The Brazilian social security program:diagnosis and proposal for reform

The Brazilian pay-as-you-go social security program is analyzed in a historical perspective. Its contribution to income inequality, and the role played by the inflation as a balancing variable are discussed. It is shown that budgetary constraints due to the increasing informalization of the labor force can no longer be reconciled with protligate eligibility criteria. A tailor-made proposal for reform is presented as well as a plan for financing the transition from today's system to the proposed one.

Previdencia social no Brasil: por uma reforma mais duradoura

A reforma da previdência social tem sido uma preocupação de vários países: tanto no mundo desenvolvido como no em desenvolvimento. A motivação básica é o esgotamento do modelo de repartição, devido a fatores demográficos: queda de natalidade e aumento da longevidade. Analisando o fenômeno do esgotamento, o artigo propugna pela adesão, tal como no bem sucedido caso chileno, do sistema de capitalização.

A Previdência Social Brasileira após a transição demográfica: simulações de propostas de reforma

É consenso que as tendências demográficas de longo prazo estão por trás da deterioração das contas previdenciárias na grande maioria dos países do globo. O problema se agrava no Brasil, pois a informalidade do mercado de trabalho exclui milhões de potenciais contribuintes do regime de repartição. O trabalho mensura, através de simulações de um modelo de longo prazo, qual o impacto fiscal das mudanças introduzidas pela transição demográfica. E, admitindo a persistência dessa nova estrutura etária no país, simula quais propostas de reforma da previdência têm maior resultado na redução dos déficits atualmente registrados no INSS. Dentre as principais conclusões estão: (i) a transição demográfica sozinha é responsável por quase dobrar a alíquota previdenciária necessária para equilibrar o sistema, e; (ii) apesar de ser extremamente importante aprovar as propostas de reforma tradicionais (instituição de idade mínima, taxação dos inativos e mudanças nas regras de cálculo dos benefícios), aumentar a cobertura do regime de repartição através da inclusão dos aproximadamente 45 milhões de trabalhadores informais não-contribuintes reduz déficits em magnitude semelhante.

Income and bargaining effects on education and health

In this paper, we examine the impacts of the reform in the rural pension system in Brazil in 1991 on schooling and health indicators. In addition, we use the reform to investigate the validity of the unitary model of household allocation by testing if there were uneven impacts on those indicators depending on the gender of the recipient. The main conclusion of the paper is that the reform had significantly positive effects on the outcomes of interest, especially on those co-residing with a male pensioner, indicating that the unitary model is not a well-specified framework to understand family allocation decisions. The highest impacts were on school attendance for boys, literacy for girls and illness for middle-age people. We explore a collective model as defined by Chiappori (1992) as one possible alternative representation for the decision-making process of the poor rural Brazilian families. In the cooperative Nash equilibrium, the reform effects can be divided into two pieces: a direct income effect and bargaining power effect. The data support the existence of these two different effects

As reformas da previdência no Brasil e o equilíbrio e atuarial dos Regimes Próprios de Previdência Social (RPPS), dos entes federados estaduais da Região Sudeste

O desequilíbrio das contas públicas, notadamente em relação à previdência do servidor público no Brasil, tem levado a buscas constantes de soluções para garantir o custeio do modelo em desenvolvimento. As mudanças estabelecidas nas Reformas da Previdência têm contribuído de forma significativa para diminuir o passivo previdenciário acumulado ao longo dos anos, principalmente nos estados, municípios das capitais e dos demais constituídos antes da promulgação da Carta Magna de 1988. Os estados escolhidos para análise demonstraram desacertos, todavia apresentam resultados promissores para o equilíbrio financeiro e atuarial dos RPPS. A utilização de modelos parecidos aos implementados na América do Sul, para o setor público e privado, apresentam-se inadequados no Brasil para os servidores públicos. Precisamos continuar aprimorando os nossos conhecimentos, buscando novas alternativas que garantam a sustentabilidade e viabilidade do sistema, sem comprometer a capacidade de investimentos dos entes federados

A model of rural conflict : violence and land reform policy in Brazil

In the past ten years the struggle for land in Brazil has taken the shape of invasions of private land by welI organized groups of land less squatters. It is argued in this paper that these invasions and the resulting contlicts are a direct response to the land reform program which has been adopted by the govemment since 1985. which is based on the expropriation of farms and the creation of settlement projects. The set of formal and informal institutions which compromise the land reform program are used as the background for a game-theory model of rural contlicts. T estable implications are derived trom this model with particular emphasis on the etfect of policy variables on violence. These are then tested with panel data at state levei from 1988 to 1995. - It is shown that govemment policy which has the intent of reducing the amount of violence has the opposite etfect of leading to more incentives for contlicts.

