Российская академия наук институт международных экономических и политических исследований модели системной трансформации и социальная цена реформ (опыт России, СНГ и стран цве)

Вид материала

Документы

Содержание Impact of Recent Reforms in the Social Sector on Inequality and Poverty in Croatia 1. The scope of poverty and inequality Figure 2. Poverty rates in Croatia and CEE countries (EU members) (2001) 2. Population groups in poverty Figure 4. Relative poverty risk by subgroups (2003) 3. Social reforms and their influence on poor groups Figure 5. Structure of social expenditures in Croatia (2000) 4. Pension reform Figure 6. Impact of pensions and other transfers on poverty rate reduction (2001) Figure 7. Impact of pension reform on poverty among the retirees Table 1. Contribution to total inequality by income components 5. Health care reform 6. Reform of child allowances Table 2. How much do the poorest receive in social transfers? Revija za socijalnu politiku Croatia Economic Vulnerability and Welfare Study, Volume II: Technical Papers Croatia Economic Vulnerability and Welfare Study, Volume II: Technical Papers Human Development Report: Croatia 2002 Addressing Emergency: Welfare State Reform in South Eastern Europe Human Development Report: Croatia 2002 ... Полное содержание

Подобный материал:

• Российская академия наук институт международных экономических и политических исследований, 2692.27kb.
• Российская академия наук институт международных экономических и политических исследований, 2837.49kb.
• Российская академия наук институт международных экономических и политических исследований, 3986.17kb.
• Российская Академия Наук институт международных экономических и политических исследований, 2718.17kb.
• Терроризм как угроза в системе международной безопасности: особенности современного, 101.81kb.
• Иммиграция населения как фактор экономического развития ( на примере развитых стран), 595.95kb.
• В. И. Вернадский российская академия естественных наук, 56.62kb.
• Программа спецкурса " опыт российских реформ в зеркале общественного мнения" для студентов, 212.59kb.
• Данной статьи хроника рыночной реформы в одном богатом постколхозе Юга России, анализ, 247.25kb.
• Российская академия наук санкт-петербургский научный центр ран институт лингвистических, 13.04kb.

Šućur Z.^*

Impact of Recent Reforms in the Social Sector on Inequality and Poverty in Croatia

Introduction

Poverty in Croatia was neglected until the 1990s. Very few discussions on poverty were held, because poverty was not considered as a serious social problem. Such an attitude towards poverty was obviously politically and ideologically coloured, but it was also conditioned by a specific system of social protection (Županov, 1996; Šućur, 2001, 2003). Until the early 1980s, Croatia had relatively high rates of economic growth and low unemployment rates. The social protection system was strongly founded on the concept of full employment. Social protection was only granted to those who were employed, but since the unemployment rates were very low, the social protection system was “universalistic” and “inclusive”. Furthermore, consumer prices were subsidized, thus representing an important tool of social policy and a means of alleviating poverty, since it kept the costs of living at a low level.

Due to a broadly based social security system, very few individuals were actually starving or living at the level of bare physiological survival. Poverty was perceived primarily in an absolute sense, that is, as a threat to physical survival or health. Relative definitions of poverty were not widely accepted among politicians or scientists.

The approach to poverty started to change when the concept of full employment came under threat. The structural problems within the economy, particularly in the 1980s, caused a growth of unemployment and a fall, or at least stagnation, of income. Due to the war and the process of transition, the 1990s brought about an even more dramatic fall in the standard of living, which resulted in an expansion of poverty. The privatization of public property is seen today as economically unsuccessful and socially unjust (Čengić and Rogić, 1999). A large number of citizens faced a problem of survival and of satisfying their basic needs. Although there was total consensus that an impoverishment of society had occurred, there was no agreement about the level of this impoverishment, or about the social structure of the poor. Assessments on the scope of poverty were mostly based on the subjective perceptions of citizens. However, soon there was awareness that poverty should be studied objectively.


