Redo RUT-deduction

Labels: families with children, household services, jobs, RUT-deduction

I have previously argued that the subsidy of the household services are not really going to justify on the basis of the job impact it has. On the other hand would be subsidized services targeted primarily til families with children to facilitate lifelong puzzle a major welfare reform. The question then is how common it is that it is just families with children who use the current subsidy.

When I look at the investigation that SVT's Agenda sounded SCB implementation of the OSM has used RUT-deduction, it turns itne just be a politically divisive issue at this time. RUT-deduction is not usually of the families whose life puzzle that is meant to support.

Among the approximately 80 000 households that use of the option turns out to be around 60 000 households have children under 18 years. Around 75 percent of hushållsstjänstköparna So there are no children under 18 years. Least common among those lone parents who should have the greatest need.

This is obviously problematic. The conclusion should not be that deduction is entirely wrong, but that it should be done on the ground. Targeting aid to families with children and makes it even more generous so it will be at the same time also sharing less politically problematic ..

Household services are worth subsidizing?

Labels: domestic services, jobs, red-green, well-being

The question whether society should subsidize the purchase of so-called domestic services now share the opposition. Left is opposed and wants to abolish, the Green Party want to keep, the Social Democrats want to wait and see, as svt.s text news. The origin is evidently a study from Almega which would show that the subsidy has created around 11 000 jobs.

Regardless of where the opposition is landing, it is the first in his place to review Almega study. It shows that on årsbasiss paid around 1.1 billion in subsidies for the purchase of these services. Translated to helårsjob will be approx. 7 500 full-time employees and as many part-time, approx. 11 000 employees in the industry. So far, it is entirely reasonable. But what Almega study does not say much about is how much of those jobs that have been brought about by the subsidy. Probably far fewer.

Anyway, it is reasonable that the subsidy of domestic service creates new, white job that did not exist previously. It is indisputable. The opposition and the government instead should find out before deciding on one or the other is the following:

1. Is the cost of the resulting job impact reasonable. there is a better alternative use of tax money which may even create more jobs?

2nd Contributes subsidy to improve the ordinary working people to life puzzle, or the elderly daily life to such an extent as to justify the action regardless of how many jobs it creates?

The answer to question one is probably that there are other measures which the skate money would have more direct job impact, eg school or health care. If it was just a job effect that justified the premium would probably not be worth the money. But if the response to question two is that the subsidy can greatly facilitate the professional working life puzzle and thus be useful for example young families under stress, then it can be justified on that basis.

But it would boil down to the household services are not principally motivated by the job impact, but also must be borne by the life puzzle effect, then the subsidy is entirely misdirected as it looks right now. Then it makes no sense to subsidize each household.

The solution to the red-green conflict in this issue (and for the government) should therefore be to behålal subsidy of household services, kanker to extend the subsidy, but earmark adraget for working with children and the elderly living at home. This would both provide a degree of job efficacy and simultaneously could be seen on the part of a classic Swedish welfare policies.

Higher inflation would make good

Labels: IMF, inflation, crisis, monetary policy, the Riksbank, growth

National banks should have higher inflation than previously. It has been suggested before. But a bit shocking is that the Council now comes from the International Monetary Fund, IMF economists. In a report released the other day say that it is time to leave some old truths about how we create a stable macroeconomic development.

After having long been läxat up governments that failed to increase inflation or have used tax money to welfare commitments, the IMF turns on his cloak. Now, says IMF chief economist Olivier Blanchard to higher inflation, higher welfare efforts, stronger automatic stabilizers - are simply more government intervention in the economy - makes it easier to avoid severe economic crisis.

The new ideas are formulated in a new report, "Rethinking Macroeconomic Policy [pdf]". One of the key ideas of the IMF seems to be that low inflation targets have made monetary policy has not been adequately responsive while forced to withdraw the stimulus too quickly.

Economics laureate Paul Krugman agrees in his blog, but adds a further important argument:

"I would add, however, that there's another case for a higher inflation rate - an argument made most forcefully by Akerlof, Dickens, and Perry (pdf). It goes like this: even in the long run, it's really, really hard to cut nominal wages. Yet when you have very low inflation, relative wages getting right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis. "

IMF economists, Paul Krugman is not the laity any time. Their advice should be taken very seriously. Even in Sweden.

Job tax credit reduces the effect of gender bonus

Labels: parental leave, equality, gender equality bonus, job tax credits

TCO has long shown that the uneven distribution of parental leave contributes to inequality in employment. For women, childbirth is often a burden in his career and the men of the opposite. But to fix this by forcing parents to share every day as it would an unwise measure. On the other hand, it may be reasonable to individualize more months than it is today - especially as the growing number of fathers actually withdraw several months than currently earmarked.

