By Nicholas A. Barr, World Bank
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Extra resources for Poland: Income Support and the Social Safety Net During the Transition (World Bank Studies)
Billion) 1985 1986 1987 1988 1989 1990 1991 Unemployment benefit, etc. 4. (g) Estimated figure. 1 Page 8 15. The obvious question is the extent to which this pattern is relevant to countries like Poland. The first point to note is that though high real income in the OECD countries influences the level of spending, it has less influence on its structure. The figures cannot, therefore, be set aside simply because of income disparities between the OECD and countries in central and eastern Europe. Nevertheless, the 1991 Polish figure may be on the high side.
Chapter 4 discusses how the system is excessively generous in a number of ways: benefits can be high, access easy and duration long; and it is possible to combine work with receipt of benefit on generous terms. 10. Adverse incentives can become costly by increasing benefit expenditure and/or by reducing output. Incentives to retire early, for instance, do both. Problems can arise in three ways, as discussed in Chapter 5: the benefit structure may give inefficient incentives to claim benefit; policing of entry may be insufficient; and the structure of contributions may have adverse incentive effects.
4. The social safety net includes income support (the main focus of this study); ensuring adequate funding and provision of health services; employment services to help workers find new jobs and employers to find qualified workers; and programs to improve employment opportunities, such as training and micro-enterprise development. The Polish system of income support comprises three systems: unemployment and related benefits; social insurance (sick pay, maternity benefits, pensions, and family benefits); and social assistance ('welfare'), awarded on the basis of an income test.