Finances of social insurance 2400-M1FPFUS
1. The idea and scope of social security. Why does the state have to help people - pros and cons?
Elements of social security and their basic characteristics. The difference between social security and social insurance. Basic arguments for and against state aid. Basic differences between private and public insurance.
2. Incomes in life-cycle model.
Permanent income hypothesis. Welfare optimization in life-cycle model. Costs of obtaining income in the active phase. The replacement rate. Savings rate and saving endowment in a model with increasing wages and pensions’ indexation. Calculation of contributions necessary to obtain a specific replacement rate.
3. How can we save for old age.
Different retirement systems. Disadvantages, advantages and problems of alternative solutions: individual savings, individualized participation and mandatory participation. Types of retirement plans. Defined benefit and defined contribution. The distribution of risk depending on the form of the plan.
4. Demographic processes and social policy.
Directions of demographic changes, forecasts for Poland and the world. Wealth of societies and the demographic structure. Causes of populations’ aging. The demographic dependency ratio and its types. Retirement systems and demographic factors. Work and income of older people in an aging society.
5. Social standards and protection against poverty.
Measures of poverty - theory and practice. Changes in the level of official poverty measures and their relation to minimum pensions, minimum wages and average wages. Threat of poverty in Poland. Types of pensions and rules for obtaining them. Minimum retirement benefit. Principles of operation and the role of social assistance, basic social assistance benefits. Active and passive tools to combat unemployment. Pre-retirement benefits.
6. PAYG pension insurance
The essence of pay-as-you-go financing. Is the capitalization of liabilities in a public system necessary? Analysis of benefits from the pay-as-you-go system and related problems. State guarantees in the pension system.
7. Funded pension insurance. Private retirement plans
The formula of benefits - plans with a defined benefit, with a defined contribution and indirect forms. Benefits accrual, the acquisition of rights and their portability. The value of future benefits. The role of the state in funded pension insurance.
8. Reforms of pension systems.
Directions of changes in pension systems: Anglo-Saxon, Latin American and Polish-Swedish approaches. Diversification of income allocation in the pension system. Transformation from one system to another. Financing the pension reform.
9. Multi-pillar systems
Division of tasks between the pillars of the pension system. Pension system in Germany, Great Britain, USA.
10. Polish social insurance system - reforms, conditions, directions of changes
The general shape of the Polish pension system. Basic rules, amount of contributions and benefits. The old system and its transformation. Principles of the new pension system: first and second pillar. The role of the Social Security Institution. The functions, regulation and supervision of the Open Pension Funds. Rate of return and amount of pensions. The third pillar: IKE, IKZE, PPE.
11. Finances of the pension system.
Inflows and outflows of pension systems: ZUS, KRUS, special systems. Size of contributions and benefits, number of insured and beneficiaries.
12. Social and economic costs of social insurance.
Effectiveness of social insurance operations, impact on the economy, the condition of public finances, decisions on supply and demand for labor, the importance of the tax wedge.
Type of course
1. The student knows what social security and social insurance is, how it works, why it is needed, what are the dependencies between demographic processes and social insurance, where the need for pension system reforms arises. S2A_W02, S2A_W03, S2A_W07, S2A_W08
2. The student understands the differences between private insurance and public insurance, knows what are the basic problems of social insurance, as well as the price for obligatory participation in the system. S2A_W02, S2A_W03, S2A_W07, S2A_W08
3. The student knows and understands the model of income in the life cycle of a household, he knows what are the relationships between the replacement rate, the saving rate and capital in the model with the increasing wages and indexation of pensions. S2A_W02, S2A_W03, S2A_W07, S2A_W08
4. The student knows the basic principles of pension systems in different countries, knows what are the approaches to reforms of pension systems and how such reforms are carried out. S2A_W02, S2A_W03, S2A_W07, S2A_W08
5. The student knows how the risk is distributed depending on the rules of the pension system, understands what are the consequences and reality of the state guarantee in the pension system, knows the criteria for assessing the reliability of the pension plan. S2A_W02, S2A_W03, S2A_W07, S2A_W08
6. The student understands what are the problems with financing social insurance, knows where they come from and what are the proposals for their solution. S2A_W02, S2A_W03, S2A_W07, S2A_W08
7. The student knows how the Polish retirement system and the system of protection against poverty work, who is entitled to benefits, what conditions must be met to claim benefits. S2A_W02, S2A_W03, S2A_W07, S2A_W08
1. Student is able to analyze activities within the public sector and assess their consequences, especially in the field of social policy of the state and social security reforms. S2A_U01, S2A_U02, S2A_U03, S2A_U08
2. The student can calculate how much should be saved in order to achieve the desired replacement rate, and what replacement rate can be obtained with a given level of retirement savings. S2A_U01, S2A_U02, S2A_U03, S2A_U08
3. The student can understand the public debate on social security, present his arguments for and against the proposed solutions. S2A_U01, S2A_U02, S2A_U03, S2A_U08
4. The student can indicate who should get which benefit. S2A_U02
c) Social competences
1. The student is aware of why the issue of pension reforms is so important and raises great social controversies, and realizes that expert knowledge may not be a sufficient argument to explain the problem to others. S2A_K03, S2A_K04, S2A_K06
2. The student is aware of the differences between theory and practice, the necessity to adjust the solutions to existing conditions and shows readiness to acquire new knowledge related to the subject. S2A_K03, S2A_K04, S2A_K06
Assessment of learning outcomes is made in the form of a written exam
Atkinson A.B. (1999), The Economic Consequences of Rolling Back the Welfare State, The MIT Press
Auerbach A.J., M.S. Feldstein (eds.), Handbook of Public Economics, Elsevier, North-Holland
Averting the Old Age Crisis. A World Bank Policy Research Report (1994), Oxford University Press.
Barr N., P. Diamond (2008), Reforming Pensions. Principles and Policy Choices, Oxford University Press.
Clark, R.L., R.V. Burkhauser, M. Moon, J.F. Quinn, T.M. Smeeding (2004), The Economics of an Aging Society, Blackwell Publishing, Oxford
Góra Marek (2003), System Emerytalny, PWE, Warszawa
Muszalski Wojciech (2004), Ubezpieczenie społeczne, PWN, Warszawa.
Stiglitz J.E. (2004), Ekonomia Sektora Publicznego, PWN
Information on level of this course, year of study and semester when the course unit is delivered, types and amount of class hours - can be found in course structure diagrams of apropriate study programmes. This course is related to the following study programmes:
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