Topics in public finance: social security and taxation

Summary The field of public finance focuses on the spending and taxing activities of governments and their influence on the allocation of resources and distribution of income. This work covers in three parts different topics related to public finance which are currently widely discussed in media and politics. The first two parts deal with issues on social security, which is in general one of the biggest spending shares of governments. The third part looks at the main income source of governments by analyzing the perceived value of tax competition. Part one deals with the current problem of increased early retirement by focusing on Switzerland as a special case. Early retirement is predominantly considered to be the result of incentives set by social security and the tax system. But the Swiss example demonstrates that the incidence of early retirement has dramatically increased even in the absence of institutional changes. We argue that the wealth effect also plays an important role in the retirement decision for middle and high income earners. An actuarially fair, but mandatory funded system with a relatively high replacement rate may thus contribute to a low labor market participation rate of elderly workers. We provide evidence using a unique dataset on individual retirement decisions in Swiss pension funds, allowing us to perfectly control for pension scheme details. Our findings suggest that affordability is a key determinant in the retirement decisions. The higher the accumulated pension capital, the earlier men, and to a smaller extent women, tend to leave the workforce. The fact that early retirement has become much more prevalent in the last 15 years is a further indicator of the importance of a wealth effect, as the maturing of the Swiss mandatory funded pension system over that period has led to an increase in the effective replacement rates for middle and high income earners. Part two covers the theoretical side of social security. Theories analyzing optimal social security benefits provide important qualitative results, by mainly using one general type of an economy. Economies are however very diverse concerning numerous aspects, one of the most important being the wealth level. This can lead to significant quantitative benefit differences that imply differences in replacement rates and levels of labor supply. We focus on several aspects related to this fact. In a within cohort social security model, we introduce disability insurance with an imperfect screening mechanism. We then vary the wealth level of the model economy and analyze how the optimal social security benefit structure or equivalently, the optimal replacement rates, changes depending on the wealth level of the economy, and if the introduction of disability insurance into a social security system is preferable for all economies. Second, the screening mechanism of disability insurance and the threshold level at which people are defined as disabled can differ. For economies with different wealth levels, we determine for different thresholds the screening level that maximizes social welfare. Finally, part three turns to the income of governments, by adding an element to the controversy on tax competition versus tax harmonization.2 Inter-jurisdictional tax competition can generate at least two potential benefits or costs: On a public level, tax competition may result in a lower or higher efficiency in the production of public services. But there is also a more private benefit in the form of an option for individuals to move to a community with a lower tax rate in the future. To explore the value citizens attach to tax competition we analyze a unique popular vote for a complete tax harmonization between communities in the third largest Swiss canton, Vaud. Although a majority of voters would have seemingly benefited from replacing the current tax rate by a revenue-neutral average tax rate, the proposal was rejected by a large margin. Our estimates suggest that the estimated combined perceived benefit from tax competition is in the range of 10%.

Which European Public Sphere? Normative Standards and Empirical Insights from Multilingual Switzerland

Since the beginning of the 1990s, the EU has been increasingly criticised for its democratic deficit, which is intrinsically linked to the absence of a public sphere at the European level. Whereas scholars consider the emergence of such a public sphere as a necessary requirement for the democratisation of the EU, they disagree on the conceptualisation and normative requirements for a meaningful public sphere at the European level. This article takes an empirical perspective and draws on the nation-state context of multilingual Switzerland to get insights into what a European public sphere might realistically look like. Based on a content analysis of the leading quality paper from each German- and French-speaking Switzerland by means of political claims analysis, it shows that three of the most often cited criteria for a European public sphere - horizontal openness and interconnectedness, shared meaning structures, and inclusiveness - are hardly met in the Swiss context. On this basis, it concludes that the normative barrier for finding a European public sphere might be unrealistically high and should be reconsidered.

Patients' Needs for Care in Public Mental Health: Unity and Diversity of Self-Assessed Needs for Care.

