Český finanční a účetní časopis 2021(3):41-59 | DOI: 10.18267/j.cfuc.564

Redistributive effects of the Czech pension system – microeconomic approach

Alena Vančurová, Eliška Čejková, Stanislav Klazar
Vysoká škola ekonomická v Praze, Fakulta financí a účetnictví, katedra veřejných financí, Praha

The burning issue within the pension system in the Czech Republic is the level of coverage of self-employed persons. According to the data, they constantly report their income near the level of minimal basis during their lifetime. We estimate the replacement rates, lifetime benefit and lifetime contribution index using updated unique dataset of Assessment Base for Pension Insurance to shed the light on this problem. We can sum up that the income distribution of self-employed persons is highly concentrated, with the peak at the profit level which corresponds with the minimal base for pension contribution. Due to the high degree of the Czech pension system progressivity, the general result is that the self-employed persons are better off in comparisons with the employees if we concentrate on relative measures, but worst off if we concentrate on nominal measures. The only way how to solve this puzzle may be the effective information campaign which will reveal the future level of pensions /replacement rates/ to encourage the self-employed persons to participate in other, broadly defined, pillars of pension system.

Keywords: Income distribution; Employee; Self-employed persons; Pensions; Replacement rate; Redistribution; Solidarity; Progressivity; Lifetime incidence.
JEL classification: D3, D63, E24, H23, H55, J2

