Mario Benedetti
Pongo estos seis versos en mi botella al mar
con el secreto designio de que algún día
llegue a una playa casi desierta
y un niño la encuentre y la destape
y en lugar de versos extraiga piedritas
y socorros y alertas y caracoles.
==
I put these six verses in my bottle and set it adrift in the sea
with the secret hope that someday
it will arrive at an almost deserted beach
and a little boy will find it and open it
and instead of verses out fall pebbles
and aid and warnings and seashells.
Showing posts with label spanish. Show all posts
Showing posts with label spanish. Show all posts
Sunday, June 23, 2013
Saturday, June 22, 2013
Poema de Vapor
Poema de Vapor
Pedro AndreuCuántas ganas de darte mi corazón de barro,
mis desplegadas alas de papel pinocho.
O cosas más sencillas: una copa de vino,
las señas de mi casa, un trozo de mi cama.
Y mañana, café al despertarnos y este poema
dibujado en el espejo empañado del baño.
==
Many times I have wanted to give you my heart of clay,
my crêpe paper wings spread wide.
Or simpler things: a cup of wine,
my home address, a part of my bed.
And tomorrow, coffee to wake us up and this poem
drawn on the foggy bathroom mirror.
Sunday, February 24, 2013
¿Por qué tenemos Pikachu?
Why do we have Pikachu?
by ?
A question occurred to me a few days ago when I started to play Pokémon blue. Normally I play Pokémon in English - so I hadn't thought that it would have been possible that the franchise would not translate all of the names. The fundamental thing to know would be that the names in Japanese are different. For example: Dragonite was Kairyu etc. So, the question is "Why?"
?
It seems to me that the Japanese names are different because Pokémon is a product of Japan and for this reason, it contains idioms, jokes, and aspects of that culture. My problem with that is: apart from Japanese, the Pokémon have different names in English, Chinese, French, and German! But not in Spanish?
At least, the names of Pokémon in English, Chinese, and German are translated and the translation from Japanese takes into account the sayings, jokes and idioms of each language -- even in French,
"In the French version Nintendo took care to translate the name of the creatures so that they reflected the French culture and language." (Wiki)
"In the French version, Nintendo made an effort in translation of the names of the creatures, such that they reflect the language and culture of French." ((more literal trans))
They give such respect to those countries, but only some countries! There is France (and clearly if there are many other ((countries)) that have French as the official language or second language) - but the number of Spanish-speaking countries is much greater than those that speak French or German -- and perhaps close to the size of English (when combined).
In America, the country that has the second largest market for Pokémon, there is a Spanish-speaking population that is almost 20 percent of the total! So then there is no lack of interest or demand.
The problem is possibly due to the unity of the countries, in the sense that there are many Spanish-speaking countries, and they are far apart and unconnected. But, at least you have Spain, Mexico and Argentina that are large countries, 'powerful', and have an economy to support video games. (I know that realistically this isn't true in Mexico and Argentina - especially the south of Argentina - but bear with me.)
Perhaps we have to ask the Spanish-speaking companies and our governments. I know that France is focused on the development of its language and culture (this is reflected in the above quotation) and as a result the names of Pokémon and the language used in the games specifically includes cultural references. So maybe the (Spanish-speaking) governments don't care about this - a big problem, I think. Especially now, when there are still new versions coming out. The fundamental issue should be that no emphasis is placed on the culture and history of Spanish speakers, but perhaps this is the problem:
[Map showing lots of Spanish-speaking countries.]
There are too many. They would have to include the culture and history of three countries at least!! - but there is also the entirety of South America, all of Central America, Mexico, Spain, and the Caribbean Islands as well. And each country has its own jargon.
This is also the case in English. English is the lingua fraca (("lingua franca")) and with the number of Spanish-speakers in the United States, it makes more sense to change the names such that there are two versions ((of the game)) in the same country.
My conclusion? Who knows? But, I'm going to Catch Them All!
Un Nuevo Sistema Electoral para España
A New Electoral System for Spain
by Jesús Fernández-Villaverde on 24 May 2011
Today I'm going to propose a new electoral system for Spain. Given that this is one of the core demands of the 15 million demonstrators, I want to be as practical as I can while staying away from simple slogans. Equally, I want to be as specific as possible without being wordy.
Before getting into the details, allow me to clarify two things. First, the system that I'm going to propose is derived from many years of studying electoral systems, teaching courses on the subject and reading the relevant literature. In a post of a few hundred words, I hope that the reader will forgive me if I don't back up all of my assertions in detail. Perhaps in future articles I would have time to do this (in Nada es Gratis I have published quite a bit on this subject, for example [one], [two], [three], [four] and [five]). Second, the system that I'm going to propose is my own design and consequently, in this case, only, I only speak for myself.
The first thing we have to do is identify the basic objectives of a good design:
1) An electoral system that ensures governability. At the end of the day the goal of an electoral system is to obtain a government in a reasonable amount of time without a minority having the power to influence the overall results.
2) An electoral system that reflects, approximately, the diversity of opinions in Spain. In our country this has to include different ideologies but also, unpleasant as it may be (?), the undeniable geographic differences. An equilibrium point must be found between objective 1) and this desire for diversity.
3) An electoral system that avoids the bureaucratic partisan excesses that we have seen in the past few years in Spain.
4) But also an electoral system that recognizes that the political parties are important, as they minimize information cost, exercise discipline when needed and that the great central party bureaucracies usually focus and moderate politics, doing this in a slow and perhaps frustrating way but also sensibly.
The second thing we have to do is recognize that EVERY electoral system is going to have serious defects (for once in this article allow me to be more technical: this can be demonstrated mathematically, assuming that all of the voters are sincere, serious and altruistic, this is a property of the systems of aggregate preferences). Our task must be to find a system that minimizes, as much as possible, these defects given the structure of our society and the idiosyncrasy of Spain.
The third then that we have to do is forget for one moment what the Constitution and other laws do or do not say. The legal system exists to serve society, not the other way around. If it has to change, it will change and the change will be accomplished. Equally, I'm going to ignore whether or not I the political parties could be convinced to accept the new system. If you haven't decided where to go yet, it isn't possible to plan for bumps in the road.
Starting from these three considerations, and in what I think is the best constitutionalist tradition of checks and balances, my system is a mixture between majority and popular vote. These are the details:
1.) The Congress of the Representatives will still have 350 representatives, as it does now. I don't think that changing the number of representatives will do much and reducing it would create, as I will explain in a moment, constituencies too big (in reality it would be better to increase the number to 351 to avoid ties, but whatever...)
2.) Half of the representatives, 175, would be chosen from single-member districts by a single-round majority scheme. This would allow a direct tie between the representatives and the voters and, most likely, over-represent the winning party in the elections in order to allow the majority of the government to work.
a) Each district, given its own population, would have some 200k votes (a reasonable ratio of constituency to representative). An electoral commission of independent experts would design the districts to avoid manipulation, maintain districts of approximately equivalent size and use common sense when assigning districts' geographic boundaries (although there will surely be some exceptions).
b) The political parties can "support" one or many candidates, but this must always be on an individual level, such that the entry of independents is possible. The position, if it is won, is of a representative, not of a party post.