PURPOSE: Needs assessment is recognized to be a key element of mental health care. Patients tend to present heterogeneous profiles of needs. However, there is no consensus in previous research about how patients' needs are organized. This study investigates both general and specific dimensions of patients' needs for care. METHODS: Patients' needs were assessed with ELADEB, an 18-domain self-report scale. The use of a self-assessment scale represents a unique way of obtaining patients' perceptions. A patient-centered psychiatric practice facilitates empowerment as it is based on the patients' personal motivations, needs, and wants. Four seventy-one patients' profiles were analyzed through exploratory factor analysis. RESULTS: A four-factor bifactor model, including one general factor and three specific factors of needs, was most adequate. Specific factors were (a) "finances" and "administrative tasks"; (b) "transports," "public places," "self-care," "housework," and "food"; and (c) "family," "children," "intimate relationships," and "friendship." CONCLUSION: As revealed by the general factor, patients expressing urgent needs in some domains are also more susceptible to report urgent needs in several other domains. This general factor relates to high versus low utilizers of public mental healthcare. Patients also present specific needs in life domains, which are organized in three dimensions: management, functional disabilities, and familial and interpersonal relationships. These dimensions relate to the different types of existing social support described in the literature.

Essays on the Economics of Conflict and Migration

Les conflits civils sont des événements dramatiques qui poussent les individus hors de leurs pays d'origine. Mais si l'émigration était elle-même une force pacificatrice? Dans les deux premiers chapitres, je me suis intéressée à l'impact de l'émigration sur l'incidence des conflits civils dans les pays d'origine. Tout d'abord, je construis un modèle théorique d'équilibre général, dans lequel le niveau de conflit d'équilibre est déterminé par la ratio de combattants dans l'économie. Dans ce modèle, l'émigration décourage les conflits en réduisant les gains d'une rébellion, tout en augmentant le coût d'opportunité des combats. La principale prédiction du modèle est que le conflit diminue avec le niveau du salaire étranger net des coûts de migration. Dans le deuxième chapitre, je teste cette prédiction empiriquement. En utilisant une variable instrumentale, je démontre que l'émigration vers les pays développés diminue l'incidence de guerres civiles dans les pays d'origine. Ces résultats prouvent qu'en ouvrant leurs frontières, les pays d'accueil pourraient contribuer à sauver des vies, aussi bien celles des migrants que celles des habitants restés dans leur pays. De plus, les conflits civils tendent à détruire des sociétés en traumatisant les personnes touchées, augmentant ainsi le risque des conflits futurs. Afin de mieux comprendre ce cercle vicieux et de pouvoir y remédier, le troisième chapitre détermine si les enfants ayant vécu la guerre ont une tendance à être plus violent que des co-nationaux nés après la guerre. L'analyse se concentre sur les demandeurs d'asile en Suisse : Cette population est intéressante puisque l'allocation des demandeurs d'asile entre cantons est aléatoire, ce qui prévient le choix d'un canton avec un taux de criminalité plus élevé. Les résultats démontrent un effet de traumatisme causé par la guerre augmentant ainsi le risque de criminalité dans la vie adulte. Cependant, l'analyse de politiques publiques montre que la mise en place de politiques judicieuses permet d'éviter les conséquences de l'exposition à la guerre. En particulier, en offrant aux nouveaux arrivants l'accès au marché de travail ainsi que des perspectives à long-terme, la Suisse peut éliminer complètement l'effet du traumatisme sur la criminalité.

Life partnerships in childhood cancer survivors, their siblings, and the general population.

BACKGROUND: Life partnerships other than marriage are rarely studied in childhood cancer survivors (CCS). We aimed (1) to describe life partnership and marriage in CCS and compare them to life partnerships in siblings and the general population; and (2) to identify socio-demographic and cancer-related factors associated with life partnership and marriage. METHODS: As part of the Swiss Childhood Cancer Survivor Study (SCCSS), a questionnaire was sent to all CCS (aged 20-40 years) registered in the Swiss Childhood Cancer Registry (SCCR), aged <16 years at diagnosis, who had survived X05; 5 years. The proportion with life partner or married was compared between CSS and siblings and participants in the Swiss Health Survey (SHS). Multivariable logistic regression was used to identify factors associated with life partnership or marriage. RESULTS: We included 1,096 CCS of the SCCSS, 500 siblings and 5,593 participants of the SHS. Fewer CCS (47%) than siblings (61%, P < 0.001) had life partners, and fewer CCS were married (16%) than among the SHS population (26%, P > 0.001). Older (OR = 1.14, P < 0.001) and female CCS (OR = 1.85, <0.001) were more likely to have life partners. CCS who had undergone radiotherapy, bone marrow transplants (global P Treatment = 0.018) or who had a CNS diagnosis (global P Diagnosis < 0.001) were less likely to have life partners. CONCLUSION: CCS are less likely to have life partners than their peers. Most CCS with a life partner were not married. Future research should focus on the effect of these disparities on the quality of life of CCS.

