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%.

Long-term risk of incident type 2 diabetes and measures of overall and regional obesity: the EPIC-InterAct case-cohort study

BACKGROUND Waist circumference (WC) is a simple and reliable measure of fat distribution that may add to the prediction of type 2 diabetes (T2D), but previous studies have been too small to reliably quantify the relative and absolute risk of future diabetes by WC at different levels of body mass index (BMI). METHODS AND FINDINGS The prospective InterAct case-cohort study was conducted in 26 centres in eight European countries and consists of 12,403 incident T2D cases and a stratified subcohort of 16,154 individuals from a total cohort of 340,234 participants with 3.99 million person-years of follow-up. We used Prentice-weighted Cox regression and random effects meta-analysis methods to estimate hazard ratios for T2D. Kaplan-Meier estimates of the cumulative incidence of T2D were calculated. BMI and WC were each independently associated with T2D, with WC being a stronger risk factor in women than in men. Risk increased across groups defined by BMI and WC; compared to low normal weight individuals (BMI 18.5-22.4 kg/m(2)) with a low WC (<94/80 cm in men/women), the hazard ratio of T2D was 22.0 (95% confidence interval 14.3; 33.8) in men and 31.8 (25.2; 40.2) in women with grade 2 obesity (BMI≥35 kg/m(2)) and a high WC (>102/88 cm). Among the large group of overweight individuals, WC measurement was highly informative and facilitated the identification of a subgroup of overweight people with high WC whose 10-y T2D cumulative incidence (men, 70 per 1,000 person-years; women, 44 per 1,000 person-years) was comparable to that of the obese group (50-103 per 1,000 person-years in men and 28-74 per 1,000 person-years in women). CONCLUSIONS WC is independently and strongly associated with T2D, particularly in women, and should be more widely measured for risk stratification. If targeted measurement is necessary for reasons of resource scarcity, measuring WC in overweight individuals may be an effective strategy, since it identifies a high-risk subgroup of individuals who could benefit from individualised preventive action.

Kaposi sarcoma incidence in the Swiss HIV Cohort Study before and after highly active antiretroviral therapy.

Between 1984 and 2006, 12 959 people with HIV/AIDS (PWHA) in the Swiss HIV Cohort Study contributed a total of 73 412 person-years (py) of follow-up, 35 551 of which derived from PWHA treated with highly active antiretroviral therapy (HAART). Five hundred and ninety-seven incident Kaposi sarcoma (KS) cases were identified of whom 52 were among HAART users. Cox regression was used to estimate hazard ratios (HR) and corresponding 95% confidence intervals (CI). Kaposi sarcoma incidence fell abruptly in 1996-1998 to reach a plateau at 1.4 per 1000 py afterwards. Men having sex with men and birth in Africa or the Middle East were associated with KS in both non-users and users of HAART but the risk pattern by CD4 cell count differed. Only very low CD4 cell count (<50 cells microl(-1)) at enrollment or at HAART initiation were significantly associated with KS among HAART users. The HR for KS declined steeply in the first months after HAART initiation and continued to be low 7-10 years afterwards (HR, 0.06; 95% CI, 0.02-0.17). Thirty-three out of 52 (63.5%) KS cases among HAART users arose among PWHA who had stopped treatment or used HAART for less than 6 months.

Social inequalities and mortality in Europe-results from a large multi-national cohort

BACKGROUND Socio-economic inequalities in mortality are observed at the country level in both North America and Europe. The purpose of this work is to investigate the contribution of specific risk factors to social inequalities in cause-specific mortality using a large multi-country cohort of Europeans. METHODS A total of 3,456,689 person/years follow-up of the European Prospective Investigation into Cancer and Nutrition (EPIC) was analysed. Educational level of subjects coming from 9 European countries was recorded as proxy for socio-economic status (SES). Cox proportional hazard model's with a step-wise inclusion of explanatory variables were used to explore the association between SES and mortality; a Relative Index of Inequality (RII) was calculated as measure of relative inequality. RESULTS Total mortality among men with the highest education level is reduced by 43% compared to men with the lowest (HR 0.57, 95% C.I. 0.52-0.61); among women by 29% (HR 0.71, 95% C.I. 0.64-0.78). The risk reduction was attenuated by 7% in men and 3% in women by the introduction of smoking and to a lesser extent (2% in men and 3% in women) by introducing body mass index and additional explanatory variables (alcohol consumption, leisure physical activity, fruit and vegetable intake) (3% in men and 5% in women). Social inequalities were highly statistically significant for all causes of death examined in men. In women, social inequalities were less strong, but statistically significant for all causes of death except for cancer-related mortality and injuries. DISCUSSION In this European study, substantial social inequalities in mortality among European men and women which cannot be fully explained away by accounting for known common risk factors for chronic diseases are reported.