3.) The other half of the representatives, 175, will be chosen by popular vote. This second component of choice seeks to represent minorities and correct the possible defects of majority rule.
a) If the constituency is national, as seems simplest to me, the choice between a purely proportional system or a D'Hondt system is somewhat irrelevant as in constituencies with more than 50 representatives the results of both will be almost the same. You might consider designing independent constituencies (the provinces with only 175 representatives would be almost all quasi-majorities, undermining the goal of correcting the problems of majority rule) but many communities (La Rioja, Cantabria, Navarra) would choose so few representatives as to defeat the purpose of the second half of the representatives. For this reason I would recommend going with a national constituency.
b) Establish a minimum number of votes for consideration in the proportional allocation of votes would avoid excessive fragmentation of Congress and entry of more radical parties. The 3% rule used in many elections now is sensible as it guarantees that each party has 5 representatives. It's always possible to increase this to 5% to be precise.
c) The nationalist parties could be grouped together, as is done now for Europe, with joint listings. On the other hand CiU and PNV would probably take many of the majority rule representatives and CC one or two (via Tenerife). ERC, EA or BNG would have more difficulty and probably only enter into the proportional allocation on a joint list.
d) With 175 representatives on each list it is almost impossible to have openings but a limited system like that of Holland or Sweden, where the voter can choose 1 or 2 favorite representatives (or eliminate 1 or 2) may allow popular desire for control over the listings to be satisfied. While I don't recommend it, it is a harmless option if implemented properly.
4.) Don't establish primaries for single-representative constituencies. The experience with the EU makes it all too clear that primaries mobilize the most radical constituents of each party (this happens even with presidential primaries). Another option would be to have primaries but with a mandatory vote (to avoid radicalization) or what is called flash primaries: each constituent chooses a party ballot (for example, PSOE) and choosing his or her favorite from among the party members that have been nominated. The district is won by the party with the most votes and, within that party, the candidate with the most votes among his or her compatriots. I'm not in favor of any of the alternatives in particular but, given that we have 175 representatives elected by proportional vote, we can allow more leeway for the single-representative constituencies (especially if we don't introduce any element of favoritism on the national list).
5.) The election of the president of the government would be as it is now, by the Congress. It's always possible to require that the president be the head of one of the national lists (or the second in the case of the first's inability to assume the role) to reinforce the sense of legitimacy. A direct election of the President of the Government is complicated in a system like ours that isn't presidential ((focused on the president)).
6.) Get rid of the Senate, which actually doesn't do much other than waste money. In the case of excessive opposition from the CC.AA. (although I would resist the temptation as much as possible), a Senate could be created with many fewer senators, 51 or so, elected by the independent Assemblies in proportion to the population of each constituency. But if this is the case, the Senate should only address very specific issues directly related to the geographic structure of the State.
7.) Setting the date of the election in a systematic manner (for example, the second Sunday of October or so every 5 years). If we want the representatives to be independent from the single-member constituencies, they have to have a clear timetable that allows them to organize without relying completely on the party.
8.) Eliminate restrictions like the prohibition of polls on the last week or the day of reflection, as these make little sense in the world of the internet.
9.) Establish a system of funding similar to the EU, with a percentage public and the rest private. Private donations, limited to a reasonable amount, would be managed by a commission that would publish information on all donations.
I hope that I haven't left out any important party of the design. A sharp reader will note that what I propose is very similar to the German system, borrowing from the American system as well. It isn't incidental. In the same way, we should be aware of how the system works in practice and allow adjustment with time. Society changes and with it our political system.
On the other hand I haven't spoken of either the municipal elections or the independent elections. I am leaving this for another day (although this is a post of mine about how to reorganize the municipalities).
In conclusion, I will only venture to say that I don't think the system I have proposed works miracles. Although I think there is a reasonable possibility that it will improve the political system of Spain, there are many other important reforms and finally, whether we like it or not, modern democracies are always a bit "disheartening". Let's be practical.
Así que lo odiaremos.
Español:
Así que lo odiaremos. Porque puede soportarlo. Porque él no es nuestro héroe, es un guardián silente, Un protector vigilante. Un caballero oscuro.
English: So we'll hate (him). Because he can take it. Because he isn't our hero, he is a silent guardian, A watchful protector. A dark knight.
La Pistola y El Corazón de Los Lobos
In English:
The Gun and The Heart
by Los Lobos
I don't know how to tell you
I don't know how to explain
That here there's no remedy
For what I feel
For what I feel
The moon tells me one thing
The stars tell me another
And the light of day sings to me
This sad song
This sad song
The kisses that you gave me, my love
Are what is killing me
Already my tears are drying
With my gun and my heart
And here I always spend my life with
my gun and my heart
I don't know how to love you
I don't know how to hold you
Why won't [it] leave me
Pain that I have
The pain that I have
This night so dark with your
Shadows so calm
And the wind continues singing to me
This humble song
This humble song
The kisses that you gave me, my love
Are what is killing me
Already my tears are drying
With my gun and my heart
And here I always spend my life with
my gun and my heart
En Español:
La Pistola y El Corazón
de Los Lobos
No se como decirte
No se como explicarte
Que aqui no hay remedio
De lo que siento yo
De lo que siento yo
La luna me dice una cosa
Las estrellas me dicen otra
Y la luz del dia me canta
Esta triste cancion
Esta triste cancion
Los besos que me diste mi amor
Son los que me estan matando
Ya las lagrimas me estan secando
Con mi pistola y mi corazon
Y aqui siempre paso la vida con
La pistola y el corazon
No se como amarte
No se como abrazarte
Porque no se me deja
Dolor que tengo yo
El dolor que tengo yo
Esta noche tan oscura con sus
Sombras tan tranquilos
Y el viento me sige cantando
Este humilde cancion
Este humilde cancion
Los besos que me diste mi amor
Son los que me estan matando
Ya las lagrimas me estan secando
Con mi pistola y mi corazon
Y aqui siempre paso la vida con
La pistola y el corazon
El Otro Yo de Mario Benedetti
The Other Me
by Mario Benedetti
He was a normal boy: his pants were baggy, he read comics, ate noisily, picked his nose, snored during naps, he was called Armando Normal in all except for one thing: he had Other Me.
The Other Me had poetry in his eyes, fell in love with actresses, lied cautiously, loved evenings. The boy worried about his Other Me greatly and felt uncomfortable around his friends. For his part the Other Me was melancholy, and because of this, Armando couldn’t be as ordinary as he wanted.
