Nikopour, Hesam (2005): Business cycles and policy making in social insurance systems the case of Iran (1962-2004).
Download (214kB) | Preview
Social security is not apart from other aspects of growth and development. It is a phenomenon completely coherent to economic growth, social justice, human dignity and national prosperity. Generally national social security systems in most countries consist of insurance, protection and relief policies. Socio-historical studies reveals that by promoting economic growth and development of middle class, in addition to strengthening civil institutions, the protective function of system would be reduced and adversely the insurance function will be increased. In principle there is a direct linkage between social security policies and economic growth via improving production capability. Some believe that economic growth will not be achieved properly without extending social security. Such interdependency requires a stable coordination between social security policies and macroeconomic policies so that development of social welfare results in more productive activities and eventually economic efficiency and productivity. The success and sustainability of a social security fund in long term is highly rely on suitable policy and decision making, and in this regard the macro-economic is one of the most affecting environmental factors or variables on the performance and decision making processes in social security fund. Thus, to adopt proper policies and to be sensitive to external environment of the organization, it is so important to understand the economic boom and slump or in other word the economic cycles. This paper attempts to measure business cycles of Iran during 1962-2004, by using the Hodrick- Prescott filter. Moreover the relationship between these cycles and some variables of Social Security Organization of Iran – the largest and oldest social insurance organization for workers in private sector- will be analyzed. Results indicate that stagflation situation in Iran’s economy and adjusting minimum wages according to the inflation have caused mismatching between macroeconomic policies and social insurance policies. This situation has led to increase of social insurance burden - the ratio of premium revenues to production of industry and service sectors- and accordingly increase of premium evasion.
|Item Type:||MPRA Paper|
|Original Title:||Business cycles and policy making in social insurance systems the case of Iran (1962-2004)|
|English Title:||Business cycles and policy making in social insurance systems the case of Iran (1962-2004)|
|Keywords:||Business cycles, Hodrick - Prescott filter, Social Security, Stagflation, Iran|
|Subjects:||E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles
H - Public Economics > H5 - National Government Expenditures and Related Policies > H55 - Social Security and Public Pensions
E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
|Depositing User:||Hesam Nikopour|
|Date Deposited:||29. Jan 2009 09:56|
|Last Modified:||13. Feb 2013 05:33|
Canova and Nicolo (2000), On the Sources of Business Cycle in the G7. University Pompeo Fabria Mimeo.
Farooq Arby, M. (2001), Long-Run Trend, Business Cycles and Short-Run Shocks in Real GDP, W.P. No.1/01, State Bank of Pakistan. September
Hodrick, R.J. and Prescott, E.C. (1997), Post war U.S. Business Cycle: An Empirical Investigation. Journal of Money, Credit and Banking, Vol.29, PP: 1-16.
Maravall, A. and Del Rio, A. (2001), Time Aggregation and the Hodrick-Prescott Filter. Banco de Espana-Servicio de Estudios, Documento de Trabajom, No.108.
Nikoopour, H. (2005), Measuring the Size of Underground Economy in Iran with Emphasis on the Incentives for Evasion of Insurance Premium Payment (1961 – 2001), Tamin-e-Ejtemaie Social Security Quarterly, No.18, and Vol.6.
Pacheco, J.F. (2001), Business Cycles in Small Open Economies: The Case of Costa Rica. IMF. Working paper, No.330, February.
Pierre Plamondon and etl. (2002), Actuarial Practice in Social Security, ILO and ISSA, First Published.
William Barnett and J. Stuart Wood (2002), Business Cycle Theory and Stagflation, Presented at the Austrian Scholar’s Conference.