Effect of carbohydrate overfeeding on whole body and adipose tissue metabolism in humans.

OBJECTIVE: To evaluate the effect of a 4-day carbohydrate overfeeding on whole body net de novo lipogenesis and on markers of de novo lipogenesis in subcutaneous adipose tissue of healthy lean humans. RESEARCH METHODS AND PROCEDURES: Nine healthy lean volunteers (five men and four women) were studied after 4 days of either isocaloric feeding or carbohydrate overfeeding. On each occasion, they underwent a metabolic study during which their energy expenditure and net substrate oxidation rates (indirect calorimetry), and the fractional activity of the pentose-phosphate pathway in subcutaneous adipose tissue (subcutaneous microdialysis with 1,6(13)C2,6,6(2)H2 glucose) were assessed before and after administration of glucose. Adipose tissue biopsies were obtained at the end of the experiments to monitor mRNAs of key lipogenic enzymes. RESULTS: Carbohydrate overfeeding increased basal and postglucose energy expenditure and net carbohydrate oxidation. Whole body net de novo lipogenesis after glucose loading was markedly increased at the expense of glycogen synthesis. Carbohydrate overfeeding also increased mRNA levels for the key lipogenic enzymes sterol regulatory element-binding protein-1c, acetyl-CoA carboxylase, and fatty acid synthase. The fractional activity of adipose tissue pentose-phosphate pathway was 17% to 22% and was not altered by carbohydrate overfeeding. DISCUSSION: Carbohydrate overfeeding markedly increased net de novo lipogenesis at the expense of glycogen synthesis. An increase in mRNAs coding for key lipogenic enzymes suggests that de novo lipogenesis occurred, at least in part, in adipose tissue. The pentose-phosphate pathway is active in adipose tissue of healthy humans, consistent with an active role of this tissue in de novo lipogenesis.

Iodine intakes of 100-300 μg/d do not modify thyroid function and have modest anti-inflammatory effects.

Little information is available as to whether doses of iodide similar to those recommended in clinical practice for the prevention of iodine deficiency in pregnant women affect thyroid function. The aim of the present study was to analyse whether doses of iodide can affect thyroid function in adults, and evaluate its effect on plasma markers of oxidative stress, inflammation and acute-phase proteins. A total of thirty healthy volunteers (ten men and twenty women) with normal thyroid function were randomly assigned to three groups (n 10). Each group received a daily dose of 100, 200 or 300 μg of iodide in the form of KI for 6 months. Free tetraiodothyronine (FT4) levels at day 60 of the study were higher in the groups treated with 200 and 300 μg (P = 0·01), and correlated with the increase in urinary iodine (r 0·50, P = 0·007). This correlation lost its significance after adjustment for the baseline FT4. The baseline urinary iodine and FT4 correlated positively with the baseline glutathione peroxidase. On day 60, urinary iodine correlated with C-reactive protein (r 0·461, P = 0·018), and free triiodothyronine correlated with IL-6 (r - 0·429, P = 0·025). On day 60, the changes produced in urinary iodine correlated significantly with the changes produced in α1-antitrypsin (r 0·475, P = 0·014) and ceruloplasmin (r 0·599, P = 0·001). The changes in thyroid-stimulating hormone correlated significantly with the changes in α1-antitrypsin (r - 0·521, P = 0·005) and ceruloplasmin (r - 0·459, P = 0·016). In conclusion, the administration of an iodide supplement between 100 and 300 μg/d did not modify thyroid function in a population with adequate iodine intake. The results also showed a slight anti-inflammatory and antioxidative action of iodide.

Higher red blood cell distribution width is associated with a worse virologic and clinical situation in HIV-infected patients.