One evening Armando came home from work tired, slipped off his shoes, moved his toes slowly and turned on the radio. Mozart was on the radio, but the boy slept. When the Other Me woke he cried inconsolably. At first, the boy didn’t know what to do, but soon he composed himself and thoroughly reprimanded the Other Me. The Other Me said nothing, but the next morning he had committed suicide.
At first the death of the Other Me was a shock for poor Armando, but right away he thought that now he could be completely ordinary. This thought comforted him.
There had been only five days of mourning, when he took to the street to show off his new and complete ordinariness. From far off he saw his friends approaching. This filled him with joy and immediately he broke into laughter.
But when they passed close to him, they didn’t notice his presence. To make things worse, the boy could hear what they said: “Poor Armando. And to think that he seemed so strong and healthy”.
The boy didn’t have any more desire to continue laughing and, at the same time, he felt a lump in his throat that seemed slightly nostalgic. But he couldn’t feel truly sad, because all of his melancholy had died with the Other Me.
[[ TODO: add in mp3 of John speaking the above in English ]]
En Español
El Otro Yo
de Mario Benedetti
Se trataba de un muchacho corriente: en los pantalones se le formaban rodilleras, leía historietas, hacía ruido cuando comía, se metía los dedos a la naríz, roncaba en la siesta, se llamaba Armando Corriente en todo menos en una cosa: tenía Otro Yo.
El Otro Yo usaba cierta poesía en la mirada, se enamoraba de las actrices, mentía cautelosamente , se emocionaba en los atardeceres. Al muchacho le preocupaba mucho su Otro Yo y le hacía sentirse imcómodo frente a sus amigos. Por otra parte el Otro Yo era melancólico, y debido a ello, Armando no podía ser tan vulgar como era su deseo.
Una tarde Armando llegó cansado del trabajo, se quitó los zapatos, movió lentamente los dedos de los pies y encendió la radio. En la radio estaba Mozart, pero el muchacho se durmió. Cuando despertó el Otro Yo lloraba con desconsuelo. En el primer momento, el muchacho no supo que hacer, pero después se rehizo e insultó concienzudamente al Otro Yo. Este no dijo nada, pero a la mañama siguiente se habia suicidado.
Al principio la muerte del Otro Yo fue un rudo golpe para el pobre Armando, pero enseguida pensó que ahora sí podría ser enteramente vulgar. Ese pensamiento lo reconfortó.
Sólo llevaba cinco días de luto, cuando salió a la calle con el propósito de lucir su nueva y completa vulgaridad. Desde lejos vio que se acercaban sus amigos. Eso le lleno de felicidad e inmediatamente estalló en risotadas.
Sin embargo, cuando pasaron junto a él, ellos no notaron su presencia. Para peor de males, el muchacho alcanzó a escuchar que comentaban: «Pobre Armando. Y pensar que parecía tan fuerte y saludable».
El muchacho no tuvo más remedio que dejar de reír y, al mismo tiempo, sintió a la altura del esternón un ahogo que se parecía bastante a la nostalgia. Pero no pudo sentir auténtica melancolía, porque toda la melancolía se la había llevado el Otro Yo.
[[ TODO: add in mp3 of John speaking the above in Spanish ]]
Soneto XXX de Garcilaso de la Vega
En Español:
Soneto XXX
de Garcilaso de la Vega
Sospechas, que en mi triste fantasía
puestas, hacéis la guerra a mi sentido,
volviendo y revolviendo el afligido
pecho, con dura mano noche y día;
ya se acabó la resistencia mía
y la fuerza del alma; ya rendido
vencer de vos me dejo, arrepentido
de haberos contrastado en tal porfía.
Llevadme a aquel lugar tan espantable,
que, por no ver mi muerte allí esculpida,
cerrados hasta aquí tuve los ojos.
Las armas pongo ya, que concedida
no es tan larga defensa al miserable;
colgad en vuestro carro mis despojos.
In English:
Sonnet XXX
by Garcilaso de la Vega
Suspicions, that in my sad fantasy
put, making war with my sanity,
coming and stirring my stricken
chest, with a hard hand night and day;
already my resistance is gone
and the strength of my soul; already spent
to win you left me, regretted
having checked each insistence
take me somewhere so frightening,
that, not to see my death sculpted there,
I close my eyes until I have. (?)
I place weapons, given that
it isn’t too long a defense of the miserable;
hang my remains in your car. (?)
¿Vale la pena estudiar? (2) Datos básicos
Is going to university worth it? (2) Basic facts
by Samuel Bentolila
Apparently, many youths in this country think that “studying is a scam”, according to an article in El Confidencial. True or not, if young people believe it, we would be facing a serious problem. So, today I address once again last week’s question answered by Florentino Felgueroso, Luis Garicano and Sergi Jimenéz, bringing some basic additional facts about the economic viability of studying in Spain.
A simple form of calculating the (financial) return of studying is to see how salary changes when the level of education is increased , defined as follows:
(Compensation in unemployment would be unemployment benefits, if they’re available.)
As changing the level of study affects not only income but also future income, the decision to continue studying or not will depend on this variable: the difference between (a) the present value of the sum of expected discounted future income flows for someone with a higher level of education (level 1) and (b) this value for someone with a lower level of education (level 0).
The idea is to add present and future income, discounting them – that is, weighting them less – for what happens in the future instead of today for distinct educational levels, and find the difference between these sums. It is also necessary to subtract the cost of attaining a level 1 education. If the difference is positive the person will decide to continue studying and otherwise not.
Given the importance of future income flows, I’m going to focus on workers older than 20 (for those between 16 and 19 years the revelations that follow are even more significant).
We will approximate the probability of being unemployed by the unemployment rate. This varies greatly with the level of education. Chart 1 shows the average unemployment rates by education level for the population of 20-24 years and of 30-44 years in the period 2005-2010 in Spain.
Chart 1 – Rate of unemployment by level of education and age, 2005-2010 (%)
We see that the rate of unemployment is much greater for the youngest (on average, 22% versus 11%). Later, workers from 20 to 24 years old that finish mandatory secondary education (ESO, 1st stage) have an unemployment rate 5.6 percentage points less than those that only achieved primary school education and for those from 30 to 44 years old, 5.1 points less. The failure to complete secondary school in the ESO is apparently very costly.
In the third place, compared with having finished ESO, having upper-level secondary education (Bachelor’s and FP, 2nd stage) reduces the rate of unemployment by almost 4 percentage points and having higher education (pre-doctoral) by 5 points. In the 30 to 44 year age group the respective advantages are of 3.4 and 7.2 points. The economic incentive to study past ESO is not, in principle, insignificant.
Additionally, the increase in the employment rate for having studied more is also significant, although less so than in other countries. Graph A7.1, taken from Education Review. OECD Indicators 2010, shows that the income derived from secondary education of the 2nd stage is 19% greater than that of a lesser educational level, compared to 22% on average in OECD countries. Still, for workers from 25 to 34 years old, the difference is only 7% in Spain, compared to 18% in OECD countries.