1. The scope of poverty and inequality

Due to the lack of empirical research, it is very difficult to speak about trends in poverty in Croatia after the Second World War. The first national research on poverty in the post-war period was conducted in 1998 (World Bank, 2000). Before that, there was no research that could be used for the purpose of comparability. However, there are problems in monitoring poverty after 1998, too. There is still no official poverty line in Croatia. It is well known that poverty indicators greatly depend on the choice of the poverty line and the equivalence scale. In the first national research, an absolute poverty line was used (based on a food-energy intake method). The poverty rate in Croatia is low by absolute standards. In relation to the international line of 1 US$ per day per person – there are no poor people in Croatia, while in relation to the line of 4.3 US$ per day per person there were 4.8% of the poor in 1998 (World Bank, 2000; Luttmer, 2000). If the food energy intake method is used, the poverty rate is about 10%. But since 2001 the Croatian Bureau of Statistics (CBS), which has been collecting data on household consumption and income, has started to calculate poverty indicators by the EU official poverty line (60% of the median of the national equivalent income).

Given the EU official poverty line, poverty rates in the period 2001-2003 ranged between 17 and 18% (if cash and in-kind income are taken into consideration) (figure 1).


Figure 1. Poverty rates in Croatia (2001-2003)

Source: Croatian Bureau of Statistics (CBS).

Note: When calculating poverty rates so called modified OECD equivalence scale was used (first adult =1, other adults=0.5, children younger than 14=0.3).


If we apply the relative poverty line defined as 60% of the median of the national income to the period 1998-2003, poverty rates varied between 1-2%. Relying on these data, we may say that the poverty in Croatia is more of stagnant than transient character, although the poverty dynamics has not been well researched. We have no exact information on how long people remain in poverty and what happens to them in that period. There is only one qualitative study dealing with survival strategies of the poor (Gomart, 2000).

Compared to most EU countries, Croatia has higher poverty rates. Also, in comparison to new EU countries Croatia has higher poverty rates (Croatia has the poverty rate even twice as large as that in Slovakia, Hungary, Czech Republic or Slovenia)(figure 2).


Figure 2. Poverty rates in Croatia and CEE countries (EU members) (2001)

Source: CBS.

Note: Poverty line defined as 60% of the median of national income. Poverty indicators refer only to cash income. “EU 10” comprises 10 countries with EU membership since 1 May 2004. The reference year for Latvia is 2002, for Slovenia 2000, and for Slovakia 2003.


The Gini coefficient, as a most frequently used indicator of income inequalities, has been rising slightly in recent 10 years (Nestić, 2003). Notwithstanding, income inequalities are not essentially different than those in other transition countries or in EU countries (figure 3). These data are incongruent with widespread opinion that inequalities in Croatia are too high. This opinion can be linked to the perception of unfair sources of inequalities.


Figure 3. Gini coefficients in Croatia and CEE countries (EU members) (2001)

Source: CBS.

Note: Gini coefficients refer only to cash income. “EU 10” comprises 10 countries with EU membership since 1 May 2004. The reference year for Latvia is 2002, for Slovenia 2000, and for Slovakia 2003.


2. Population groups in poverty

Unlike poverty rates that are very sensitive to poverty lines or equivalence scales, the poverty profile is more stable and less sensitive to the choice of poverty line and equivalence scale. Poverty is usually related to some demographics. Some groups have higher poverty rates and a higher relative poverty risk. The relative poverty risk tells us what is the probability for some group to live in poverty in comparison to the average poverty risk in a society. It is the ratio between the poverty rate of a subgroup and the overall poverty rate. E.g. a subgroup with a poverty risk of one has an average poverty risk, while a subgroup with poverty risk of 1.5 is 50% more likely to be poor than average. Groups with the highest poverty risk in Croatia are as follows (figure 4):

1. pensioners and the elderly,
   
2. the unemployed,
   
3. persons with low education,
   
4. one person households,
   
5. single-parent families.
   

Persons older than 64 have the poverty rate almost twice as large as poverty rates of other age categories. Older persons are 70% more likely to be poor than the average Croatian citizen. Pensioners make up between 30% and 40% of the poor population in Croatia. About 40% of the poor live in households headed by a pensioner or an elderly inactive person, at least 25% of the elderly persons do not receive old-age benefits, and half of the pensioners receive pensions which are below the absolute poverty line.