Received: October 31, 2021; Revised: November 20, 2021; Accepted: November 21, 2021; Prepublished online: December 1, 2021; Published: December 3, 2021  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Vančurová, A., Čejková, E., & Klazar, S. (2021). Redistributive effects of the Czech pension system – microeconomic approach. Czech Financial and Accounting Journal, 2021(3), 41-59. doi: 10.18267/j.cfuc.564
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. BOZIO, A., BREDA, T., GRENET, J., 2016. Incidence of Social Security Contributions: Evidence from France. 2016. B.m.: Workshop - Incidence and labour market effects of SSCs, London, Paris School of Economics (PSE) and Institut des politiques publiques (IPP).
    2. ČSSZ, 2021. Informativní důchodová aplikace. ePortál ČSSZ. [online] [vid. 14. 11. 2021]. Dostupné z: https://eportal.cssz.cz/-/sluzby/informativni-duchodova-aplikace.
    3. DIAKITE, K., DEVOLDER, P., 2021. Progressive Pension Formula and Life Expectancy Heterogeneity. Risks [online]. Sv. 9, č. 7, s. 127. doi: 10.3390/risks9070127. Go to original source...
    4. NATCEN [NATCEN Social Research], 2021. English Longitudinal Study of Ageing (ELSA) [online]. [vid. 31. 10. 2021]. Dostupné z: http://www.natcen.ac.uk/taking-part/studies-in-field/elsa-50plus-health-and-life/.
    5. GRUBER, J., 1995. The Incidence of Payroll Taxation: Evidence from Chile [online]. Working Paper 5053. B.m.: National Bureau of Economic Research [vid. 29. 10. 2021]. Dostupné z: doi: 10.3386/w5053. Go to original source...
    6. GRUBER, J., 2015. Public Finance and Public Policy. 5. vyd. New York: Worth Publishers.
    7. HOLUB, M., 2008. Nepříspěvkové doby v důchodovém systému ČR - opomíjený prvek transformace důchodového systému [online]. Disertační práce. Praha: Vysoká škola ekonomická v Praze [vid. 29. 10. 2021]. Dostupné z: https://theses.cz/id/fv48k8/#panel_text.
    8. JEDYNAK, T., 2019. Pension Economics in the Era of Ageing Population, Part III.1 - Key Challenges of Modern Pension Schemes (Sustainability of Pension Schemes and Retirement Age). Zvaná přednáška v rámci předmětu 1VF415. 15. 5. 2019. Praha: Vysoká škola ekonomická v Praze.
    9. KLAZAR, S., OCHRANA, F., PLAČEK, M., VACEKOVÁ, G., 2021. The development and specific features of outsourcing, offshoring, and knowledge intensive business services in the Czech Republic - The case of Prague and Brno. In: Outsourcing in European Emerging Economies - Territorial Embeddedness and Global Business Services. London: Routledge, Taylor & Francis Group, Routledge advances in regional economics, science and policy. S. 114-128. Go to original source...
    10. KLAZAR, S., SLINTÁKOVÁ, B., 2012. How Progressive is the Czech Pension Security? Prague Economic Papers [online]. Sv. 21, č. 3, s. 309-327. doi: 10.18267/j.pep.426. Go to original source...
    11. MFČR, 2015. Odborná pracovní skupina posoudí zdanění příjmů [online]. [vid. 30. 10. 2021]. Dostupné z: https://www.mfcr.cz/cs/aktualne/tiskove-zpravy/2014/odborna-pracovni-skupina-posoudi-zdaneni-18695.
    12. MPSV, 2014. Druhý pilíř skončí. Ministryně představila způsob a termíny ukončení [online]. [vid. 29. 10. 2021]. Dostupné z: https://www.mpsv.cz/web/cz/-/druhy-pilir-skonci-ministryne-predstavila-zpusob-a-terminy-ukonceni.
    13. MPSV, 2016a. Databáze vyměřovacích základů pro důchodové pojištění. Praha: Ministerstvo práce a sociálních věcí, Sekce podpory seniorů, Pojistně matematické oddělení.
    14. MPSV, 2016b. Pokud živnostníci odvádí na důchodové pojištění minimum, dočkají se velmi malého důchodu, upozorňuje MPSV [online]. [vid. 29. 10. 2021]. Dostupné z: https://www.mpsv.cz/-/pokud-zivnostnici-odvadi-na-duchodove-pojisteni-minimum-dockaji-se-velmi-maleho-duchodu-upozornuje-mpsv.
    15. MPSV, 2021. Švarcsystém [online]. [vid. 14. 11. 2021]. Dostupné z: https://www.mpsv.cz/svarcsystem.
    16. OECD, 2011. Pensions at a Glance 2011: Retirement-income Systems in OECD and G20 Countries [online]. Paris: Organisation for Economic Co-operation and Development [vid. 29. 10. 2021]. Dostupné z: https://www.oecd-ilibrary.org/finance-and-investment/pensions-at-a-glance-2011_pension_glance-2011-en.
    17. OECD, 2013a. Gini coefficients on pension entitlements and earnings: OECD average and national earnings-distribution data [online]. Paris: Organisation for Economic Co-operation and Development [vid. 30. 10. 2021]. Dostupné z: https://www.oecd-ilibrary.org/finance-and-investment/pensions-at-a-glance-2013/gini-coefficients-on-pension-entitlements-and-earnings_pension_glance-2013-table72-en.
