1 / 27

2013 EUROMOD Research Workshop University of Lisbon, Portugal 02-03 October 2013

2013 EUROMOD Research Workshop University of Lisbon, Portugal 02-03 October 2013. Simulating a Low Income Social Assistance Reform in Time of Crisis Venelin Boshnakov /UNWE/ Dragomir Draganov /MLSP/, Ekaterina Tosheva /UNWE/. Introduction. Structure of presentation Motivation and goals

gili
Download Presentation

2013 EUROMOD Research Workshop University of Lisbon, Portugal 02-03 October 2013

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 2013 EUROMOD Research WorkshopUniversity of Lisbon, Portugal02-03 October 2013 Simulating a Low Income Social Assistance Reform in Time of Crisis Venelin Boshnakov /UNWE/ Dragomir Draganov /MLSP/, Ekaterina Tosheva /UNWE/

  2. Introduction Structure of presentation • Motivation and goals • Current status and developments since the start of crisis • Low income social assistance system in Bulgaria: main parameters • Simulation scenarios: main results • Outline for future analysis

  3. Motivation and goals • After a period of stabilization in the period 2001-2008 (EU accession period) Bulgaria entered the crisis period (2009 – …?) • Failures of SMEs leading to layoffs… • Jump in unemployment rates – unemployment raised from about 200 thousand (5.7%) in 2008 to 410 thousand (12.3%) in 2012 (LF 15-64) • Youth unemployment (LF 15-29): from 9.4% to 20.8%

  4. Minimum and Average Monthly Wage /BGN/ (1 EUR ≈ 2 BGN )

  5. Main household income sources Source: Bulgarian HBS /NSI data/

  6. Main non-contributory social benefits • Contributory benefits – health & child-related • Non-contributory • Lump sum pregnancy & childbirth grants • Monthly allowance for bringing up a child up to age 1 • Child benefit (monthly child allowance for bringing up a child until completion of secondary education) • Scholarships • Social Old Age Pension • Social Invalidity Pension • Pension supplement in case of deceased spouse • Monthly social assistance allowance • Targeted Heating Allowance • Monthly allowance for social integration of disabled

  7. Main non-contributory social benefits Monthly social assistance allowance • Non-contributory, means-tested allowance • granted to persons living alone, or • to families whose income for the previous month is below the so-called “Differentiated Minimum Income” (DMI) • Except the income test, beneficiaries should satisfy additional eligibility criteria • DMI derives from GMI (65 BGN since 2009) • Target: extreme poverty!

  8. Monthly social assistance allowance • DMI for each person of a particular type • DMI is set as percentage of GMI • Calculated at individual level and then, at family level • Family DMI = Sum[DMIs] • Claimants receive MSAA if their gross income is lower than the calculated DMI • The amount of MSAA should equal the difference DMI–GrossIncome (top-up) • In fact, the “actual” unit of assessment is the household!

  9. Monthly social assistance allowance

  10. Monthly social assistance allowance

  11. Monthly social assistance allowance

  12. Real levels of main SBen parameters

  13. At-risk-of-poverty rates(Source: EUROMOD estimates)

  14. At-risk-of-povertyMost severely affected: unemployed, multi-child families (e.g. roma minority), elderly (espec.in rural areas)

  15. At-risk-of-povertyMost severely affected: unemployed, multi-child families (e.g. roma minority), elderly (espec.in rural areas)

  16. At-risk-of-povertyMost severely affected: unemployed, multi-child families (e.g. roma minority), elderly (espec.in rural areas)

  17. At-risk-of-povertyMost severely affected: unemployed, multi-child families (e.g. roma minority), elderly (espec.in rural areas)

  18. At-risk-of-povertyMost severely affected: unemployed, multi-child families (e.g. roma minority), elderly (espec.in rural areas)

  19. At-risk-of-povertyMost severely affected: unemployed, multi-child families (e.g. roma minority), elderly (espec.in rural areas)

  20. At-risk-of-povertyMost severely affected: unemployed, multi-child families (e.g. roma minority), elderly (espec.in rural areas)

  21. MSA adjustment – Scenario 1 • Simulation based on SILC augmented by National SILC • Adjust the GMI level to reflect the change in minimum wage level • Higher than inflation – 10% accumulated for 2010-2012 (adjusted GMI=71.45 BGN)

  22. MSA adjustment – Scenario 2 • Adjust the GMI level to reflect the poverty threshold • Which thresholds? Different types of households so a variety of options • Our initial choice – threshold level for 4-persons family: 2 adults + 2 children below age 14 (the “modal” demographic type for the period of low-rate sustainable growth of population in the period 1960s, 1970s, and 1980s • Adjusted to 2012 nominal income level: about 150 BGN /77 EUR/ (to be enhanced as an estimate…)

  23. MSA simulation resultsPoverty & Inequality

  24. MSA simulation resultsRelative and absolute changes

  25. MSA allowance at micro-levelDMI for 4-person /2-children family

  26. Outlines for enhancement • Improvement of uprating and validation • Improvement of data source (re-base on EU SILC 2010 /2009 income/) • Scenario choices • about GMI level • about target groups for MSA • Caution! Compensations for a possible boost in social spending • coordination with Child Benefit policies – more complicated /social reactions!/, but better grounded • coordination with Unemployment and Disability benefits

  27. Thank you for your attention!

More Related