Background A high level of red blood cell distribution width (RDW) is a novel prognostic marker that may reflect an underlying inflammatory state. It has recently shown that when increased, it is related to cardiovascular disease, mortality, and metabolic syndrome (MetS) in the general population. Objectives To analyse the potential relation between high levels of RDW and cardiovascular risk (CVR) and MetS in HIVpatients. Patients and methods Observational, cross-sectional study of a series of HIVoutpatients attended in our Hospital. Demographic, anthropometric, clinical, and fasting lab data were recorded in all cases. CVR at 10 years was evaluated by Framingham equation, and MetS diagnosed according to the National Cholesterol Education Program criteria. Statistic program: SPSS 17.0. Results 666 patients were included, 79.3% were men, and mean age was 44.7 years. Mean CD4 count was 506 cells/ mm3 , 87.5% of the patients were on antiretroviral therapy, and 85.3% had undetectable HIV viral load. Mean RDW was 13.07% (range: 7.7-33.6%; 75th percentile 14,1%), with a prevalence of MetS of 15.7, 9.3, 18.8 and 16.6% first through fourth RDW quartile, and of patients with CVR >20% of 8.4, 4.0, 4.4 and 6.4%, respectively (p>0,05). The highest quartile of RDW (>14.1%) was associated with AIDS (OR 1.6, 95%CI 1.0-2.4; p 0.02), detectable HIV viral load (OR 1.5, 95%CI 1.01-2.4; p 0.04), and hypertension (OR 2.3, 95%CI 1.4-4.0; p 0.001). Conclusions In HIV-infected outpatients, higher RDW is related with detectable HIV viral load and with AIDS. Although it was associated with a traditional CVR factor as hypertension, we found no relation with MetS nor with higher CVR.

Immediate and long-term results of valve replacement for native and prosthetic valve endocarditis.

BACKGROUND: The objective of the present study was to compare current results of prosthetic valve replacement following acute infective native valve endocarditis (NVE) with that of prosthetic valve endocarditis (PVE). Prosthetic valve replacement is often necessary for acute infective endocarditis. Although valve repair and homografts have been associated with excellent outcome, homograft availability and the importance of valvular destruction often dictate prosthetic valve replacement in patients with acute bacterial endocarditis. METHODS: A retrospective analysis of the experience with prosthetic valve replacement following acute NVE and PVE between 1988 and 1998 was performed at the Montreal Heart Institute. RESULTS: Seventy-seven patients (57 men and 20 women, mean age 48 +/- 16 years) with acute infective endocarditis underwent valve replacement. Fifty patients had NVE and 27 had PVE. Four patients (8%) with NVE died within 30 days of operation and there were no hospital deaths in patients with PVE. Survival at 1, 5, and 7 years averaged 80% +/- 6%, 76% +/- 6%, and 76% +/- 6% for NVE and 70% +/- 9%, 59% +/- 10%, and 55% +/- 10% for PVE, respectively (p = 0.15). Reoperation-free survival at 1, 5, and 7 years averaged 80% +/- 6%, 76% +/- 6%, and 76% +/- 6% for NVE and 45% +/- 10%, 40% +/- 10%, and 36% +/- 9% for PVE (p = 0.003). Five-year survival for NVE averaged 75% +/- 9% following aortic valve replacement and 79% +/- 9% following mitral valve replacement. Five-year survival for PVE averaged 66% +/- 12% following aortic valve replacement and 43% +/- 19% following mitral valve replacement (p = 0.75). Nine patients underwent reoperation during follow-up: indications were prosthesis infection in 4 patients (3 mitral, 1 aortic), dehiscence of mitral prosthesis in 3, and dehiscence of aortic prosthesis in 2. CONCLUSIONS: Prosthetic valve replacement for NVE resulted in good long-term patient survival with a minimal risk of reoperation compared with patients who underwent valve replacement for PVE. In patients with PVE, those who needed reoperation had recurrent endocarditis or noninfectious periprosthetic dehiscence.

Do socioeconomic factors shape weight and obesity trajectories over the transition from midlife to old age? Results from the French GAZEL cohort study

BACKGROUND: Obesity is a contemporary epidemic that does not affect all age groups and sections of society equally. OBJECTIVE: The objective was to examine socioeconomic differences in trajectories of body mass index (BMI; in kg/m(2)) and obesity between the ages of 45 and 65 y. DESIGN: A total of 13,297 men and 4532 women from the French GAZEL (Gaz de France Electricité de France) cohort study reported their height in 1990 and their weight annually over the subsequent 18 y. Changes in BMI and obesity between ages 45 and 49 y, 50 and 54 y, 55 and 59 y, and 60 and 65 y as a function of education and occupational position (at age 35 y) were modeled by using linear mixed models and generalized estimating equations. RESULTS: BMI and obesity rates increased between the ages of 45 and 65 y. In men, BMI was higher in unskilled workers than in managers at age 45 y; this difference in BMI increased from 0.82 (95% CI: 0.66, 0.99) at 45 y to 1.06 (95% CI: 0.85, 1.27) at 65 y. Men with a primary school education compared with those with a high school degree at age 45 y had a 0.75 (95% CI: 0.51, 1.00) higher BMI, and this difference increased to 1.32 (95% CI: 1.03,1.62) at age 65 y. Obesity rates were 3.35% and 7.68% at age 45 y and 9.52% and 18.10% at age 65 y in managers and unskilled workers, respectively; the difference in obesity increased by 4.25% (95% CI: 1.87, 6.52). A similar trend was observed in women. Conclusions: Weight continues to increase in the transition between midlife and old age; this increase is greater in lower socioeconomic groups.