Chart A7.1 (from Table A7.1)
Relative incomes from labor (2008 or indicated reference year)
By level of training of the population from 25 to 64 years (second stage of Secondary Education = 100)
The difference is greatest for tertiary education or better. With respect to post-mandatory secondary education, performance is 38% compared to 53% in OECD countries. Only in Sweden and Norway is the difference less (probably because of the wage compression resulting from collective bargaining, which is very centralized). Some of this lower level of income can be ascribed to the fact that, as Florention, Luis and Sergei noted in their post, many workers can only get jobs they are overqualified for. (Here are the facts.)
We could now calculate changes in expected incomes derived from an increase in the level of education. But, although it is interesting, this measure is limited. For one thing, these data do not take into account other characteristics like gender, experience, cohort, etc. and are merely measures that don’t capture causal effects: as Antonio Cabrales has been explaining, for example here, evaluating the causal effects of education is not trivial.
In addition, the well-being of an individual does not only depend on salary, but also other working conditions, like the length and composition of a work day. Only the probability of employment is not of little importance either, but also the stability of employment. As we have noted often on this blog (for example, here and here), the temporary employment rate is very high, especially among youths (data from 2005-2010): 58% of those from 20 to 24 years old compared to 42% of the workers from 30 to 39% and 22% of those from 40 to 49 years old.
More concretely, the distribution of educational level by type of work, for example in 2009:3, is as follows (thanks to J. Ignacio García-Pérez who gave me the figures):
We see that temporary workers have a level of education much lower than the permanent workers. This could be due to the fact that having a level of study much higher reduces the probability that the worker is offered a temporary contract or other reasons.
In total, the facts suggest that reaching a higher educational level helps to obtain better salaries, realizes a lower unemployment rate, and provides more stable employment. Without doubt, these favorable effects don’t seem to induce sufficient demand for education (except in crises). In the next entries, various collaborators will present results from analysis of the decision to pursue further study and some implications for public policy.
by Samuel Bentolila
Apparently, many youths in this country think that “studying is a scam”, according to an article in El Confidencial. True or not, if young people believe it, we would be facing a serious problem. So, today I address once again last week’s question answered by Florentino Felgueroso, Luis Garicano and Sergi Jimenéz, bringing some basic additional facts about the economic viability of studying in Spain.
A simple form of calculating the (financial) return of studying is to see how salary changes when the level of education is increased , defined as follows:
Expected income = [Probability of employment * Salary] + [Probability of unemployment * Compensation in unemployment]
(Compensation in unemployment would be unemployment benefits, if they’re available.)
As changing the level of study affects not only income but also future income, the decision to continue studying or not will depend on this variable: the difference between (a) the present value of the sum of expected discounted future income flows for someone with a higher level of education (level 1) and (b) this value for someone with a lower level of education (level 0).
The idea is to add present and future income, discounting them – that is, weighting them less – for what happens in the future instead of today for distinct educational levels, and find the difference between these sums. It is also necessary to subtract the cost of attaining a level 1 education. If the difference is positive the person will decide to continue studying and otherwise not.
Given the importance of future income flows, I’m going to focus on workers older than 20 (for those between 16 and 19 years the revelations that follow are even more significant).
We will approximate the probability of being unemployed by the unemployment rate. This varies greatly with the level of education. Chart 1 shows the average unemployment rates by education level for the population of 20-24 years and of 30-44 years in the period 2005-2010 in Spain.
Chart 1 – Rate of unemployment by level of education and age, 2005-2010 (%)
We see that the rate of unemployment is much greater for the youngest (on average, 22% versus 11%). Later, workers from 20 to 24 years old that finish mandatory secondary education (ESO, 1st stage) have an unemployment rate 5.6 percentage points less than those that only achieved primary school education and for those from 30 to 44 years old, 5.1 points less. The failure to complete secondary school in the ESO is apparently very costly.
In the third place, compared with having finished ESO, having upper-level secondary education (Bachelor’s and FP, 2nd stage) reduces the rate of unemployment by almost 4 percentage points and having higher education (pre-doctoral) by 5 points. In the 30 to 44 year age group the respective advantages are of 3.4 and 7.2 points. The economic incentive to study past ESO is not, in principle, insignificant.
Additionally, the increase in the employment rate for having studied more is also significant, although less so than in other countries. Graph A7.1, taken from Education Review. OECD Indicators 2010, shows that the income derived from secondary education of the 2nd stage is 19% greater than that of a lesser educational level, compared to 22% on average in OECD countries. Still, for workers from 25 to 34 years old, the difference is only 7% in Spain, compared to 18% in OECD countries.
Chart A7.1 (from Table A7.1)
Relative incomes from labor (2008 or indicated reference year)
By level of training of the population from 25 to 64 years (second stage of Secondary Education = 100)
The difference is greatest for tertiary education or better. With respect to post-mandatory secondary education, performance is 38% compared to 53% in OECD countries. Only in Sweden and Norway is the difference less (probably because of the wage compression resulting from collective bargaining, which is very centralized). Some of this lower level of income can be ascribed to the fact that, as Florention, Luis and Sergei noted in their post, many workers can only get jobs they are overqualified for. (Here are the facts.)
We could now calculate changes in expected incomes derived from an increase in the level of education. But, although it is interesting, this measure is limited. For one thing, these data do not take into account other characteristics like gender, experience, cohort, etc. and are merely measures that don’t capture causal effects: as Antonio Cabrales has been explaining, for example here, evaluating the causal effects of education is not trivial.
In addition, the well-being of an individual does not only depend on salary, but also other working conditions, like the length and composition of a work day. Only the probability of employment is not of little importance either, but also the stability of employment. As we have noted often on this blog (for example, here and here), the temporary employment rate is very high, especially among youths (data from 2005-2010): 58% of those from 20 to 24 years old compared to 42% of the workers from 30 to 39% and 22% of those from 40 to 49 years old.
More concretely, the distribution of educational level by type of work, for example in 2009:3, is as follows (thanks to J. Ignacio García-Pérez who gave me the figures):
We see that temporary workers have a level of education much lower than the permanent workers. This could be due to the fact that having a level of study much higher reduces the probability that the worker is offered a temporary contract or other reasons.
In total, the facts suggest that reaching a higher educational level helps to obtain better salaries, realizes a lower unemployment rate, and provides more stable employment. Without doubt, these favorable effects don’t seem to induce sufficient demand for education (except in crises). In the next entries, various collaborators will present results from analysis of the decision to pursue further study and some implications for public policy.
Medicare I
Medicare I
by Juan Rubio-Ramírez on 1 October 2010
One of the most important consequences of the recent crisis is that markets and rating agencies have shown themselves to be very sensitive to public deficits of western economies. Spanish debt has been downgraded from its highest rating and the same thing has happened with many economies in southern europe.