But to move forward also requires other steps, such as economic incentives. The government introduced gender bonus is a very wise move. It's just that it is so complicated that no one seems to know how it works - and even fewer who care about it. According to an article in Dagens Nyheter recently, only about 30 households who applied for the bonus last year, and of those were only six households who received it. The fact that the current bonus also might have to wait up to one before you get the money do to seem to care.

But while the government has introduced a great job tax credits for the working, but not for those who are on maternity leave. For parents of young children where the father earns significantly more than the mother, which of course is not uncommon, is a job tax credit thus a kind of unequal equality bonus to the extent that it eats up a large part of the incentive effect, which was supposed to be gender bonus.

If both parents have the same income as a job tax credit does not play any role because it is the same for both spouses. Then serve it with the current system more to share equally, but on the other hand, it is precisely the kind of families which already share more equally. In families where the father earns more than the mother may lower the family tax if the father works and mother is home with their children. This effect does not eat up the entire bonus, but it increases the financial incentive to split equally, at least in those families where the need is greatest.

The greater the difference in job tax credits between the mother and father, the more affecting job tax credit for parental income distribution in the wrong direction, not least because the economic impact of the tax deduction is direct and bonuses will effect much later. The greater the difference in income, the less it pays to share equally. This means that the larger the difference in income, the more of jämställdhetsbonusens beneficial effects are outweighed by the opposite effect of job tax credit.

It is good to have a gender equality bonus, but the current design is too complicated and frustrated in too much of the job tax credit.

TCO's proposal is much better and means that both parents receive a 90 per cent reimbursement of their days, but only 80 percent of days that it is left to the other parent. This gives a direct effect in the wallet, just when money is needed. But this should also somehow be supplemented by the corresponding work tax credit also accrue to those who are on maternity leave.

Saab, the growth policy and the battle for jobs

Labels: automotive, industrial policy, Saab, Spyker

Extremely pleased that Saab gets a new owner who believes in the car manufacturer's future. Many are still being prepared to deal directly declared dead by a false hope. But in a global overhaul of the entire automotive industry and are running it need not be an advantage to have a giant supertanker - in order to navigate in a battle rapids of change may be better to be small, fast and flexible.

In order to do that and survive in a reality that requires substantial investment and considerable uncertainty must be the owners and long-term policy should be available. Not by being prepared to the business, but by pursuing a long-term growth and industrial policy based on not only that we need more jobs but better jobs, where productivity is not viewed as an insult.

But today it is time to rejoice. Saab's leadership has been very brave. The local unions have been so patient and proactive with being proud. But although the government has finally shown the need for political action to strengthen Swedish industry.

Now we must prove detractors that they were wrong. Saab must prove that the car has not only the faithful but also the growing clientele. The government must show at the not only has pulled out now - but also has a growth policy that provides long-term benefits for Swedish industry.

Although expensive advice can be really good when it comes to meeting job crisis

Tags: unemployment, Minister of Finance. research, jobs, crisis, public sector, advice

I have this year had a lot of comments in my blog entries about the effectiveness of economic policy and social policy. Large resources spent on relatively inefficient reductions in payroll taxes and tax cuts and efforts to enhance productivity, growth and employability have been relatively insignificant.

It has been called the policy is based almost exclusively on science and proven experience, but in fact, social policy was marked more by the desire to experiment than the knowledge of what works.

The SNS's latest report, "Advice to the Minister of Finance" is a lot of scientifically justified proposals for adjustments in policy. I can not resist quoting, inter alia, that:

"In our view, required a drastic shift in social policy towards a greater focus on targeted demand-sensitive measures, particularly to increase labor demand in the public sector, and education (especially job training), and fewer resources in terms of matching measures and job-seeking activities that apparently is quite inefficient in the current deep recession with low labor demand "

Economics Professors Dominique Anxo and Thomas Lind in the SNS-report "Advice to the Minister of Finance"

Anders Borg dismissed immediately a lot of advice, as expected. What is interesting is that SNS-report gives a very different picture of what economic research actually supports than is usually put forward in the political debate.

High unemployment is a costly business for all

Tags: unemployment, investerignar, costs, crisis

When you impact the economy pages coverage of the crisis, it is as if it has ceased to exist. Sure, the Commission recognized that the economic crisis has created mass unemployment - but all too rarely reflect it over the opposite - that high unemployment will be a sinker in the economy.

Yet most economists, sociologists and others who studied the costs of unemployment agree that unemployment is a very expensive business - and for a long time.

Unemployment is a waste of economic resources. An economy with high unemployment means that we risk a permanent tap into potential growth in that we do not work enough hours, and many forced out of the workforce. Much of the cost of exclusion can never be repaired. Reduced unemployment on the other hand, provides tremendous benefits for the economy and welfare.

To which we must add the large financial costs of unemployment leads to. High unemployment increases government spending and a significant reduction of government revenues. When many are unemployed reduces the potential consumption, which gives both lower growth and reduced revenues for the government. High unemployment, thus eats up the necessary resources from other important investments.

