3784495980

BANK I KREDYT styczeń 2008

Microeconomics

refereuce to assets in Ihe fonu of au iufonnal assessmeut by a representative of the local Social Assistance Ceutre, and according to a recent analysis iniplies a very restrictive approach to tlin wealth-related eligibility criteria.²¹ As Haan aud Myck (2007b) demoustnited using replacemenl ratios computed for representative samples of the German and Polish populations (respectively using the GSOEP-2005 and BBGD-2005 data) the restrictiveness of the wealth criteria in Polarni iniplies very Iow RRs for a much larger number of families compared to Germany, and thus suggests very stroug work iucentives in the Polish system.

The secoud aspect which could not be addressed in tliis paper, and which is also imporłaut for Polami is within-honsehold shariug of resources among several families. While multi-family households are rather rare in Germany and in the UK, in Poland about 27% of households inclnde morę than one family (defiued as a single adult or a couple with or without dependent children). The likely sharing of resources within households iniplies tluit although we may calculate very Iow incomes in out-of work scenarios (assuming a siugle-family household) the family may in fact be able to fali back on sonie income of other families it shares the household with. Ili couseipience, the replaceinent ratio for such a family would be higher, particularly in the case when imamie earned ni the ln-work seenario were also to be shared with other families in the household.

Another thiug that cannot be accouuted for in sucli a siiuple analysis is the fact that the different Systems have varying administrative procedures. This applies, for example, to the income considered for specific beuefits, and the period for which the beuefits are granted. Ali this will also have au effect on labour market iuceutives, through the dynamie as|iect of the system and the uncertainty the systems introduce as far as eligibility is coucerued. Aud yet, despite these arguments which cali for sonie cantion conceming the interpretatiou of onr results, there are several linportaiit conclusions wlnch follow from onr analysis. In the jiaragraphs below we focus on the most important implications for Poland.

The first of tliose is the relatively liberał eligibility rules conceming the Honsing Beuefit in Poland, which imply that families at relatively high levels of incomes may fulfil the criteria to receive this support. The payiuenls of HB seem to exteud far beyond the relative income levels when we compare tliem with Germany or the UK (see e.g. Figures 7 or 12). Secondly, the levels of the legislated minimum incomes — especially for couples - seem to be relatively higli, eveu in comparison with Germany. Eveu if it is tnie that families in most cases do not receive the fuli legislated amouiit, it is still a fact that officially tliey may clauu sonie Social Assistance even at relatively high levels of employinent income (see Figurę 8),

Au important differeuce betweeu Poland and both the UK and Germany is that the receipt of Honsing Beuefit limits the eligibility for Social Assistance. This lueans that those with high honsing cost in Poland would have lower after-housing-costs disposable incomes (i.e. incomes after the payinent of honsing costs) - eveu if they receive the Honsing Beuefit to cover these costs (compare Figures 7E aud 8E).

TVvo other important points to stress are: (i) the lack of uuiversal child-related support in Poland. aud the Iow (also in relative tenns) levels of the basie means-tested child-related beuefits (Zasiłek Rodzinny), and (ii) the Iow inceutives to work for secoud earners which result partly form the joint system of taxatiou which still operates in Germany and Poland.

Fiually, the iu-work support reforms in the UK show that such au instrument as the Working Tax Credit cau prove effective in eucouraging employinent while at the same time reducing poverty. Although such iustruinents ought to be implemented “with cantion” (see Haan, Myck 2007a) they cau be designed in such a way as to improve fiuancial attractiveuess of work.