For this reason, in a bid to calm the markets, political leaders have announced and launched adjustment plans and tighter budgets everywhere (see, for example, the latest out of France).
As I've pointed out more than once on this blog, western economies' fiscal problems are more structural than crisis-related. The aging population, on one hand, and the increase in public health spending per person, on the other, pose long-term fiscal problems related to pensions and health -- much more important than those related to the current economic situation.
At Nada es Gratis we're going to dedicate Saturdays to the subject of pensions, so I would like to dedicate this post (and those following) to healthcare spending. In particular, I'd like to address healthcare spending in the United States. This federal program pays healthcare costs for older citizens. In 1970 medicare spending was less than one percent of GDP. In 2009 it was 3.5%. A significant increase.
As we can see in the following chart, and as I mentioned above, the majority of the increase in healthcare spending (as a percentage of GDP) on medicare in the United States is due to the per-person spending increase rather than the increase in older people (the chart was created by the CBO for their report on the deficit and long-term debt from December 2005).
As Jesús has said before, this is normal for two reasons. First, new technologies are being developed that are much more effective but at a much greater cost. Second, as our income increases we want to consume more health in relative terms. As has also been mentioned on this blog, medicare spending will become even greater in terms of GDP as the "baby boomer" generation ages.
The problem is that, for reasons Jesús has outlined many times, medicare poses a spending/financing problem for the american government. In the coming week we'll talk about how this will be solved. We hold that the proposed cuts on the spending side don't seem to be sufficient to square the national accounts and that tax increases are inevitable if there are no radical changes to the proposed solution.
by Juan Rubio-Ramírez on 1 October 2010
One of the most important consequences of the recent crisis is that markets and rating agencies have shown themselves to be very sensitive to public deficits of western economies. Spanish debt has been downgraded from its highest rating and the same thing has happened with many economies in southern europe.
For this reason, in a bid to calm the markets, political leaders have announced and launched adjustment plans and tighter budgets everywhere (see, for example, the latest out of France).
As I've pointed out more than once on this blog, western economies' fiscal problems are more structural than crisis-related. The aging population, on one hand, and the increase in public health spending per person, on the other, pose long-term fiscal problems related to pensions and health -- much more important than those related to the current economic situation.
At Nada es Gratis we're going to dedicate Saturdays to the subject of pensions, so I would like to dedicate this post (and those following) to healthcare spending. In particular, I'd like to address healthcare spending in the United States. This federal program pays healthcare costs for older citizens. In 1970 medicare spending was less than one percent of GDP. In 2009 it was 3.5%. A significant increase.
As we can see in the following chart, and as I mentioned above, the majority of the increase in healthcare spending (as a percentage of GDP) on medicare in the United States is due to the per-person spending increase rather than the increase in older people (the chart was created by the CBO for their report on the deficit and long-term debt from December 2005).
As Jesús has said before, this is normal for two reasons. First, new technologies are being developed that are much more effective but at a much greater cost. Second, as our income increases we want to consume more health in relative terms. As has also been mentioned on this blog, medicare spending will become even greater in terms of GDP as the "baby boomer" generation ages.
The problem is that, for reasons Jesús has outlined many times, medicare poses a spending/financing problem for the american government. In the coming week we'll talk about how this will be solved. We hold that the proposed cuts on the spending side don't seem to be sufficient to square the national accounts and that tax increases are inevitable if there are no radical changes to the proposed solution.
Control Remoto de Alejandro Romualdo
Remote Control
by Alejandro Romualdo
In English:
Remote Control
Anonymous, social and belligerent,
my silent body rises.
Eat with me. Smoke. Whistle. Sing.
Fall in love. Suffer and live.
Always correct everything I write.
Always feel my pain. And make it worse.
Quick, run away: I'll get there first.
Brutal, deny myself all pleasure.
From animal nature, breathe.
From animal nature, I look
at the poor: quiet, human.
Ah, my kind, angelic body.
Paid in metal and covered in nonmetal (?)
its right to live in chains.
En Español:
Control Remoto
Anónimo, social y combativo,
mi tácito antropoide se levanta.
Come conmigo. Fuma. Silba. Canta.
Enamoro con él. Padezco y vivo.
Siempre corrije todo lo que escribo.
Siempre intuye el dolor. Y se agiganta.
Veloz, fuga de mí: se me adelanta.
Brutal, me empuja todo lo lascivo.
Desde su límite animal, suspira.
Desde su límite animal, me mira
el pobre: taciturno, humanizado.
¡Ah, mi civil, angélico antropoide,
paga en metal y cobra en metaloide
su derecho a vivir encarcelado!
Canción: "Resistiré" del Dúo Dinamico
En Español:
Resistiré
del Dúo Dinamico
Cuando pierda todas las partidas
Cuando duerma con la soledad
Cuando se cierren las salidas
y la noche no me deje en paz
Cuando sienta miedo del silencio
Cuando cueste mantenerse en pie
Cuando se rebelen los recuerdos
y me pongan contra la pared
[estribillo]
Resistiré! Erguido frente a todos
Me volveré de hierro para endurecer la piel
Aunque los vientos de la vida soplen fuerte
Soy como el junco que se dobla
pero siempre sigue en pie
Resistiré! Para seguir viviendo
Soportaré los golpes y jamás me rendiré
Y aunque los sueños se me rompan en pedazos
Resistiré.... resistiré!
[/estribillo]
Cuando el mundo pierda toda magia
Cuando mi enemigo sea yo
Cuando me apuñale la nostalgia
y no reconozca ni mi voz
Cuando me amenace la locura
Cuando en mi moneda salga cruz
Cuando el diablo pase la factura
o si alguna vez me faltas tú
[[estribillo]]
In English:
I Will Resist!
by the Dynamic Duo
When I lose everything
When I sleep alone
When every avenue is closed to me
and the night leaves me restless
When I'm afraid of silence
When just standing upright costs a lot
When my memories rebel against me
and I'm up against the wall
[chorus]
I will resist! Up against everyone
I will become like steel to thicken my skin
Although the winds of life blow harshly
I'm like the reed that bends
but always persists
I will resist! To continue living
I will endure the blows and never give in
And although my dreams are broken in pieces
I will resist... I will resist!
[/chorus]
When the world loses all its magic
When my enemy is myself
When I'm overcome with nostalgia
and I don't recognize my own voice
When madness threatens
When my coin lands tails-up ((unlucky -trans.))
When the devil passes the buck
or if you need me again
[[chorus]]
La competitividad como estrategia de gobierno
Competitiveness as a government strategy
by Luis Garicano on 22 September 2010
The recent Global Competitiveness Report from the World Economic Forum is very concerned with Spain. In the elaborate ranking provided by the WEF, Spain has fallen 9 places, dropping from a mediocre 33rd to a clearly poor 44th in the world. Some of the countries that have more "competitiveness" than Spain: Qatar, Saudi Arabia, UAE, Malaysia, Chile, Iceland, Tunisia, Kuwait, the Czech Republic, Bahrain, Thailand... Truly, these rankings should be taken with a grain of salt, given that sometimes it is just perceived performance that determines the ranking more than objective factors (and some of these obviously have gotten worse in Spain), but in this case the report has enough credibility, not only for being directed by Xavier Sala-i-Martin, but also for the information it offers in various sub-categories. And if it is true that we are less competitive than Tunisia and Thailand? Can we accept less than developing-nation status? What should we do if not?