Figure 4. Relative poverty risk by subgroups (2003)



As a rule, the unemployed have the highest poverty risk among population groups (almost twice as high as the average). However, it seems that unemployment has a more adverse impact on the material status of men than that of women. The unemployed are among rare groups where men have much higher poverty risk than women have.

In Croatia, one-person households are at a higher poverty risk than households with more children. In 2003 the relative poverty risk for one-person households was more than twice as large as the average. Poverty risk is even higher in those one-person households where old women live. Living in single parent families is also strongly correlated to poverty. We can see that the relative poverty risk in the period 2001-2003 for single parent families with one or more children was 70% higher than the average.


3. Social reforms and their influence on poor groups

To assess the effectiveness of reformist attempts and anti-poverty measures, it is interesting to have a look at the structure of total social expenditures. First, as we can see the total social expenditures in 2000 made up 26% of GDP (figure 5). They were even reduced for 0.8% in relation to the year 1999 (Mađarević-Šujster, 2000). If we add to these expenditures education costs of 4% GDP and direct and indirect costs of war victims, we get total expenditures amounting to 1/3 of GDP. The second thing we can see from the figure is that two systems absorb more than 80% of social expenditures. These are the pension system and the health care system.


Figure 5. Structure of social expenditures in Croatia (2000)



It is quite clear from the mentioned figure that reforms in the pension system and health care system will be pivotal. In addition, from the point of view of fight against poverty, reforms in the field of family policy are of great importance. So far, transformations in the unemployment protection sector and in social welfare have not resulted in a significant improvement of the living conditions of the poor.

4. Pension reform

Pension reform started from the beginning of 2001 (when a new law on pension insurance came into force). Many in Croatia have no doubt about the necessity of reforming pension system. Many indicators show that the situation in the pension system is quite difficult, e.g. the dependency ratio (the ratio between the insured and pensioners) or the replacement rates (the ratio between the average pension and the average wage). It seems that the number of the insured is approaching the number of pensioners. In regard of the replacement rate, it has been declining over 1990s, and now it is a little more than 40% of the average wage. The poverty rate reduction (the difference between poverty rates obtained on the basis of pre-transfer and post-transfer income) due to old-age and survivors’ pensions is the lowest among EU countries (figure 6).


Figure 6. Impact of pensions and other transfers on poverty rate reduction (2001)

Source: CBS

Note: Poverty line defined as 60% of the median of national income. Poverty indicators refer only to cash income. “EU 10” comprises 10 countries with EU membership since 1 May 2004. The reference year for Latvia is 2002, for Slovenia 2000, and for Slovakia 2003.


Social transfers include unemployment benefits, child allowance, maternity leave benefits, layette assistance, compensations for sick-leave of 42 or more days, allowance for physical injury and nursing by other person, social welfare payments, compensation for the rehabilitation or employment of disabled persons, disability pensions, scholarships or educational allowances, funds received from other persons for housing expenses.


It should be stressed that Croatian transfer system as a whole is not less effective than transfer systems in most EU countries (Šućur, forthcoming). The Croatian transfer system is even more effective than that of the EU (measured by poverty rate reduction). Moreover, if we exclude old-age pensions and survivors’ pensions from transfers, the remaining transfers are the most efficient among EU countries. However, the relative effectiveness of transfer system as a whole has been shadowed by ultimately ineffective scheme of old-age and survivors’ pensions, which should be pointed out because the pension scheme is the largest one and accounts for more than 40% of social security costs.

The Croatian government adopted a model of pension reform proposed and to some degree imposed by the World Bank (Pension System and Social Welfare: Croatia in 21^st Century, 2002). The previous pay as you go system has been transformed and split into multi-pillar system. Also, eligibility criteria have been modified and new pension formulas and new indexing rules have been set. One aim of the reform is to increase the level of pension benefits and thus reduce the scope of poverty among the retired population. Simulations of the impact of pension reform on poverty, made by the World Bank (2000), show that pension reform will have positive medium-term and long-term effects (figure 7).

Figure 7. Impact of pension reform on poverty among the retirees

Source: World Bank, 2000.

Note: Total number of retirees is the sum of elderly (over 60 years) and disabled individuals. Poverty line is constant in real terms and set at 1000 Kuna’s per month per capita in 1998.


