Economic Policy Reforms

1813-2723 (online)
1813-2715 (print)
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OECD’s annual report highlighting developments in structural policies in OECD countries. Closely related to the OECD Economic Outlook and OECD Economic Surveys, each issue of Economic Policy Reforms gives an overview of structural policy developments in OECD countries followed by a set of indicators that reflect structural policy evolution. A set of Country Notes summarises priorities suggested by the indicators with actions taken and recommendations suggested. The Country Notes section also includes a set of indicators tables and graphs for each country. Each issue also has several thematic studies.

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Economic Policy Reforms 2005

Economic Policy Reforms 2005

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01 Mar 2005
9789264008380 (PDF) ;9789264008366(print)

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Economic Policy Reforms: Going for Growth is a new annual periodical – intended as a complement to the OECD Economic Outlook and OECD Economic Surveys – which gives an overview of structural policy developments in OECD countries.  The report pinpoints structural policy priorities to enhance GDP per capita for all member countries, and ways to improve labour productivity and utilisation are identified on the basis of cross-country comparisons of policy settings.
A chapter presenting key structural policy indicators (including labour costs and taxation, unemployment and disability benefits, product market regulation, trade barriers, educational attainment and public investment) is followed by a comprehensive Country Notes chapter, consisting of individual analytical sections for each member country and the European Union.
Each issue of Economic Policy Reforms: Going for Growth will also present several in-depth thematic studies. The topics covered in this first issue are: product market regulation, retirement effects of old-age pension and early retirement schemes, female labour force participation and the long-term budgetary implications of tax-favoured retirement saving plans.
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  • Structural Policy Priorities
    Over the past decade, the gap in GDP per capita relative to the United States has widened in a number of countries, including the large continental European economies and Japan. The gap is linked to lower hours worked per capita, lower output levels per hour worked, or both. This chapter describes broad trends in economic performance since the mid-1990s and summarises structural policy priorities for all member countries to enhance GDP per capita. The policy priorities are identified on the basis of cross-country comparisons of performance and policy settings.
  • Structural Policy Indicators
    This chapter contains comparative OECD indicators for labour costs and labour taxation; unemployment, disability and sickness income support; labour market and product market regulation; barriers to competition, trade and investment, sectoral regulation, educational attainment and achievement; health expenditure; and public investment. These indicators have been used to identify the policy priorities that are discussed in this report.
  • Country Notes
    This chapter contains information on key policy priorities for individual OECD member countries and for the European Union.
  • Product Market Regulation in OECD Countries
    This chapter describes trends in product market regulation in OECD countries over the period 1998 to 2003. The analysis is based on summary indicators of product market regulation that measure the degree to which policies promote or inhibit competition. The results suggest that regulatory impediments to competition have declined in all OECD countries in recent years. Regulation has also become more homogenous across the OECD as countries with relatively restrictive policies have, in some areas, moved towards the regulatory environment of the more liberalised countries. Within some countries product market policies have become more consistent across different regulatory provisions, although relatively restrictive countries still tend to have a more heterogeneous approach to competition. In general, domestic barriers to competition tend to be higher in countries that have higher barriers to foreign trade and investment, and high levels of state control and barriers to competition tend to be associated with cumbersome administrative procedures and policies that reduce the adaptability of labour markets. Notwithstanding recent progress in product market reform, a "hard core" of regulations that impede competition still persists in virtually all countries.
  • The Retirement Effect of Old-age Pension and Early Retirement Schemes in OECD Countries
    OECD research summarised in this Chapter demonstrates that public pension systems and other social transfer programmes (such as unemployment, disability or special early retirement benefit systems) embody significant early retirement incentives. New empirical evidence shows that these schemes have played a major role in depressing employment at older ages, most prominently in a number of continental European countries where the work disincentives are particularly large. Therefore, a removal of early retirement incentives could raise effective retirement ages appreciably. For instance, labour force participation rates of older workers could be increased by over 15 percentage points in most continental European countries.
  • Female Labour Force Participation
    Policy and market failures can depress female participation in the labour force and current participation rates are below levels desired by women. Female participation can be boosted by a more neutral tax treatment of second earners (relative to single individuals), stronger tax incentives to share market work between spouses, childcare subsidies, and paid maternity and parental leaves. Married women indeed remain more highly taxed than men and single women, and the level of family support (through childcare subsidies and paid parental leaves) differs widely across countries. Part-time employment can also help reconcile work and family demands. However, preferences for part-time labour vary across countries.
  • Long-term Budgetary Implications of Tax-favoured Retirement Saving Plans
    In most OECD countries, governments promote private pensions by means of tax incentives, most commonly in the form of a tax exemption on contributions and investment income, with taxation applying instead on pension benefits. This Chapter provides a projection over the next 45 years of the budgetary impact of tax-favoured private pension plans in 17 OECD countries. The findings suggest that aside from leading to a deferral of tax revenues, such tax treatment of private pensions represents a net cost for public finances, largely because the taxes foregone on contributions and asset accumulation exceed taxes collected on pension benefits. Going forward, as larger cohorts reach retirement age and pay taxes on pensions, the net budgetary cost is expected to diminish in the majority of countries, but the impact on public finances will likely remain negative in most cases. The reason is that tax-favoured private pension plans tend to be used mostly by upper-income individuals who would most likely have saved equivalent amounts even without incentives. The Chapter discusses a number of alternative policy options that may help to broaden participation among lowerincome earners so as to raise the impact on private savings and diminish the budgetary cost. Compulsion is one option. Another is to change the design of occupational retirement plans so that enrolment is the default option. The value of the tax incentives to participate could also be re-balanced in favour of lowerincome earners by replacing the tax deduction for contributions by a non-wastable tax credit.
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