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%.

Compliance with dietary and nutrient recommendations in the European Prospective Investigation into Cancer and Nutrition (EPIC)-Granada cohort at recruitment

BACKGROUND: The overall intake of energy and nutrients in the Granada EPIC-cohort (European Prospective Investigation into Cancer and Nutrition) is examined in order to assess compliance with the Spanish Nutritional Objectives (NO) and the Recommended Intakes (RI). METHODS: During recruitment (1992-1996), 7,789 participants, aged 35-69, were asked about diet through a validated diet history questionnaire. Nutrient intake is compared to the NO and RI that were valid at that time. Risk of inadequate intake is estimated as the percentage of the sample with intakes: ≤ 1/3 RI (high risk), ≤ 2/3 RI- > 1/3 RI (moderate risk), ≤ RI- > 2/3 RI, > RI. Differences in intakes have been analyzed by sex and age, and by smoking status and BMI. RESULTS: The daily intake of nutrients did not meet the NO as the total contribution of energy from proteins and fats exceeded these guidelines. Whilst intake of most nutrients was above the RI, the amount of iron, magnesium and vitamins D and E provided by the diet was not enough to meet the RI: in women aged 20-49 years, about 55% were at moderate risk for iron inadequacy, and a 20% of women for magnesium. Both sexes were at high risk of inadequacy for vitamin D, although sunlight exposure may supply adequate amounts. Never smokers showed a higher compliance to the NO. CONCLUSION: At recruitment, the nutrient profile of the diet was unbalanced. The observed nutrient inadequacy for iron, magnesium and vitamin E might be attributed to inappropriate dietary habits, and may have implications for future disease risk.

Compliance with guidelines-recommended processes in pneumonia: impact of health status and initial signs

Initial care has been associated with improved survival of community-acquired pneumonia (CAP). We aimed to investigate patient comorbidities and health status measured by the Charlson index and clinical signs at diagnosis associated with adherence to recommended processes of care in CAP. We studied 3844 patients hospitalized with CAP. The evaluated recommendations were antibiotic adherence to Spanish guidelines, first antibiotic dose <6 hours and oxygen assessment. Antibiotic adherence was 72.6%, first dose <6 h was 73.4% and oxygen assessment was 90.2%. Antibiotic adherence was negatively associated with a high Charlson score (Odds ratio [OR], 0.91), confusion (OR, 0.66) and tachycardia ≥100 bpm (OR, 0.77). Delayed first dose was significantly lower in those with tachycardia (OR, 0.75). Initial oxygen assessment was negatively associated with fever (OR, 0.61), whereas tachypnea ≥30 (OR, 1.58), tachycardia (OR, 1.39), age >65 (OR, 1.51) and COPD (OR, 1.80) were protective factors. The combination of antibiotic adherence and timing <6 hours was negatively associated with confusion (OR, 0.69) and a high Charlson score (OR, 0.92) adjusting for severity and hospital effect, whereas age was not an independent factor. Deficient health status and confusion, rather than age, are associated with lower compliance with antibiotic therapy recommendations and timing, thus identifying a subpopulation more prone to receiving lower quality care.

Condition-dependent genetic benefits of extrapair fertilization in female blue tits Cyanistes caeruleus.

In many socially monogamous birds, both partners perform extrapair copulations (EPC). As this behaviour potentially inflicts direct costs on females, they are currently hypothesized to search for genetic benefits for descendants, either as 'good' or 'complementary' genes. Although these hypotheses have found some support, several studies failed to find any beneficial consequence of EPC, and whether this behaviour is adaptive to females is subject to discussion. Here, we test these two hypotheses in a natural population of blue tits by accounting for the effect of most parameters known to potentially affect extrapair fertilization. Results suggest that female body mass affected the type of extrapair genetic benefits obtained. Heavy females obtained extrapair fertilizations when their social male was of low quality (as reflected by sexual display) and produced larger extrapair than within-pair chicks. Lean females obtained extrapair fertilizations when their social mate was genetically similar, thereby producing more heterozygous extrapair chicks. Our results suggest that mating patterns may be condition-dependent.