In order to put Spain onto a path of sustainable growth, the future leaders of Spain should announce their commitment publicly with this tool (or another similar) as a way to measure their progress in the short turn until the vaunted "new productivity model". Shortcuts of the "we will have the first electric car" type are useless, as they will create an island of development in a desert. We see what we need in each specific area (more about this below), and we will have reaching a competitiveness level similar to the countries we want to be like as a goal: the first 10 on the list (Switzerland, Sweden, Singapore, the United States, Germany, Japan, Finland, Holland, Denmark and Canada). Use of a metric would allow us to simply evaluate the different ministries and departments - it would simply consist of notes measuring the progress in each of these areas using the selected models.
The report addresses (similarly to the article by Sala-i-Martin et al. p3) "measuring the factors that foster sustainable economic growth and prosperity." And for this reason we define competitiveness as "the group of institutions, policies and factors that determine the level of productivity of a country" (p4 of the report). The institutions, policies and factors are broken down as Institutions, Infrastructure, Macroeconomic Environment, Health and Primary Education, Higher Education, Goods, Labor and Financial Markets, Technology, Market Size, Business Complexity and Innovation. This seems reasonable and complete, in the sense that it addresses all of the factors experts (Sala-i-Martin among them, summarized - for example - in this famous report) have highlighted. The authors consider the five primary factors to be the development base, the markets that determine efficiency, and the last two factors that determine innovation.
Spain is behind in many areas. The analysis is on pages 304 and 305 and re-iterates many of the topics we have discussed here often. Institutions are a disaster (ranked 53rd); why?: the weight of regulation (110th in the world, which speaks for itself), the efficacy of the judicial system, etc. A bright spot: an excellent police force; primary education: 93rd in the world - completely unacceptable; quality of the education system: 107th in the world; labor market, 115th in the world... With numbers like these, Spain is a country heading towards stagnation, that much is clear. And yes, as you have questioned in the comments, with good reason, the methodology etc. But I think that if it is indeed as it looks, there are some huge problems in many areas that need to be addressed soon, and pretty much everything in two areas: the regulatory and education systems.
How to we get ourselves out of this hole? I think that we can't develop a strategy of any type without a system of measurement that will allow us to determine whether we are improving or not; and I think the Global Competitiveness reports are a means to do this.
In the business world there isn't any doubt that strategy requires translating grand ideas into concrete and measurable goals. Allow me to provide an example. Southwest Airlines wants to be an airline with excellent service and low cost. This is their strategy; if there weren't ways to quantify this and bring it down to earth, it wouldn't help anything. Which operational objectives have been chosen to execute their strategy? (1) More frequent flights and (2) increased utilization of each plane's capacity (full airplanes). If these two objectives are achieved, customers will be happy and cost will decrease (higher utilization, in a business that is purely capital, is the same as lowering cost). How will we achieve these objectives? Three ways (1) choose routes where it is possible to have at least 5 flights per day going and returning ((round trips -trans)); (2) resupply and prepare an airplane to fly again 20 minutes after landing; and (3) avoid delays during takeoff and landing, ensuring that landing is within 10 minutes of initial approach (we're not going to speak of flying into Heathrow).
Given the above, SWA has transformed from an unknown with little credibility (in terms of good service and low cost) ((into a major player -trans)) using a solid strategy as a base for development of an intermediate objective and then achieving it with operative measures. And another thing: SWA doesn't try to be everything to everyone. To give you an idea, SWA is like EasyJet, being an airline that treats you well but is entirely spartan (not like Ryan Air, who like to pick on). They have chosen not to fly many desirable routes in order to stick to the key elements that allow them to turn around planes in 20 minutes.
For Spain, it is necessary to be reasonable about who we want to be (Finland? Singapore?). Announcing this loudly is necessary in order to bring all parts of society together behind these goals. And then, and this is most important, translating this abstract idea into a concrete measure. And here is where I think that indicators like those from the WEF, or those from the WB ((World Bank --trans.)) or the OECD can be very useful. It is beneficial to describe government objectives for each area centered on improving in key dimensions, and to do so quickly. Is this possible? Yes. Finland, after a very severe crisis in the late 80s, charged up its batteries (?) and did it; Chile as well, has separated itself from its much less successful hispanic neighbors.
If Spain wants to return to growth, its leaders should decide that competitiveness is a strategic objective, support it with a large social consensus, and choose a set of individual metrics for measuring progress until it has risen to the top of the WEF rankings.
by Luis Garicano on 22 September 2010
The recent Global Competitiveness Report from the World Economic Forum is very concerned with Spain. In the elaborate ranking provided by the WEF, Spain has fallen 9 places, dropping from a mediocre 33rd to a clearly poor 44th in the world. Some of the countries that have more "competitiveness" than Spain: Qatar, Saudi Arabia, UAE, Malaysia, Chile, Iceland, Tunisia, Kuwait, the Czech Republic, Bahrain, Thailand... Truly, these rankings should be taken with a grain of salt, given that sometimes it is just perceived performance that determines the ranking more than objective factors (and some of these obviously have gotten worse in Spain), but in this case the report has enough credibility, not only for being directed by Xavier Sala-i-Martin, but also for the information it offers in various sub-categories. And if it is true that we are less competitive than Tunisia and Thailand? Can we accept less than developing-nation status? What should we do if not?
In order to put Spain onto a path of sustainable growth, the future leaders of Spain should announce their commitment publicly with this tool (or another similar) as a way to measure their progress in the short turn until the vaunted "new productivity model". Shortcuts of the "we will have the first electric car" type are useless, as they will create an island of development in a desert. We see what we need in each specific area (more about this below), and we will have reaching a competitiveness level similar to the countries we want to be like as a goal: the first 10 on the list (Switzerland, Sweden, Singapore, the United States, Germany, Japan, Finland, Holland, Denmark and Canada). Use of a metric would allow us to simply evaluate the different ministries and departments - it would simply consist of notes measuring the progress in each of these areas using the selected models.
The report addresses (similarly to the article by Sala-i-Martin et al. p3) "measuring the factors that foster sustainable economic growth and prosperity." And for this reason we define competitiveness as "the group of institutions, policies and factors that determine the level of productivity of a country" (p4 of the report). The institutions, policies and factors are broken down as Institutions, Infrastructure, Macroeconomic Environment, Health and Primary Education, Higher Education, Goods, Labor and Financial Markets, Technology, Market Size, Business Complexity and Innovation. This seems reasonable and complete, in the sense that it addresses all of the factors experts (Sala-i-Martin among them, summarized - for example - in this famous report) have highlighted. The authors consider the five primary factors to be the development base, the markets that determine efficiency, and the last two factors that determine innovation.