Influence of CRTC1 Polymorphisms on Body Mass Index and Fat Mass in Psychiatric Patients and the General Adult Population.

IMPORTANCE There is a high prevalence of obesity in psychiatric patients, possibly leading to metabolic complications and reducing life expectancy. The CREB-regulated transcription coactivator 1 (CRTC1) gene is involved in energy balance and obesity in animal models, but its role in human obesity is unknown. OBJECTIVE To determine whether polymorphisms within the CRTC1 gene are associated with adiposity markers in psychiatric patients and the general population. DESIGN, SETTING, AND PARTICIPANTS Retrospective and prospective data analysis and population-based samples at Lausanne and Geneva university hospitals in Switzerland and a private clinic in Lausanne, Switzerland. The effect of 3 CRTC1 polymorphisms on body mass index (BMI) and/or fat mass was investigated in a discovery cohort of psychiatric outpatients taking weight gain-inducing psychotropic drugs (sample 1, n201;=201;152). The CRTC1 variant that was significantly associated with BMI and survived Bonferroni corrections for multiple comparison was then replicated in 2 independent psychiatric samples (sample 2, n201;=201;174 and sample 3, n201;=201;118) and 2 white population-based samples (sample 4, n201;=201;5338 and sample 5, n201;=201;123201;865). INTERVENTION Noninterventional studies. MAIN OUTCOME AND MEASURE Difference in BMI and/or fat mass between CRTC1 genotype groups. RESULTS Among the CRTC1 variants tested in the first psychiatric sample, only rs3746266A>G was associated with BMI (Padjusted201;=201;.003). In the 3 psychiatric samples, carriers of the rs3746266 G allele had a lower BMI than noncarriers (AA genotype) (sample 1, P201;=201;.001; sample 2, P201;=201;.05; and sample 3, P201;=201;.0003). In the combined analysis, excluding patients taking other weight gain-inducing drugs, G allele carriers (n201;=201;98) had a 1.81-kg/m2 lower BMI than noncarriers (n201;=201;226; P201;<201;.0001). The strongest association was observed in women younger than 45 years, with a 3.87-kg/m2 lower BMI in G allele carriers (n201;=201;25) compared with noncarriers (n201;=201;48; P201;<201;.0001), explaining 9% of BMI variance. In the population-based samples, the T allele of rs6510997C>T (a proxy of the rs3746266 G allele; r2201;=201;0.7) was associated with lower BMI (sample 5, n201;=201;123201;865; P201;=201;.01) and fat mass (sample 4, n201;=201;5338; P201;=201;.03). The strongest association with fat mass was observed in premenopausal women (n201;=201;1192; P201;=201;.02). CONCLUSIONS AND RELEVANCE These findings suggest that CRTC1 contributes to the genetics of human obesity in psychiatric patients and the general population. Identification of high-risk subjects could contribute to a better individualization of the pharmacological treatment in psychiatry.

Suicide in HIV-infected individuals and the general population in Switzerland, 1988-2008.