According to the estimations, the reform would drastically reduce the incidence of poverty among the retirees in the next ten years, and it would fully eliminate poverty among those covered by the system in the 20 years period. The reform is supposed to also influence those who retired earlier. Even though we accept these simulations to be exact, as very few people do, some groups of retirees would continue to face increased poverty risk. These groups mainly consist of women having had short and disrupted working careers, those who, despite long working careers, wouldn’t have earned enough to reach the minimum level of contributions for eligibility and those who are employed but don’t pay contributions. These groups are estimated to count 20% of those who would retire in next twenty years.

What effects are to be expected in short-term perspective? Now, the average amount of entry pensions is less than the average pension of those who retired earlier, because the pension basis has been changed (pensions are calculated on the basis of wages earned throughout the working life, and not only on the basis of the top 10 years as used to be the case). Besides, a protective supplement on the minimum pension and a supplement for help and care have been abolished and transferred into the social welfare system, where they are not automatically allocated, as was the case in the pension system, but are allocated on the basis of means-test. Also, the recent (non-linear) increase in the levels of pension benefits made contributions to the growth of inequalities (table 1).

Table 1.

Contribution to total inequality by income components

	1998	2000	2002
Total income Wages and salaries Income from self-employment Pensions Social transfers (w/o pensions) Other cash income In-kind income	100% 48.8% 28.1% 8.3% 0.0% 12.9% 1.9%	100% 63.2% 15.7% 8.1% -0.5% 10.5% 3.0%	100% 63.5% 15.4% 16.5% -2.1% 5.2% 1.5%

Source: Nestić, forthcoming

In addition, this reform will not eliminate poverty among the elderly in general. The question is what to do with older people not to be included in pension system (they make about 1/4 of people older than 60). It seems that there are two solutions: to increase the coverage of the pension system or to expand social security net to cover the poor elderly. True, a proposal of the pension reform strategy predicted the introduction of some kind of national pension, but that proposal (at least so far) has not been adopted because of budgetary financial constraints. Evidently, there is nothing for this segment of the elderly but to be covered by social assistance programs. However, the issue is that social assistance in Croatia can hardly help anybody escape poverty. The level of social assistance benefit is very low (the threshold for an adult person who is capable of work amounts to 55 Euro a month and the threshold for an adult person incapable of work is 82). The problem is that these thresholds are not founded on any concept of absolute or relative poverty. They have been established in an arbitrary manner by the government. Therefore, we can expect large parts of the old population to continue to stay in poverty.

For the time being, it is difficult to assess the effectiveness of different models of pension reforms (the effectiveness is measured here by the level of pension benefits or by poverty rate reduction). Experiences are very scarce and no one knows what will be going on in the future (in 20 years). However, Barr (2002) has shown that models of pension reforms by themselves are not crucial. Pension benefits depend and will depend on economic achievements of those who are and will be employed.

5. Health care reform

The health care reform also started in 2001 and this reform has drawn great attention. Yet, the scenario of this reform was much less known than that of pension reform. The issue of health care in Croatia is not related to the coverage (almost all citizens in Croatia are entitled to health care, about 95%). The greatest problem of transition in the health care area has been an unequal access to health services. There is a widespread trend of informal payments for health care or of using private-providing health services, which affects surely poor groups of the population. Unfortunately, there is a lack of reliable research on the accessibility of health care and the nature of health inequalities. However, based on a broad range of personal experiences, we can conclude that poor Croatian citizens achieve health protection with many difficulties. This can be proved by the diseases, which have been more frequently found among the low-income strata (especially inappropriate diet and alcoholism).

The new law on health insurance (which came into force in the beginning of 2002), introduced for the first time the difference between an obligatory package of health services and an additional package of services. The first package of health services has been paid from health insurance contributions, while the other requires additional contributions. In this way there is an attempt to differentiate between health care completely financed from health insurance and health care requiring co-payments of insured persons. The obligatory package of health service comprises mostly preventive and primary health care programs. Certain groups of citizens, being incapable of paying additional health care, are exempted fully or partly from paying health care costs (children under 18, persons with disabilities, wartime military disabled persons and persons with low incomes).

