This paper analyses financial incentives for early retirement embedded in social security systems in the OECD countries over the past three decades. Financial incentives to retire early are strong in most OECD countries and have increased over time due to the lowering of standard retirement ages, higher pension replacement rates, flatter pension accruals at older ages, and higher pension contribution rates. Moreover, work disincentives among older workers have been amplified in countries where other income-support schemes – which were originally designed to deal with other contingencies such as unemployment or disability – have been used to finance early retirement. Pooled cross-country time-series regressions show that increased disincentives to work at older ages have contributed significantly to the drop in labour-force participation rates of older males, and that removing these incentives could raise the labour supply of older workers significantly, especially in some European countries.
Howard Oxley, Jean-Marc Burniaux, Thai-Thanh Dang and Marco Mira d’Ercole
This study examines developments in the distribution of disposable income and poverty for 13 OECD countries over the past one to two decades. It finds that income inequality and poverty have increased in about half the OECD countries. However, the widening in the distribution of market income has been more pronounced and more widespread across countries, reflecting developments in both earnings and capital and self-employment income. While widening wage rates have played a role in explaining earnings developments, the increasing share of households with no workers has also been important. The tax-and-transfer system has contained or, at least, partly offset the widening in the distribution of market income. Transfer payments have been particularly important at the bottom of the income distribution as they increasingly replaced lost earnings. Households of retirement age appear to have benefited, on average, the most from net taxes and transfers and children the least.
Dominique Guellec and Bruno van Pottelsberghe de la Potterie
This paper analyses the impact of government-funded R&D and fiscal incentives on private R&D investment. The analysis covers 17 OECD countries over the period 1981-1996. The main conclusions are: i) government R&D and tax incentives stimulate private R&D; ii) fiscal incentives have a short run effect on private R&D, whereas public R&D is stimulating in both the short and long-term; iii) the impact of R&D subsidies varies with respect to the subsidisation rate; its effectiveness increases up to a threshold of about 15 per cent and decreases beyond; iv) the most stable policy tools are also the most effective; v) the policy tools are substitutes; vi) government support linked to defence objectives has a negative impact on private R&D.
Dominique Guellec and Evangelos Ioannidis
Business R&D expenditure levelled-off in most OECD countries in the late 1980s-early 1990s, after several decades of steady growth. They have recovered in some countries since then. This study analyses the determinants of R&D expenditures in an econometric framework, for 12 OECD countries, from 1972 to 1996. Four factors are identified as the main causes of the levelling-off: the economic downturn of the early 1990s, the reduction in government funding (due mainly to shrinking defence budgets), high real interest rates, and a shift in industry structure (the growth in services and a slowdown in certain high tech industries).
Georges Lemaitre, Pascal Marianna and Alois van Bastelaer
There is currently no uniform statistical definition of part-time work in use internationally. The identification of a job as part-time is in some countries based on the respondent’s assessment, in others on a usual hours threshold (which can vary from country to country) and in still others, on a combination of both criteria. Empirical evidence indicates that in countries where the incidence of part-time work is high (according to national definitions), there are significant proportions of persons in part-time jobs with relatively long hours of work (30 usual hours or more). Conversely, in countries where part-time work is less common, there are generally significant numbers of workers in full-time jobs of relatively fewer hours (less than 30 usual hours). The adoption of a common definition for all countries (based on a usual hours threshold) tends to reduce the crosscountry variation in the incidence of part-time work significantly, even if country rankings are not substantially affected.
Economic Policy Reforms: Going for Growth 2008