    18. OECD, 2013b. Pensions at a Glance 2013: OECD and G20 Indicators [online]. Paris: Organisation for Economic Co-operation and Development [vid. 31. 10. 2021]. Dostupné z: https://www.oecd-ilibrary.org/finance-and-investment/pensions-at-a-glance-2013_pension_glance-2013-en.
    19. OECD, 2015. Pensions at a Glance 2015: OECD and G20 indicators [online]. Paris: Organisation for Economic Co-operation and Development [vid. 29. 10. 2021]. Dostupné z: https://www.oecd-ilibrary.org/social-issues-migration-health/pensions-at-a-glance-2015_pension_glance-2015-en.
    20. OECD, 2017. Pensions at a Glance 2017: OECD and G20 Indicators [online]. Paris: Organisation for Economic Co-operation and Development [vid. 29. 10. 2021]. Dostupné z: https://www.oecd-ilibrary.org/social-issues-migration-health/pensions-at-a-glance-2017_pension_glance-2017-en.
    21. OECD, 2018. OECD Pensions Outlook 2018 [online]. Paris: Organisation for Economic Co-operation and Development [vid. 30. 10. 2021]. Dostupné z: https://www.oecd-ilibrary.org/finance-and-investment/oecd-pensions-outlook-2018_pens_outlook-2018-en.
    22. OECD, 2019. Pensions at a Glance 2019: OECD and G20 Indicators [online]. Paris: OECD Publishing. [vid. 29. 10. 2021]. Dostupné z: https://www.oecd-ilibrary.org/content/publication/b6d3dcfc-en.
    23. OECD, 2020. OECD Reviews of Pension Systems: Czech Republic [online]. Paris: Organisation for Economic Co-operation and Development [vid. 14. 11. 2021]. Dostupné z: https://www.oecd-ilibrary.org/social-issues-migration-health/oecd-reviews-of-pension-systems-czech-republic_e6387738-en.
    24. OECD, 2021. Revenue Statistics - OECD countries: Comparative tables [online] [vid. 30. 10. 2021]. Dostupné z: https://stats.oecd.org/index.aspx?DataSetCode=rev.
    25. PENSIONSMYNDIGHETEN, 2021. Se hela din pension och använd vår pensionsprognos | Pensionsmyndigheten [online]. [vid. 30. 10. 2021]. Dostupné
    26. z: https://www.pensionsmyndigheten.se/forsta-din-pension/hur-mycket-pension-far-jag/prognosstandard.
    27. POTŮČEK, M., 2018. Economic globalization and the role of the EU social policy as challenge (not only) for Central and Eastern Europe. Social Work & Society [online]. Sv. 16, č. 2. [vid. 29. 10. 2021]. Dostupné z: https://ejournals.bib.uni-wuppertal.de/index.php/sws/article/view/568.
    28. POTŮČEK, M., RUDOLFOVÁ, V., 2016. Rivalry of Advocacy Coalitions in the Czech Pension Reform. NISPAcee Journal of Public Administration and Policy [online]. Sv. 9, č. 1, s. 117-134. doi: 10.1515/nispa-2016-0006. Go to original source...
    29. SAEZ, E., SLEMROD, J., GIERTZ, S. H., 2012. The Elasticity of Taxable Income with Respect to Marginal Tax Rates: A Critical Review. Journal of Economic Literature. Sv. 50, č. 1, s. 3-50. doi: 10.1257/jel.50.1.3. Go to original source...
    30. SHARE, 2021. The Survey of Health, Ageing and Retirement in Europe (SHARE): Home [online]. [vid. 31. 10. 2021]. Dostupné z: http://www.share-project.org/home0.html.
    31. STATNISPRAVA.CZ, 2021. Informativní důchodová aplikace České správy sociálního zabezpečení - statnisprava.cz [online]. [vid. 14. 11. 2021]. Dostupné z: https://www.statnisprava.cz/rstsp/clanky.nsf/i/informativni_duchodova_aplikace_ceske_spravy_socialniho_zabezpeceni__21072308_23491264.
    32. SZCZEPAŃSKI, M., 2018. The Economic and Social Consequences of Changes in the Pension System in Poland in 2017. In: Theoretical and Practical Aspects of Public Finance 2018: Proceedings of 23rd International Conference. Prague: University of Economics, Prague.
    33. ŠUSTR, L., 2019. Důchodová komise začala dotazníkem. ODS připravuje vlastní řešení systému penzí - Echo24.cz [online]. [vid. 29. 10. 2021]. Dostupné z: https://echo24.cz/a/SiZc4/duchodova-komise-zacala-dotaznikem-ods-pripravuje-vlastni-reseni-systemu-penzi.
    34. TRESCH, R. W., 2014. Public Finance: A Normative Theory. 3rd edition. Boston: Academic Press. Go to original source...
    35. VANČUROVÁ, A., 2016. Daňový systém ČR 2016. 13. aktualizované vydání. Praha: 1. VOX a.s.
    36. VARIAN, H. R., 1992. Microeconomic Analysis, Third Edition. New York: W. W. Norton & Company.
    37. VOSTATEK, J., 2021. Czech Pension Reform Plan. In: Theoretical and Practical Aspects of Public Finance 2021: Proceedings of 25th International Conference TaPAPF. Prague: Prague University of Economics and Business.

    This is an open access article distributed under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0), which permits use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content