Meat consumption and mortality - results from the European Prospective Investigation into Cancer and Nutrition.

BACKGROUND Recently, some US cohorts have shown a moderate association between red and processed meat consumption and mortality supporting the results of previous studies among vegetarians. The aim of this study was to examine the association of red meat, processed meat, and poultry consumption with the risk of early death in the European Prospective Investigation into Cancer and Nutrition (EPIC). METHODS Included in the analysis were 448,568 men and women without prevalent cancer, stroke, or myocardial infarction, and with complete information on diet, smoking, physical activity and body mass index, who were between 35 and 69 years old at baseline. Cox proportional hazards regression was used to examine the association of meat consumption with all-cause and cause-specific mortality. RESULTS As of June 2009, 26,344 deaths were observed. After multivariate adjustment, a high consumption of red meat was related to higher all-cause mortality (hazard ratio (HR) = 1.14, 95% confidence interval (CI) 1.01 to 1.28, 160+ versus 10 to 19.9 g/day), and the association was stronger for processed meat (HR = 1.44, 95% CI 1.24 to 1.66, 160+ versus 10 to 19.9 g/day). After correction for measurement error, higher all-cause mortality remained significant only for processed meat (HR = 1.18, 95% CI 1.11 to 1.25, per 50 g/d). We estimated that 3.3% (95% CI 1.5% to 5.0%) of deaths could be prevented if all participants had a processed meat consumption of less than 20 g/day. Significant associations with processed meat intake were observed for cardiovascular diseases, cancer, and 'other causes of death'. The consumption of poultry was not related to all-cause mortality. CONCLUSIONS The results of our analysis support a moderate positive association between processed meat consumption and mortality, in particular due to cardiovascular diseases, but also to cancer.

Risk of type 2 diabetes according to traditional and emerging anthropometric indices in Spain, a Mediterranean country with high prevalence of obesity: results from a large-scale prospective cohort study.

Background: Obesity is a major risk factor for type 2 diabetes mellitus (T2DM). A proper anthropometric characterisation of T2DM risk is essential for disease prevention and clinical risk assessement. Methods: Longitudinal study in 37 733 participants (63% women) of the Spanish EPIC (European Prospective Investigation into Cancer and Nutrition) cohort without prevalent diabetes. Detailed questionnaire information was collected at baseline and anthropometric data gathered following standard procedures. A total of 2513 verified incident T2DM cases occurred after 12.1 years of mean follow-up. Multivariable Cox regression was used to calculate hazard ratios of T2DM by levels of anthropometric variables. Results: Overall and central obesity were independently associated with T2DM risk. BMI showed the strongest association with T2DM in men whereas waist-related indices were stronger independent predictors in women. Waist-to-height ratio revealed the largest area under the ROC curve in men and women, with optimal cut-offs at 0.60 and 0.58, respectively. The most discriminative waist circumference (WC) cut-off values were 99.4 cm in men and 90.4 cm in women. Absolute risk of T2DM was higher in men than women for any combination of age, BMI and WC categories, and remained low in normal-waist women. The population risk of T2DM attributable to obesity was 17% in men and 31% in women. Conclusions: Diabetes risk was associated with higher overall and central obesity indices even at normal BMI and WC values. The measurement of waist circumference in the clinical setting is strongly recommended for the evaluation of future T2DM risk in women.

Fat-free mass index and fat mass index percentiles in Caucasians aged 18-98 y.