Unanswered clinical questions in the management of cardiometabolic risk in the elderly: a statement of the Spanish society of internal medicine.

BACKGROUND Despite the progressive increase in life expectancy and the relationship between aging with multi-morbidities and the increased use of healthcare resources, current clinical practice guidelines (CPG) on cardiometabolic risk cannot be adequately applied to elderly subjects with multiple chronic conditions. Its management frequently becomes complicated by both, an excessive use of medications that may lead to overtreatment, drug interactions and increased toxicity, and errors in dosage and non-compliance. Concerned by this gap, the Spanish Society of Internal Medicine created a group of independent experts on cardiometabolic risk who discussed what they considered to be unanswered questions in the management of elderly patients. DISCUSSION Current guidelines do not specifically address the problem of elderly with multiple chronic conditions. For this reason, the combined use of the limited available evidence, clinical experience and common sense, could all help us to address this unmet need. In very old people, life expectancy and functionality are the most important factors for guiding potential treatments. Their higher propensity to develop serious adverse events and their shorter lifespan could prevent them from obtaining the potential benefits of the interventions administered. SUMMARY In this document, experts on cardiometabolic risk factors have established a number of consensual recommendations that have taken into account international guidelines and clinical experience, and have also considered the more effective use of healthcare resources. This document is intended to provide general recommendations for clinicians and to promote the effective use of procedures and medications.

Smoking offsets the metabolic benefits of parental longevity in women : the CoLaus study

Rapport de synthèse : Objectif: nous avons regardé si les sujets dont les parents vivaient plus longtemps présentaient des niveaux plus faibles de facteurs de risques cardiovasculaires, y compris pour le syndrome métabolique. Méthodes: nous avons analysé les données d'un échantillon représentatif de la population suisse (1163 hommes et 1398 femmes) âgé de 55 à 75 ans, de la ville de Lausanne. Les participants ont été stratifiés par nombre de parents (0, 1, 2) qui ont vécu jusqu'à 85 ans ou plus. Les associations entre la longévité parentale et les facteurs de risques cardiovasculaires ou les variables métaboliques associées ont été analysées au moyen de régressions linéaires multiples. Résultats: la prévalence ajustée pour l'âge du syndrome métabolique varie de 24.8%, 20.5% à 13.8% chez les femmes (P<0.05) et de 28.8%, 32.1 % à 27.6% chez les hommes (non significatif) pour 0, 1 et 2 parents à forte longévité. L'association entre la longévité parentale et la prévalence du syndrome métabolique est particulièrement forte pour les femmes qui n'ont jamais fumé. Dans ce groupe, les femmes qui ont 2 parents à forte longévité ont un BMI plus faible et un tour de taille moins grand. Chez les gens qui n'ont jamais fumé, pour les deux sexes, les niveaux moyens (95% d'intervalle de confiance) et ajustés de cholestéro-HDL étaient de 1.64(1.61-1.67), 1.67(1.65-1.70) et 1.71(1.65-1.76) mmol/L pour 0, 1 et 2 parents à forte longévité (P<0.01), respectivement. La tendance n'était pas significative chez les anciens fiuneurs et fumeurs actuels. Conclusions: la longévité parentale est associée à un meilleur profil métabolique chez les femmes, mais pas chez les hommes. Les avantages métaboliques du fait d'avoir des parents âgés sont fortement atténués par le tabagisme.

The efficiency of direct payments versus tax reductions under uncertainty

This paper analyzes the optimal behavior of farmers in the presence of direct payments and uncertainty. In an empirical analysis for Switzerland, it confirms previously obtained theoretical results and determines the magnitude of the theoretical predicted effects. The results show that direct payments increase agricultural production between 3.7% to 4.8%. Alternatively to direct payments, the production effect of tax reductions is evaluated in order to determine its magnitude. The empirical analysis corroborates the theoretical results of the literature and demonstrates that tax reductions are also distorting, but to a substantially lesser degree if losses are not offset. However, tax reductions, independently whether losses are offset or not, lead to higher government spending than pure direct payments

Dépistage du cancer du sein par l'examen physique: qui en bénéficie? [Physical examination in screening for breast cancer: who benefits?].