Often, the analysis stops there and forgetting the enormous costs of unemployment leads to all suffering. Longer unemployment means a loss of skills and self esteem. Long unemployment therefore increases the risk of continued unemployment. If unemployment insurance is weak, increasing the risk that many who have invested in education, degrade their competence by too quickly forced to take jobs which they are overqualified for. A host of studies show that long-term unemployment is a greatly increased risk of future loss of earnings even if you get a job again.

But high unemployment also significant social costs. High unemployment makes more poor, exacerbating social inequality, reduces social mobility, makes the crime rate is increasing and that the average life expectancy falls. To begin his life with unemployment or to last for long without a job, is likely to cause irreversible social and economic costs.

That the effects are long-term turns out not least because we are still paying by the huge bill that came out of the 90th century the crisis of unemployment, brain stem and alienation.

It is simply cheaper and better for society to invest in advance in order to reduce the risk of long-term unemployment, but to pay retroactively for the enormous costs of unemployment generates.

The sick leave becomes incapacitated by sickness absence?

Labels: research, skills, absenteeism, sick leave

Long-term illness is in itself so depressing for people that should be avoided at all costs? If so, could it be right to impose time limits on sick leave even if it is not medically justified on the basis of sick-leave diagnosis, as well is about what the government has now implemented .

The problem is that there is no evidence in research that would be the case. While it is reasonable to assume that the long absence due to illness make people more alone and therefore more depressed, says nothing about whether this happens so often, or so problem that seriously hampers the sick leave to get back into work - or if it is so that it may be more serious consequences that cancel sick leave prematurely.

It is common to argue that long sick-leave in itself makes people unable to work because it would have adverse health effects, but there is an argument that has no strong support in the research. However, it is reasonable to assume that those who are on long-term loss in both skills and self-esteem - and that employers therefore become less interested in hiring them. What we see in studies conducted TCO.

This allows the action to obtain long-term sick back to work should not be (as I believe that it is now) is almost exclusively assumed that the pressure disease with definite time limits and economic pressure. More of these activities have instead (in addition to the medical and work-oriented rehabilitation) gives priority to strengthening the sick self-esteem and competence. I wonder where the resources for these measures are necessary.

DN's leaders

Interesting article in the medical journal part 1

Interesting article in the medical journal part 2

The market is not self-regulating

Labels: economy, crisis, market, welfare

The economic crisis has shown that the economy is not a self-regulatory activities, which automatically creates good conditions for growth and prosperity. In fact, an imbalance between market and state, freedom and rules contributed to the crisis has had such a disastrous course.

The crisis has revealed major shortcomings in terms of both the dominant economic theory of the constant need for deregulation and has revealed an over-reliance on markets self-regulating ability.

There is no fundamental contradiction between highly developed welfare, strong unions and active state on the one hand and the proper functioning of their market economy on the other. In fact, recent developments both showed that growth in the liberalized countries have weak welfare system is not better than the more pronounced welfare economies, but also to economies with weak regulation of the market and little opportunity to pursue an active stabilization policy has been more affected by crisis.

Contrary to what is often claimed is the active welfare state, a lubricant for the smooth functioning of economic development.

GOOD LINKS

Krugman of the NY Times

Stiglitz's speech to African Develoment Bank Group

EMU among the economically rational and politically desirable

Labels: economy, emu, Lars Calmfors, mörtvik, policies, wennemo

For almost seven years ago, before the referendum on EMU membership, I wrote and Irene Wennemo on LO to an article in the DN-debate in which we warned against an over-simplification of the EMU debate. One of the perspectives we brought was just about the delicate balance between what is economically rational and what is politically desirable.

One of my starting point, now as then, is for Sweden to take responsibility for development and solidarity in Europe and the world, and that EU membership will contribute to this. But when the issue of EMU membership is the issue much more complex, which also Calmfors shows.

I pointed Wennemo and 2003 to a monetary union entails significant financial risks, particularly by countries renounce the possibility of a self-interest and currency that is tailored to the situation in the country. An economic union is thus not, as one would expect, automatically stronger the more people that are having, but may be weakened if member countries are too different and have different vulnerability to economic changes. The current crisis shows this process very clearly. Some countries in the EMU area, which would have had a more restrained monetary policy before the crisis, have been hit harder than others. While Sweden, for example, has fared better economically than we otherwise would have done by moving the exchange rate of the krona.

While pointing Calmfors that it also involves political risks and problems that remain outside a currency cooperation that is so integrated into the European idea of cooperation.

My conclusion is probably that the economic arguments for remaining outside has been strengthened by the crisis, but, paradoxically, while the police have reasons to go to become increasingly important.

As in so many other issues must be the final decision to be a balancing act between the politically desirable and economically rational.

Calmfors the DN-debate,