Integration of a great deal of preventive health care programs into the obligatory package might be the best guarantee for the expansion of the high-quality health care. Furthermore, preventive programs should be developed in order to contain spreading of diseases related to risk behaviors. Such preventive programs are to be developed at the regional and local levels because these programs are essential for improving the quality of life of poor groups. Certainly, the health reform designed in this way has pursued two goals: to stabilize the system in financial terms and to improve quality and accessibility of health care. However, the achievement of these two goals has been impeded by a range of difficulties. Negative consequences of the privatization in the health care system should be emphasized (the erosion of public health care). The privatization may bring about differences in the ethically most sensitive domain of human existence – the right to life (Puljiz, 2001).

6. Reform of child allowances

Child allowance is considered to be one of important tools in combating poverty in families with children (Puljiz, manuscript). We suppose that the impact of this measure in Croatia in terms of poverty alleviation has gone up after its universalisation. Until a few years ago, child allowance in Croatia was a part of the social insurance system and only the children of employed parents were entitled to child allowance. On the proposal of a group of experts, the financing of child allowance was changed from the contribution-based to budget-based system. Since the end of 2000, child allowance has covered all children regardless of their parents' employment status, taking into consideration the material situation of the family (therefore, it includes the children of the unemployed, farmers and pensioners). In the case when child allowance costs have been financed from the state budget, it is fair that all children are entitled to this benefit. Otherwise, some groups of children would be faced with discrimination. However, the shift in the child allowance model has resulted in a growing number of beneficiaries and in raising costs. Beneficiaries are divided in two categories in terms of income per family member. Children from families having lower income per capita receive higher benefits. Also, it is very important to note that child allowances have been disregarded on the occasion of claiming social assistance benefit. It is true that the government sometimes took a step back when it realized that the costs of child allowances could go beyond its financial capacity. That is why two years ago the government defined new eligibility criteria, decreasing the income threshold under which families are entitled to benefits. Besides, since the end of 2001, students have not been eligible for child allowance. The idea was to substitute child allowances for student grants. However, it has not worked well.

Some argue that universal child allowance was not good choice in the situation of squeeze on budget funds. In other words, it was not a step towards rationalization. However, the experience shows that the child allowances should be primarily understood as a measure for combating poverty, and less as a means of population policy.


Conclusion

The Programme for combating poverty and social exclusion (2002), adopted by the Croatian Government, says that combating poverty cannot be limited to the social assistance system only. Without changes in the labour market, employment policy, education, pension system and other areas, anti-poverty programs can hardly reduce poverty. A successful policy in fighting against poverty should be based on a combination of the provision of employment opportunities and the appropriate income support. Social insurance by itself is not an adequate shield against poverty, especially if a large number of citizens are not covered by insurance programs (e.g. in the situation of raising unemployment). However, if the social insurance net is permeable, more difficulties in combating poverty may be expected. From the point of view of anti-poverty policy, inadequacy of social insurance programs has been reflected in underdeveloped programs, low levels of benefits and aggravated access to different services. Croatia is just facing the problem of low benefits and poor accessibility of social services.

Few studies have shown that pensions are not well targeted to the poor (table 2, figure 8). True, the aim of the pension or health care system (or in general social insurance schemes) is not the fight against poverty, but the compensation of lost income in precisely determined circumstances. However, it seems legitimate to insist that the pension system should make a greater impact on poverty reduction in case when a significant share of pension costs has been financed from the budget and tax revenues. Currently, about 40% of the total pension costs are funded from the budget (Bagarić and Marušić, 2004).

Croatia has relatively high social expenditures, but the point is to what degree they are targeted to the poor. It seems that the expenditures within the largest programs are poorly targeted to the poor (pensions, health care), while expenditures within programs getting lesser part of the total expenditures are much better directed to the poor (social assistance, unemployment benefit) (figure 8).

Table 2.

How much do the poorest receive in social transfers?

	Poorest 10%			Poorest 20%
	1998	2000	2002	1998	2000	2002
Share in total social transfers (%) Share in total pensions (%) Share in other social transfers (%) Share in total wage bill (%) Share in total income (%)	6.2 5.0 12.0 2.3 3.5	5.7 4.6 13.2 2.0 3.3	5.4 3.5 16.8 1.5 3.1	15.3 13.8 22.6 6.5 8.8	13.2 11.2 26.1 6.2 8.4	12.3 9.6 29.2 5.2 8.0

Source: Nestić, forthcoming.


