable, improve their earnings, and reduce their dependency on public support. As a result, governments are increasingly focused on removing obstacles faced by employers to create jobs and on instilling incentives for individuals to re-enter the labor market or to move toward more productive employment possibilities. Severance pay a program compensating formal workers for dismissal by employers or with an end-of-service benefit is often blamed for distorting employer hiring and firing decisions. Together with restrictive labor market regulations and other formal labor market features, this program is held responsible for excessive job protection with a negative impact on labor market outcomes, in particular affecting the most vulnerable. Despite this strong negative assessment among many labor market economists, surprisingly little is known about this program that exists in most countries around the world as a legally mandated benefit. This lack of knowledge may derive from the special 'positioning' of the program between labor code and social insurance; its origins were in the first policy domain, but its objectives for key programs were replicated in the second domain in particular unemployment and retirement benefits. This is the first-ever book to shed light on this program in a comprehensive manner its historical origins, its rationale, and its characteristics across the world. It reviews the soundness of the empirical accusation, assesses recent country reforms, and offers policy reform alternatives and policy guidance. The policy directions include folding severance pay into existing social insurance programs, where they exist, and to make severance pay contractual between market partners as a way to enhance efficiency in a knowledge-based economy. Folding severance pay into employment benefits may also be an opportunity to move away from unemployment insurance, which is fraught by moral hazard, toward a promising 'hybrid' system of unemployment insurance savings accounts supplemented by social pooling.
Closing the Coverage Gap : The Role of Social Pensions and Other Retirement Income Transfers

(World Bank, 2009) Holzmann, Robert ; Robalino, David A. ; Takayama, Noriyuki

The book has four specific objectives: (a) to discuss the role of retirement income transfers in the context of a strategy for expanding old- age income security and preventing poverty among the elderly; (b) to take stock of international experience with the design and implementation of these programs; (c) to identify key policy issues that need to receive attention during the design and implementation phases; and (d) to offer some preliminary policy recommendations and propose next steps. The chapter one discusses the rationale for retirement income transfers. The main justifications are the limited coverage of the mandatory pension systems (chapter two) and the risk of poverty during old age (chapter three). Chapter four then examines the rights, based approach to expansion of social security coverage based on the conventions and recommendations of the International Labor Organization (ILO). The middle part of the book deals with international experience. Chapters five, six, and seven reviews selected programs in low-income, middle-income, and high-income countries, respectively, and chapters eight and nine discuss in greater depth the cases of Japan and the Republic of Korea. The five concluding chapters are concerned with policy issues as related to design. Chapter ten presents a typology of retirement income transfers and analyzes the potential economic impacts of the programs. Chapter eleven deals with financing mechanisms and the problem of allocative efficiency, given limited resources. Chapter twelve addresses two key issues related to institutional arrangements and targeting systems: Should countries consider separate programs to target the elderly poor instead of using the general social assistance system to target all poor? And, how can current proxy means-test systems be adapted to target the elderly poor? Chapter thirteen explores in more detail the links between social pensions and matching contributions in the context of a general strategy for expanding coverage. Finally, chapter fourteen provides guidelines for the design of the administrative systems needed to operationalize the various programs. The remainder of this overview summarizes the main messages from the subsequent chapters and outlines an agenda for future research and policy analysis. For clarity, it starts by presenting some definitions pertinent to the retirement income transfers discussed in the book.
The ABCs of NDCs

(World Bank, Washington, DC, 2019-04) Holzmann, Robert

Nonfinancial defined contribution (NDC) pension schemes have been successfully implemented since the mid-1990s in a number of European countries. The NDC approach features the lifelong contribution–benefit link of a financial defined contribution scheme, but is based on the pay-as-you-go format. An NDC approach implemented by the rulebook can manage the economic and demographic risks inherent to a pension scheme and by design creates financial sustainability. This paper offers a nontechnical introduction to NDC schemes, their basic elements and advantages over nonfinancial defined benefit schemes, the key technical frontiers of the approach, and the experiences of countries with NDC schemes.
Social Protection and Labor at the World Bank, 2000-08

(Washington, DC : World Bank, 2009) Holzmann, Robert

In autumn 2000, the World Bank's board approved the first ever strategy for the new social protection and labor sector, and in January 2001, the sector published the strategy. The subtitle, from safety net to springboard, indicated the World Bank's move toward a broader understanding of poverty reduction and the relationship of risk to poverty. Because risks and access to appropriate risk management instruments matter for poverty reduction and development, the strategy proposed a new conceptual framework - social risk management that will review and reform existing interventions and propose new ones to better assist the vulnerable in addressing the many risks to which they are exposed. After seven years of implementation, it was time to review the strategy and work of the areas of selected core competence: labor market, social insurance (in particular pensions), social safety nets, social funds, disability and development, and risk and vulnerability analysis. The strategic position, its development, and the results by the sector since the launch of its strategy were reviewed and presented to the World Bank's committee on development effectiveness at the end of 2007. The review included a stocktaking of the analytical work and lending operations in each of the six core competence areas. The result of this review and the six stocktaking papers are presented in this publication. They reveal the progress that the World Bank has made in understanding the importance of social risk management for poverty reduction and the critical contribution it makes to equitable and sustainable growth.