Tax reform under fiscal stress: a CGE analysis of the Brazilian tax reform

In spite of a general agreement over the distortion imposed by the current Brazilian tax system, attempts to reform it during the last decade have faced several restrictions to its implementation. Two of these restrictions were particular binding: a) fiscal adjustment restriction (public sector debt cannot increase), b) fiscal federalist restriction (revenues from individual states and municipalities cannot decrease). This paper focuses on a specific reform that overcomes in principle the fiscal federalist restriction. Using Auerbach and Kotlikoff (1987) model calibrated for the Brazilian economy, I analyze the short and long run macroeconomic effects of this reform subject to the fiscal adjustment restriction. Finally, I look at the redistributive effects of this reform among generations as a way to infer about public opinion’s reaction to the reform. The reform consists basically of replacing indirect taxes on corporate revenues, which I show to be equivalent to a symmetric tax on labor and capital income, by a new federal VAT. The reform presented positive macroeconomic effects both in the short and long run. Despite a substantial increase in the average VAT rate in the first years after the reform, a majority of cohorts experienced an increase in their lifetime welfare, being potentially in favour of the reform.

A pension manager’s view of exchange traded funds from São Paulo to Santiago

This paper examines the current Chilean and Brazilian pension markets, how these pension markets are structured, how they have historically invested their portfolios in ETFs and how they utilize Exchange Traded Funds (ETFs). This investigation will give an overview of the current pension landscape in each country, ETFs and ETF managers in the region, as well as distribution allowances and regulations for ETF providers within the region. Finally it will offer insights throughout that will be useful to those building a business or creating an expansion plan in Brazil or Chile.

Creditor's protection and bank loans: lack of competition hamprers bankruptcy reform's effects

This dissertation investigates how credit institutions’ market power limits the effects of creditor protection rules on the interest rate and the spread of bank loans. We use the Brazilian Bankruptcy Reform of June/2005 (BBR) as a legal event affecting the institutional environment of the Brazilian credit market. The law augments creditor protection and aims to improve the access of firms to the credit market and to reduce the cost of borrowing. Either access to credit or the credit cost are also determined by bank industry competition and the market power of suppliers of credit. We derive a simple economic model to study the effect of market power interacting with cost of lending. Using an accounting and operations dataset from July/2004 to December/2007 provided by the Brazilian Central Bank, we estimate that the lack of competition in the bank lending industry hinders the potential reducing effect of the BBR on the interest rate of corporate loans by approximately 30% and on the spread by approximately 23%. We also find no statistical evidence that the BBR affected the concentration level of the Brazilian credit market. We present a brief report on bankruptcy reforms around the world, the changes in the Brazilian legislation and on some recent related articles in our introductory chapter. The second chapter presents the economic model and the testable hypothesis on how the lack of competition in the lending market limits the effects of improved creditor protection. In this chapter, we introduce our empirical strategy using a differences-in-differences model and we estimate the limiting effect of market power on the BBR’s potential to reduce interest rates and on the spread of bank loans. We use the BBR as an exogenous event that affects collateralized corporate loans (treatment group) but that does not affect clean consumer loans (control group) to identify these effects, using different concentration measures. In Chapter 3, we propose a two-stage empirical strategy to handle the H–Statistics proposed by Panzar and Rosse as a measure of market competition. We estimate the limiting effects of the lack of competition in replacing the concentration statistics by the H–Statistics. Chapter 4 presents a structural break test of the concentration index and checks if the BBR affects the dynamic evolution of the concentration index.

Regulatory reform in the brazilian railway sector and concession valuation: a preliminary assessment

Trabalho apresentado na 4th Conference on the Regulation of Infrastructures