Figure 8. Share of social transfers used by the poor (as % of the GDP in 1998)



Source: World Bank, 2000


Puljiz (2001) argues that Croatia faces two opposite pressures. On the one hand, parts of the population pauperized and struck by the war are calling for an intensified state intervention and redistribution of national income so that their position, which they consider unfair, might be improved. On the other hand, international financial institutions and private entrepreneurs are imposing an imperative of the reduction of social costs. In such unfavorable circumstances, social reforms are being carried out and prepared, primarily those concerning old-age pensions and health insurance, anti-poverty policy, unemployed protection, family policy, education and so on.


Literature

Bagarić, N., Marušić, Lj. (2004) Pristup socijalnim pravima u Hrvatskoj: mirovinsko osiguranje (Access to Social Rights in Croatia: Pension Insurance), Revija za socijalnu politiku 1: 39-61.

Barr, N. (2002) Reforming Pensions: Myths, Truths, and Policy Choices, International Social Security Review 1: 3-36.

Čengić, D., Rogić, I. (eds.) (1999) Privatizacija i javnost (Privatization and the Public). Zagreb: Institute of Social Sciences “Ivo Pilar”.

Gomart, E. (2000) Social Assessment of Poverty in Croatia, in: Croatia Economic Vulnerability and Welfare Study, Volume II: Technical Papers. Washington: World Bank.

Luttmer, E. (2000) Poverty and Inequality in Croatia, in: Croatia Economic Vulnerability and Welfare Study, Volume II: Technical Papers. Washington: World Bank.

Mađarević-Šujster, S. (2000) Croatia: Social Expenditure 1994-1999, in: Croatia Economic Vulnerability and Welfare Study, Volume II: Technical Papers. Washington: World Bank.

Mirovinski sustav i socijalna skrb (Hrvatska u 21. stoljeću) (Pension System and Social Welfare (Croatia in 21^st Century)) (2002.) Zagreb: Office for the Strategy of Development of the Republic of Croatia.

Nestić, D. (2003) Income Inequalities, in: N. Starc (ed.) Human Development Report: Croatia 2002. Zagreb: UNDP and Institute of Economics.

Nestić, D. (forthcoming) Raspodjela dohotka u Hrvatskoj: što nam govore podaci iz ankete o potrošnji kućanstava (Income Distribution in Croatia), Financijska teorija i praksa.

Program borbe protiv siromaštva i socijalne isključenosti (Programme for Combating Poverty and Social Exclusion) (2002.) Zagreb: The Government of the Republic of Croatia.

Puljiz, V. (2001) Croatia, in: Addressing Emergency: Welfare State Reform in South Eastern Europe. Belgrade: Friedrich Ebert Stiftung.

Puljiz, V. (manuscript) Family Policy of the Republic of Croatia. Zagreb: Faculty of Law.

Šućur, Z. (2001) Siromaštvo: teorije, koncepti i pokazatelji (Poverty: Theories, Concepts and Indicators). Zagreb: Pravni fakultet.

Šućur, Z. (2003) Poverty – A Neglected and Underresearched Social Problem, in: N. Starc (ed.) Human Development Report: Croatia 2002. Zagreb: UNDP and Institute of Economics.

Šućur, Z. (forthcoming) Siromaštvo i socijalni transferi u Hrvatskoj (Poverty and Social Transfers in Croatia, Financijska teorija i praksa.

World Bank (2000) Croatia Economic Vulnerability and Welfare Study. Washington: World Bank.

Županov, J. (1996) The Social Legacy of Communism, Društvena istraživanja 2: 425-453.


Макетирование В. Грачев

Ответственная за выпуск Н. Кручинина

Подписано в печать 18.09.2005




Объем 13,2 п.л. Тираж 300 экз.

Редакционно - издательская группа

Главный редактор Э. Шейнин

Отпечатано в типографии ИМЭПИ РАН

Москва, 117418, ул. Новочеремушкинская, д.46


ISBN 5-9520


© ИМЭПИ РАН