Publication: A Simulation of an Income Contingent Tuition Scheme in a Transition Economy
Abstract
The paper takes advantage of exceptionally rich longitudinal data on the universe of labor force participants in Slovenia and simulates the working of an income contingent loan scheme that seeks to recover part of schooling costs. The simulations show that under the base variant (where the target cost recovery rate is 20% and the contribution rate is 2%), 55% of individuals would have repaid their entire debt within 20 years; 19% of individuals still would not have repaid any of their debt after 20 years; and the "leakage" of the scheme due to uncollected debt would have been 13.5% of total lending. By piggybacking on existing administrative systems, implementation costs would be minimal, amounting to less than 0.5% of collected debt.
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Publication Choosing a System of Unemployment Income Support : Guidelines for Developing and Transition Countries(Oxford University Press on behalf of the World Bank, 2006-02-14)Mounting evidence suggests that excessive job protection reduces employment and labor market flows, hinders technological innovations, pushes workers into the informal sector, and hurts vulnerable groups by depriving them of job opportunities. Flexible labor markets stimulate job creation, investment, and growth, but they create job insecurity and displace some workers. How can the costs of such insecurity and displacements be minimized while ensuring that the labor market remains flexible? Each of the main unemployment income support systems (unemployment insurance, unemployment assistance, unemployment insurance savings accounts, severance pay, and public works) has strengths and weaknesses. Country-specific conditions, chief among them labor market and other institutions, the capacity to administer each type of system, and the size of the informal sector, determine which system is best suited to developing and transition countries.Publication Unemployment Insurance Simulation Model (UISIM)(World Bank, Washington, DC, 2008-12)This note describes the key features of the Unemployment Insurance Simulation Model (UISIM) - how the model is structured, what data inputs are needed, and what outputs the model generates (the model comes with user's and technical manuals, which provide detailed information about how to operate the model and how it calculates the outputs). For illustrative purposes, the note also presents an example where the model is used to generate simulations for a countrywide unemployment insurance (UI) system. The appendix to the note describes typical data sources and provides a detailed description of requisite data.Publication How Viable Are Unemployment Insurance Savings Accounts? Simulation Results for Slovenia(2010)Applying a methodology similar to Feldstein and Altman (1998) to Slovenia's unemployment insurance (UI) system, the paper shows that unemployment insurance savings accounts (UISAs) are a viable alternative to a modest, but not generous, UI system. Under the modest regime, only one quarter of workers end their working life with a negative cumulative balance and 43% ever experience a negative UISA balance; in contrast, under the generous regime, 49% of workers end their working life with a negative cumulative balance and 66% ever experience a negative balance. The simulations also show that the level of redistribution under UISAs lags behind the redistribution implied by the UI system.Publication Simulating Welfare Impacts of Changes in the Monthly Social Allowance Scheme and Heating Allowances in Bulgaria(Washington, DC: World Bank, 2024-06-26)Bulgaria still ranks among the EU countries with the highest levels of poverty and inequality. Before 2023, Bulgaria's Social Assistance / Monthly Social Allowance scheme had limited coverage, strict eligibility criteria, and limited impact on poverty reduction. Additionally, it was not adjusted or linked to inflation. The Bulgarian government introduced a reform in 2022 aimed to increase the scope and access of individuals to social support by increasing the basis for determining the differentiated minimum income threshold (now 30 percent of the relative poverty line) and the parameters linked with age, health condition, and social status, affecting the social programs anchored to it, such as the Monthly Social Allowance and the heating allowance. This paper assesses this reform's potential ex-ante poverty and distributional impacts, relying on a comprehensive tax/benefit system assessment called the Commitment to Equity and microsimulation techniques. The changes in the legal basis for determining access to social assistance introduced with the reform are expected to create some relief from the indexation of the benefits over time. They will now be tied to the evolution of the relative poverty line and, therefore, linked to the evolution of median income. The results of the policy simulations show that the combined effect of the changes in the Monthly Social Allowance and the heating allowance contributes to a slight reduction in the poverty gap but not enough to move a sizable share of people out of poverty, as shown by the negligible impact on the at-risk-of-poverty rate. Inequality is barely affected. Compared with a Bulgarian food basket, the results show that eligibility thresholds are still restrictive. These results suggest further scope for improvement in the design of these programs, including anchoring them to an absolute poverty line or basic consumption basket.Publication Episodes of Unemployment Reduction in Rich, Middle-Income, and Transition Economies(World Bank, Washington, DC, 2014-05)This paper studies the incidence and determinants of episodes of drastic unemployment reduction, defined as swift, substantial, and sustained declines in unemployment. Forty-three episodes are identified over a period of nearly three decades in 94 rich, middle-income, and transition countries. Unemployment reductions often coincide with an acceleration of growth and an improvement in macroeconomic conditions. Episodes are much more prevalent in countries with higher levels of unemployment and, given unemployment, are more likely in countries with better regulation. An efficient legal system that enforces contracts expeditiously is particularly important for reducing unemployment. The results imply that while employment is largely related to the business cycle, better regulation reduces the likelihood of high unemployment and facilitates a more rapid recovery in the event unemployment builds up.
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