Spain is behind in many areas. The analysis is on pages 304 and 305 and re-iterates many of the topics we have discussed here often. Institutions are a disaster (ranked 53rd); why?: the weight of regulation (110th in the world, which speaks for itself), the efficacy of the judicial system, etc. A bright spot: an excellent police force; primary education: 93rd in the world - completely unacceptable; quality of the education system: 107th in the world; labor market, 115th in the world... With numbers like these, Spain is a country heading towards stagnation, that much is clear. And yes, as you have questioned in the comments, with good reason, the methodology etc. But I think that if it is indeed as it looks, there are some huge problems in many areas that need to be addressed soon, and pretty much everything in two areas: the regulatory and education systems.
How to we get ourselves out of this hole? I think that we can't develop a strategy of any type without a system of measurement that will allow us to determine whether we are improving or not; and I think the Global Competitiveness reports are a means to do this.
In the business world there isn't any doubt that strategy requires translating grand ideas into concrete and measurable goals. Allow me to provide an example. Southwest Airlines wants to be an airline with excellent service and low cost. This is their strategy; if there weren't ways to quantify this and bring it down to earth, it wouldn't help anything. Which operational objectives have been chosen to execute their strategy? (1) More frequent flights and (2) increased utilization of each plane's capacity (full airplanes). If these two objectives are achieved, customers will be happy and cost will decrease (higher utilization, in a business that is purely capital, is the same as lowering cost). How will we achieve these objectives? Three ways (1) choose routes where it is possible to have at least 5 flights per day going and returning ((round trips -trans)); (2) resupply and prepare an airplane to fly again 20 minutes after landing; and (3) avoid delays during takeoff and landing, ensuring that landing is within 10 minutes of initial approach (we're not going to speak of flying into Heathrow).
Given the above, SWA has transformed from an unknown with little credibility (in terms of good service and low cost) ((into a major player -trans)) using a solid strategy as a base for development of an intermediate objective and then achieving it with operative measures. And another thing: SWA doesn't try to be everything to everyone. To give you an idea, SWA is like EasyJet, being an airline that treats you well but is entirely spartan (not like Ryan Air, who like to pick on). They have chosen not to fly many desirable routes in order to stick to the key elements that allow them to turn around planes in 20 minutes.
For Spain, it is necessary to be reasonable about who we want to be (Finland? Singapore?). Announcing this loudly is necessary in order to bring all parts of society together behind these goals. And then, and this is most important, translating this abstract idea into a concrete measure. And here is where I think that indicators like those from the WEF, or those from the WB ((World Bank --trans.)) or the OECD can be very useful. It is beneficial to describe government objectives for each area centered on improving in key dimensions, and to do so quickly. Is this possible? Yes. Finland, after a very severe crisis in the late 80s, charged up its batteries (?) and did it; Chile as well, has separated itself from its much less successful hispanic neighbors.
If Spain wants to return to growth, its leaders should decide that competitiveness is a strategic objective, support it with a large social consensus, and choose a set of individual metrics for measuring progress until it has risen to the top of the WEF rankings.
"Soledad" de Alejandro Romulado
In English:
LONELINESS I
ONLY THE SKY in the sky
and in the air
only the bird
only the bird in the air
and another time the sky
and no more the bird
and no more the sky
definitely alone
sky and bird.
LONELINESS II
Tall waves.
Deserted seas.
Deserted skies.
Open.
Dry sand
and only. Sky
dry.
Silence. Deserted
sea.
And desert.
LONELINESS III
I OPEN
the door: the leaves
shake.
The glass of water remains
on the desolate table.
It is easy to walk on water,
to walk on fire and on air,
but to cross over the earth
gives me leaden feet, Anteo.
I have light feet still,
and my heel is the reason to look for
trees that sing and birds
that unfold in the sky as trees.
Oh display window, divinely clear
for the hazy dreams of men,
Glass separates us, only glass.
It is the final limit of desire
that looks only for the foresight
of a roast bird, of one leg (?)
that allows them to keep dreaming.
See the glistening pheasants // fulgurar > 'to flash/pulse' > 'glisten'?
rotten, and the deer that lie
upon the settings (of an ornate table) // fuentes > 'fountains/sources' > 'ornaments'?
where no one considers the cost
of deer and pheasant. Everyone agrees,
A table with pleasures enough to go around
where the flavor of the world is not bitter.
To measure the heavens and the earth
I have words strong and bright
but to know what you are thinking
just a look from you will do.
En Español:
SOLEDAD I
SOLO EL CIELO en el cielo
y en el aire
el pájaro solo
sólo el pájaro en el aire
y otra vez el cielo
y nada más que el pájaro
y nada más que el cielo
definitivamente solo
cielo y pájaro.
SOLEDAD II
CIELOS ALTOS
Olas altas.
Desiertos mares.
Desiertos cielos.
Abiertos.
Arena seca
y sola. Cielo
seco.
Silencio. Desierto
mar.
Y desierto.
SOLEDAD III
ABRO
la puerta: tiemblan
las ojas.
El vaso de agua sigue
sobre la mesa desolada.
Fácil es caminar sobre las aguas,
caminar sobre el fuego y sobre el aire,
pero para cruzar sobre la tierra
préstame duros pies de plomo, Anteo.
Tengo los pies ligeros todavía,
y mi talón es la razón que busca
los árboles que cantan y las aves
que se abren en el cielo como árboles.
Oh vitrina, divina transparencia
para el opaco sueño de los hombres.
Nos separa un cristal. Sólo un cristal.
Es el límite exacto del deseo
que busca sólo la clarividencia
de un ave asada, de una pierna sola
que los ayude a continuar soñando.
Observo los faisanes que fulguran
podridos, y los ciervos que reposan
sobre las fuentes (de una mesa ornada)
donde nadie discute sobre el precio
del ciervo y del faisán. Todos de acuerdo,
Mesa redonda de las alegrías
donde el sabor del mundo no es amargo.
Para medir los cielos y la tierra
tengo palabras duras y brillantes,
pero para saber lo que tú piensas
una mirada es la extensión más pura.
LONELINESS I
ONLY THE SKY in the sky
and in the air
only the bird
only the bird in the air
and another time the sky
and no more the bird
and no more the sky
definitely alone
sky and bird.
LONELINESS II
Tall waves.
Deserted seas.
Deserted skies.
Open.
Dry sand
and only. Sky
dry.
Silence. Deserted
sea.
And desert.
LONELINESS III
I OPEN
the door: the leaves
shake.
The glass of water remains
on the desolate table.