OBJECTIVE: To determine reference values for fat-free mass index (FFMI) and fat mass index (FMI) in a large Caucasian group of apparently healthy subjects, as a function of age and gender and to develop percentile distribution for these two parameters. DESIGN: Cross-sectional study in which bioelectrical impedance analysis (50 kHz) was measured (using tetrapolar electrodes and cross-validated formulae by dual-energy X-ray absorptiometry in order to calculate FFMI (fat-free mass/height squared) and FMI (fat mass/height squared). SUBJECTS: A total of 5635 apparently healthy adults from a mixed non-randomly selected Caucasian population in Switzerland (2986 men and 2649 women), varying in age from 24 to 98 y. RESULTS: The median FFMI (18-34 y) were 18.9 kg/m(2) in young males and 15.4 kg/m(2) in young females. No difference with age in males and a modest increase in females were observed. The median FMI was 4.0 kg/m(2) in males and 5.5 kg/m(2) in females. From young to elderly age categories, FMI progressively rose by an average of 55% in males and 62% in females, compared to an increase in body mass index (BMI) of 9 and 19% respectively. CONCLUSIONS: Reference intervals for FFMI and FMI could be of practical value for the clinical evaluation of a deficit in fat-free mass with or without excess fat mass (sarcopenic obesity) for a given age category, complementing the classical concept of body mass index (BMI) in a more qualitative manner. In contrast to BMI, similar reference ranges seems to be utilizable for FFMI with advancing age, in particular in men.

Alcohol consumption and social inequality at the individual and country levels--results from an international study.

BACKGROUND: International comparisons of social inequalities in alcohol use have not been extensively investigated. The purpose of this study was to examine the relationship of country-level characteristics and individual socio-economic status (SES) on individual alcohol consumption in 33 countries. METHODS: Data on 101,525 men and women collected by cross-sectional surveys in 33 countries of the GENACIS study were used. Individual SES was measured by highest attained educational level. Alcohol use measures included drinking status and monthly risky single occasion drinking (RSOD). The relationship between individuals' education and drinking indicators was examined by meta-analysis. In a second step the individual level data and country data were combined and tested in multilevel models. As country level indicators we used the Purchasing Power Parity of the gross national income, the Gini coefficient and the Gender Gap Index. RESULTS: For both genders and all countries higher individual SES was positively associated with drinking status. Also higher country level SES was associated with higher proportions of drinkers. Lower SES was associated with RSOD among men. Women of higher SES in low income countries were more often RSO drinkers than women of lower SES. The opposite was true in higher income countries. CONCLUSION: For the most part, findings regarding SES and drinking in higher income countries were as expected. However, women of higher SES in low and middle income countries appear at higher risk of engaging in RSOD. This finding should be kept in mind when developing new policy and prevention initiatives.

Investigation of memory, executive functions, and anatomic correlates in asymptomatic FMR1 premutation carriers.

Fragile X-associated tremor/ataxia syndrome (FXTAS) is a late-onset movement disorder associated with FMR1 premutation alleles. Asymptomatic premutation (aPM) carriers have preserved cognitive functions, but they present subtle executive deficits. Current efforts are focusing on the identification of specific cognitive markers that can detect aPM carriers at higher risk of developing FXTAS. This study aims at evaluating verbal memory and executive functions as early markers of disease progression while exploring associated brain structure changes using diffusion tensor imaging. We assessed 30 aPM men and 38 intrafamilial controls. The groups perform similarly in the executive domain except for decreased performance in motor planning in aPM carriers. In the memory domain, aPM carriers present a significant decrease in verbal encoding and retrieval. Retrieval is associated with microstructural changes of the white matter (WM) of the left hippocampal fimbria. Encoding is associated with changes in the WM under the right dorsolateral prefrontal cortex, a region implicated in relational memory encoding. These associations were found in the aPM group only and did not show age-related decline. This may be interpreted as a neurodevelopmental effect of the premutation, and longitudinal studies are required to better understand these mechanisms.

Performing masculinity, influencing health: a qualitative mixed-methods study of young Spanish men

Background: The literature shows how gender mandates contribute to differences in exposure and vulnerability to certain health risk factors. This paper presents the results of a study developed in the south of Spain, where research aimed at understanding men from a gender perspective is still limited. Objective: The aim of this paper is to explore the lay perceptions and meanings ascribed to the idea of masculinity, identifying ways in which gender displays are related to health. Design: The study is based on a mixed-methods data collection strategy typical of qualitative research. We performed a qualitative content analysis focused on manifest and latent content. Results: Our analysis showed that the relationship between masculinity and health was mainly defined with regard to behavioural explanations with an evident performative meaning. With regard to issues such as driving, the use of recreational drugs, aggressive behaviour, sexuality, and body image, important connections were established between manhood acts and health outcomes. Different ways of understanding and performing the male identity also emerged from the results. The findings revealed the implications of these aspects in the processes of change in the identity codes of men and women. Conclusions: The study provides insights into how the category ‘man’ is highly dependent on collective practices and performative acts. Consideration of how males perform manhood acts might be required in guidance on the development of programmes and policies aimed at addressing gender inequalities in health in a particular local context.