A survey was undertaken among a representative sample of the female population, aged 20 to 74, of the Canton of Vaud, Switzerland (total population 550,000) to assess the knowledge, attitudes and practices of women in respect to breast cancer and its prevention. The present study focuses on access by women to medical preventive measures (breast examination by physician and information on breast self-examination). The data are analyzed in relation to the individual risk factors affecting women, in particular age. While with age the risk of breast cancer grows in a linear fashion, the proportion of women having their breast examined by a physician declines. Women over 50 who had no children before the age of 30 constitute an especially high risk category, with the lowest access to information and prevention. This is explained in large part by the fact that they consult gynecologists less often. In this regard it should be noted that a visit to a gynecologist's office is associated much more often with breast examination than a visit to a family physician. It is important to take such findings into account in providing more appropriate and complete care for those groups. This involves sensitization of the physician and improved information for the women themselves.

CREB-2, a cellular CRE-dependent transcription repressor, functions in association with Tax as an activator of the human T-cell leukemia virus type 1 promoter.

The Tax protein of the human T-cell leukemia virus type 1 (HTLV-1) has been implicated in human T-cell immortalization. The primary function of Tax is to transcriptionally activate the HTLV-1 promoter, but Tax is also known to stimulate expression of cellular genes. It has been reported to associate with several transcription factors, as well as proteins not involved in transcription. To better characterize potential cellular targets of Tax present in infected cells, a Saccharomyces cerevisiae two-hybrid screening was performed with a cDNA library constructed from the HTLV-1-infected MT2 cell line. From this study, we found 158 positive clones representing seven different cDNAs. We focused our attention on the cDNA encoding the transcription factor CREB-2. CREB-2 is an unconventional member of the ATF/CREB family in that it lacks a protein kinase A (PKA) phosphorylation site and has been reported to negatively regulate transcription from the cyclic AMP response element of the human enkephalin promoter. In this study, we demonstrate that CREB-2 cooperates with Tax to enhance viral transcription and that its basic-leucine zipper C-terminal domain is required for both in vitro and in vivo interactions with Tax. Our results confirm that the activation of the HTLV-1 promoter through Tax and factors of the ATF/CREB family is PKA independent.

Tax incentives and direct support for R&D: What do firms use and why?

This paper studies whether firms' use of R&D subsidies and R&D tax incentives is correlated to two sources of underinvestment in R&D, financing constraints and appropriability. We find that financially constrained SMEs are less likely to use R&D tax credits and more likely to obtain subsidies. SMEs using legal methods to protect their intellectual property are more likely to use tax incentives. Results are ambiguous for large firms. For both having previous experience in R&D increases the likelihood of using tax incentives, while it reduces the likelihood of using exclusively subsidies, suggesting that the latter induce entry into R&D. Results imply that direct funding and tax credits do not have the same ability to address each source of R&D underinvestment, and that on average subsidies may be better suited than tax credits at least for SMEs. From a policy perspective these tools may be complements rather than substitutes.

Bénéfices de l'utilisation d'un test VIH rapide à la permanence PMU-FLON [Benefits of using rapid HIV testing at the PMU-FLON walk-in clinic in Lausanne].

Lab tests are frequently used in primary care to guide patient care. This is particularly the case when a severe disorder, or one that will affect patients' initial care, needs to be excluded rapidly. At the PMU-FLON walk-in clinic the use of HIV testing as recommended by the Swiss Office of Public Health was hampered by the delay in obtaining test results. This led us to introduce rapid HIV testing which provides results within 30 minutes. Following the first 250 tests the authors discuss the results as well as the benefits of rapid HIV testing in an urban walk-in clinic.