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https://www.grape.org.pl/sites/default/files/user/cv_0.pdf

https://www.grape.org.pl/sites/default/files/user/cv_ang_0.pdf

Opublikowane | Published

  • Raising America's future: search for optimal child-related transfers | Economic Modelling

    The US differs from other OECD countries in terms of family policy size and composition. This study examines the welfare and macroeconomic effects of family policy reforms. I explore three policy instruments: child-related tax credits, child care subsidies, and child allowances. The children are merit good due to PAYG social security structure. I show that expanding family policy, similar to the American Rescue Plan, enhances welfare. I also characterize the optimal family policy for the US. It accounts for about 3% of GDP, three times larger than the existing policy, and primarily focused on child-care subsidies. The structure of family policy is vital for welfare evaluation, as similar expenditure levels can lead to contrasting welfare outcomes depending on policy composition. This study underscores the importance of carefully designed family policies, highlighting the need for ongoing research and policy innovation to maximize societal benefits and promote equitable economic growth.

    Oliwia
    Komada
  • Welfare effects of fiscal policy in reforming the pension system | Journal of Economic Dynamics and Control

    Pension system reforms imply substantial redistribution between cohorts and within cohorts. They also implicitly affect the scope of risk sharing in societies. Linking pensions to individual incomes increases efficiency but reduces the insurance motive implicit in Beveridgean systems. The existing view in the literature argues that the insurance motive dominates the efficiency gains when evaluating the welfare effects. We show that this result is not universal: there exist ways to increase efficiency or compensate the loss of insurance, assuring welfare gains from pension system reform even in economies with uninsurable idiosyncratic income shocks. The fiscal closure, which necessarily accompanies the changes in the pension system, may boost efficiency and/or make up for lower insurance in the pension system. Indeed, fiscal closures inherently interact with the effects of pension system reform, counteracting or reinforcing the original effects. By analyzing a variety of fiscal closures, we reconcile our result with the earlier literature. We also study the political economy context and show that political support is feasible depending on the fiscal closure.

    Joanna
    Tyrowicz
    Krzysztof
    Makarski
    Oliwia
    Komada
  • Political (in)stability of funded pension systems | Journal of Economic Dynamics and Control

    We analyze the political stability social security reforms which introduce a funded pillar (a.k.a. privatizations). We consider an economy populated by overlapping generations and intra-cohort heterogeneity, which introduces a funded pillar. This reform is efficient in Kaldor-Hicks sense and has political support. Subsequently, agents vote on abolishing the funded system, capturing the accumulated pension wealth, and replacing it with the pay-as-you-go scheme, i.e. “unprivatizing” the pension system. We show that even if such reform reduces welfare in the long run, the distribution of benefits across cohorts along the transition path implies that “unprivatizing” social security is always politically favored. We conclude that property rights definition over retirement savings may be of crucial importance for determining the stability of retirement systems with a funded pillar. 


    Some ideas underlying this paper were originally started as a part of MODELLING project, but with the time, it evolved in terms of research question. Now, it has a new theoretical setup, and it features heterogeneous agents framework.


    The full replication package may be found in this GitHub repository.

    Joanna
    Tyrowicz
    Krzysztof
    Makarski
    Oliwia
    Komada
  • The importance of family: a macroeconomic perspective | Pensions today - economic, managerial, and social issues (book chapter)

    Plenty of economic phenomena cannot be explained in the absence of family structure. For example, the immense changes in women's labor force participation are strongly affected by family structure: married women work less than single, and mothers work less than childless women (Greenwood et al. 2017). A significant share of these differences is a result of the family-specific design of tax and social security systems (Borella et al. 2019). Family structure is also a natural framework for studying intergenerational mobility and parent-child correlations. More and more macroeconomics papers reconcile the importance of a family and explicitly model decisions within the household. In this paper, we propose a systematic overview of this stream of literature.

    We are not the first ones to review family economics in the context of macroeconomics, e.g. Browning et al. (2014). Doepke and Tertilt (2016) provide an excellent summary of advances in family economics and its successes in explaining classic macroeconomics phenomena. We extend their study by focusing on family-dependent policy interventions, the joint aspect of taxation, and the impact of labor market structure on fertility. What is more, an outstanding guideline of family economics models by Greenwood et al. (2017) pointed out several remaining research questions – concerning childcare subsidies, fertility policies, taxation, and within-family insurance. We prove that many of them have already received a satisfactory empirical and theoretical answer.