OBJECTIVE: High rates of suicide have been described in HIV-infected patients, but it is unclear to what extent the introduction of highly active antiretroviral therapy (HAART) has affected suicide rates. The authors examined time trends and predictors of suicide in the pre-HAART (1988-1995) and HAART (1996-2008) eras in HIV-infected patients and the general population in Switzerland. METHOD: The authors analyzed data from the Swiss HIV Cohort Study and the Swiss National Cohort, a longitudinal study of mortality in the Swiss general population. The authors calculated standardized mortality ratios comparing HIV-infected patients with the general population and used Poisson regression to identify risk factors for suicide. RESULTS: From 1988 to 2008, 15,275 patients were followed in the Swiss HIV Cohort Study for a median duration of 4.7 years. Of these, 150 died by suicide (rate 158.4 per 100,000 person-years). In men, standardized mortality ratios declined from 13.7 (95% CI=11.0-17.0) in the pre-HAART era to 3.5 (95% CI=2.5-4.8) in the late HAART era. In women, ratios declined from 11.6 (95% CI=6.4-20.9) to 5.7 (95% CI=3.2-10.3). In both periods, suicide rates tended to be higher in older patients, in men, in injection drug users, and in patients with advanced clinical stage of HIV illness. An increase in CD4 cell counts was associated with a reduced risk of suicide. CONCLUSIONS: Suicide rates decreased significantly with the introduction of HAART, but they remain above the rate observed in the general population, and risk factors for suicide remain similar. HIV-infected patients remain an important target group for suicide prevention.

Clustering of health behaviours in adult survivors of childhood cancer and the general population.

BACKGROUND: Little is known about engagement in multiple health behaviours in childhood cancer survivors. METHODS: Using latent class analysis, we identified health behaviour patterns in 835 adult survivors of childhood cancer (age 20-35 years) and 1670 age- and sex-matched controls from the general population. Behaviour groups were determined from replies to questions on smoking, drinking, cannabis use, sporting activities, diet, sun protection and skin examination. RESULTS: The model identified four health behaviour patterns: 'risk-avoidance', with a generally healthy behaviour; 'moderate drinking', with higher levels of sporting activities, but moderate alcohol-consumption; 'risk-taking', engaging in several risk behaviours; and 'smoking', smoking but not drinking. Similar proportions of survivors and controls fell into the 'risk-avoiding' (42% vs 44%) and the 'risk-taking' cluster (14% vs 12%), but more survivors were in the 'moderate drinking' (39% vs 28%) and fewer in the 'smoking' cluster (5% vs 16%). Determinants of health behaviour clusters were gender, migration background, income and therapy. CONCLUSION: A comparable proportion of childhood cancer survivors as in the general population engage in multiple health-compromising behaviours. Because of increased vulnerability of survivors, multiple risk behaviours should be addressed in targeted health interventions.

Optimal public rationing and price response.

We study optimal public health care rationing and private sector price responses. Consumers differ in their wealth and illness severity (defined as treatment cost). Due to a limited budget, some consumers must be rationed. Rationed consumers may purchase from a monopolistic private market. We consider two information regimes. In the first, the public supplier rations consumers according to their wealth information (means testing). In equilibrium, the public supplier must ration both rich and poor consumers. Rationing some poor consumers implements price reduction in the private market. In the second information regime, the public supplier rations consumers according to consumers' wealth and cost information. In equilibrium, consumers are allocated the good if and only if their costs are below a threshold (cost effectiveness). Rationing based on cost results in higher equilibrium consumer surplus than rationing based on wealth.

Do we fear tax competition among new and old European countries ?

The purpose of this paper is to study both theoretically and empirically tax competition in the enlarged EU and to provide some insights on ongoing reforms concerning business taxation. We support the idea that even if one can observe cuts in "new" members statutory business tax rates, this should not result in fiercer tax competition between the "core" and "the "periphery" since infrastructure endowments and the existence of agglomeration rents in the core of the EU may prevent (at least partially) activities to relocate to the "new" members.

The Inter-municipal Cooperation in Switzerland and the Trend towards Amalgamation

In Switzerland, the ongoing reforms of fiscal federalism put municipalities under increased fiscal stress. A majority of the municipalities had responded by increasing the cooperation with neighbouring municipalities over the last few years. Simultaneously, many discuss or are directly involved in a possible amalgamation project. Accordingly, the paper aimed at describing how cooperation has presently developed between Swiss municipalities, in order to illustrate the existing trend towards amalgamation. Current surveys helped us estimate the growing importance of inter-municipal arrangements together with the surge of amalgamations. A further goal was to investigate if cantonal financial incentives to municipal amalgamation essentially benefit the cantonal community, following the fiscal equivalence principle, or if they rather benefit amalgamating municipalities. In reality, equivalence does not exist. However, this may possibly be the condition to reduce inequality among amalgamating municipalities.