    The definition of family differs substantially across macroeconomics literature. However, we can systematize these definitions using two dimensions: the household structure and decision process. We can distinguish two types of households: the first consists of the parent(s) and child(ren), the second consists of husband and wife. The latter fits analyzing gender inequality, unequal tax treatment, or family-dependent components of social security. The parent(s) and child(ren) family structure is the most common and helps explaining human capital accumulation, inequality, and fertility decisions. Both setups are employed to study different drivers of women's labor force participation.

    In terms of the decision-making process, we can distinguish unitary households and households based on game-theoretic bargaining models. The members of the unitary household maximize the so-called household utility function, which describes the joint interests of all household members under aggregated budget constraint. However, the formation, as well as the dissolution of a partnership, usually require decisions of the individuals involved. Thus, it always contains the possibility of conflict. Bargaining models better reflect this feature and describe household behavior as the cooperation of utility-maximizing individuals. Despite that, the unitary household is a typical framework, even in recent literature. Models with bargaining are mostly used to describe the formation and stability of marriage and recently to analyze fertility decisions.

    In the following part of the paper, we review both macroeconomics and family economics literature in the context of labor force participation, fertility choice, human capital accumulation, inequality and taxes, and social security. Depending on the policy in question, the literature proposes models with significantly different structures and features, e.g., types of heterogeneity, choice set, applied utility functions, and model timing. All of them contribute to the mechanism of the model and its fit to the data (Borella et al. 2018). We discuss below different model setups, with particular caution to policies' welfare effect. In this way, we provide a method guideline useful for future research.

    This chapter is a part of volume "Pensions today - economic, managerial, and social issues" edited by Filip Chybalski and Edyta Marcinkiewicz.

    Oliwia
    Komada
    Magda
    Malec
  • A regression discontinuity evaluation of reducing early retirement eligibility in Poland | International Journal of Manpower

    The reform introduced in Poland in 2009 substantially and abruptly reduced the number of workers eligible for early retirement. This paper evaluates the causal effects of this reform on labor force participation and exit to retirement. We use rich rotating panel from the Polish Labor Force Survey and exploit the discontinuity imposed by this reform. We find a statistically significant, but economically small discontinuity at the timing of the reform. The placebo test shows no similar effects in earlier or later quarters, but in a vast majority of specifications the discontinuity is not larger for the treated individuals, i.e. those whose occupation lost eligibility. We interpret these results as follows: the changes in the eligibility criteria were not instrumental in fostering the participation rates among the affected cohort, i.e. the immediate contribution to increased labor force participation of these cohorts is not economically large.

    Joanna
    Tyrowicz
    Oliwia
    Komada
    Paweł
    Strzelecki

W toku | Work in progress

  • Welfare and macroeconomic effects of family policies: insights from an OLG model

    What are the welfare and macroeconomic effects of family policies and how do they depend on policy composition? I answer those questions in overlapping generations model calibrated to the US. I account for the idiosyncratic income risk, redistribution via social security, and tax and benefit system. I explicitly model child-related tax credit, child care subsidies, and child allowance. I show the expansion of the family policy yields higher welfare. The expenditure on the optimal policy accounts for approximately 3% of GDP. Even though the optimal family policy is three times bigger than the status quo policy, taxes decrease when the optimal policy is implemented. Therefore, reform is self-financing. The structure of family policy is crucial for welfare evaluation. Tax credit and child allowance generate higher welfare gains than child care.

    Oliwia
    Komada
  • Progressing towards efficiency: the role for labor tax progression in reforming social security

    We study interactions between the progressive labor tax and the social security reform. Increasing longevity necessitates reforming social security due to raising the fiscal strain on the current systems. The current systems are redistributive, which provides (at least partial) insurance against idiosyncratic income shocks, but at the expense of labor supply distortions. Analogously, linking pensions to individual incomes reduces distortions associated with social security contributions, but ushers insurance loss. The existing view in the literature is that net outcome of such reform is negative. Contrary to this view, we show that progressive labor tax can partially substitute for the insurance loss when social security becomes less redistributive.

    Krzysztof
    Makarski
    Oliwia
    Komada
    Joanna
    Tyrowicz



Systemy emerytalne, Społeczne