It is easy to walk on water,
to walk on fire and on air,
but to cross over the earth
gives me leaden feet, Anteo.
I have light feet still,
and my heel is the reason to look for
trees that sing and birds
that unfold in the sky as trees.
Oh display window, divinely clear
for the hazy dreams of men,
Glass separates us, only glass.
It is the final limit of desire
that looks only for the foresight
of a roast bird, of one leg (?)
that allows them to keep dreaming.
See the glistening pheasants // fulgurar > 'to flash/pulse' > 'glisten'?
rotten, and the deer that lie
upon the settings (of an ornate table) // fuentes > 'fountains/sources' > 'ornaments'?
where no one considers the cost
of deer and pheasant. Everyone agrees,
A table with pleasures enough to go around
where the flavor of the world is not bitter.
To measure the heavens and the earth
I have words strong and bright
but to know what you are thinking
just a look from you will do.
En Español:
SOLEDAD I
SOLO EL CIELO en el cielo
y en el aire
el pájaro solo
sólo el pájaro en el aire
y otra vez el cielo
y nada más que el pájaro
y nada más que el cielo
definitivamente solo
cielo y pájaro.
SOLEDAD II
CIELOS ALTOS
Olas altas.
Desiertos mares.
Desiertos cielos.
Abiertos.
Arena seca
y sola. Cielo
seco.
Silencio. Desierto
mar.
Y desierto.
SOLEDAD III
ABRO
la puerta: tiemblan
las ojas.
El vaso de agua sigue
sobre la mesa desolada.
Fácil es caminar sobre las aguas,
caminar sobre el fuego y sobre el aire,
pero para cruzar sobre la tierra
préstame duros pies de plomo, Anteo.
Tengo los pies ligeros todavía,
y mi talón es la razón que busca
los árboles que cantan y las aves
que se abren en el cielo como árboles.
Oh vitrina, divina transparencia
para el opaco sueño de los hombres.
Nos separa un cristal. Sólo un cristal.
Es el límite exacto del deseo
que busca sólo la clarividencia
de un ave asada, de una pierna sola
que los ayude a continuar soñando.
Observo los faisanes que fulguran
podridos, y los ciervos que reposan
sobre las fuentes (de una mesa ornada)
donde nadie discute sobre el precio
del ciervo y del faisán. Todos de acuerdo,
Mesa redonda de las alegrías
donde el sabor del mundo no es amargo.
Para medir los cielos y la tierra
tengo palabras duras y brillantes,
pero para saber lo que tú piensas
una mirada es la extensión más pura.
El sistema español de pensiones: implicaciones de no hacer nada
The Spanish pension system: implications of doing nothing
by Sergi Jiménez
The unstoppable process of aging of the Spanish population, due to a combination of a greater life expectancy coupled with a drastic reduction in births will result in, almost certainly, an increasing depletion of the Social Security accounts. So, according to a report by the Economic and Financial Director of the European Commission (see here) of the current moderate surplus (1% of GDP due to income contribution of 10% and benefit costs of pensioners of 8.3% - see here) it will continue ((to deteriorate -trans)) in the absence of reforms and, taking into account the demographic projections of the INE for the years 2009-2049, a deficit of 6% of GDP will be reached by 2050 (produced by income contribution of 10% and benefit spending of 16%) and, assuming that income contribution does not change, close to 10 percent in 2060. The magnitude of the projected deficit makes proposals to limit the generosity of the system and the need to work more and longer indispensable to maintain our pension system. Most OECD countries, following an aging process similar to that of Spain (although not always combined with the decimation of births that we have), have already implemented or are in the process of implementing measures of containing and restructuring pension spending. Advances of reform in Germany (raising the retirement age among other reforms), France (also raising the retirement age), Italy and the United Kingdom also suggest that such measures are necessary.
As Figure 1 shows, the Spanish situation (compared to Germany and Italy for example), has the unique property that the largest pension cost in the near future will occur when the working-age population decreases (the bar representing the current 10 year old cohort group is about half as long as for 30 year olds, which is in turn is practically double that of 65 year olds). The dependency ratio, measuring the proportion of the population of working age divided by the population 65 or older, is currently around 4 but should be around 1.75 in 2049. In this context, we wonder what implications maintaining the current system will have given demographic projections. We will start by detailing the consequences of pension spending in the absence of reforms and later consider the fiscal changes ((increase in taxes -trans)) needed to sustain our current level of generosity.
[Figure 1. The size of insurance cohort groups in European countries for various ages relative to the 40 year old group.]
Pension spending in relation to GDP can be seen as the product of four factors: the coverage rate of pensioners (denoted tc) defined as the number of pensioners over the total number of people 65 and older, the dependency rate (denoted td) defined as the number of workers for each person 65 and older, the inverse of the employment rate (1/e) and the ratio between the average pension and the average productivity, also known as the generosity of the system (g). So, we get
Spending on Pensioners / GDP = (NP * P) / (E * Q) =
= (NP / P65) * (P65 / PET) * (PET / E) * (P / Q) = (tc)*(td)*(1/e)*g
Where:
NP = Number of Pensions; P = Average Pension; E = Employment; Q = Average Productivity; P65 = Population older than 65; PET = Working age population (from 16 to 64).
Supposing that the primary factor is constant (although it normally tends to grow), if spending is not changed (i.e. the pension eligibility rules and calculations) the fourth factor would not vary. The second factor is the rate of dependence. According to the latest demographic projections of the INE, it will increase from 25% in 2010 to 60.6% in 2049, or similarly, it will more than double (a 2.42x increase). So, if the system is not changed, and only the rate of dependency increases, pension spending will increase from 8.3% of GDP (in 2009) to 20.1% in 2049.
If this happens, only a higher rate of employment would help to absorb this increase in spending. A simple calculation reveals that in order to maintain pension spending at 8.3% of GDP we would need an employment rate of 144 percent! But the problem is that, in 2049, even in reaching a "Swedish" (?) employment rate, total employment would decline by 5% due to the decimation of the working age population (remember that the size of the 10 year old cohort group in 2009 is 51% of the 30 year old group in 2009 and that the current best is only 60%). Consequently, with a productivity growth rate of 1.5% per year, GDP will only be (approximately) 1.5x the current level. Certainly in 2049 everyone will be much richer, but that is not the main point, as there is a limit on the degree of between-generation transfers of wealth that can be had without generating disincentives for effort and growth.
Then, can we finance pension spending of 20.1% GDP? Currently 2.4 individuals are required to finance each pensioner, 9 units out of each 100 generated go to finance pensions. In 2050, there will be 1.05 workers for each pensioner, and there would have to be 27 units - three times more. This supposes that fiscal pressure coming from pension spending would increase by 2.78 times (=27*2.4/(9*1.05*1.48))!! Other ways of financing, for example financing by general taxation would bring us to similar conclusions, as the associated increase in fiscal pressure would have grave consequences with respect to employment (financed by the IRPF) or investment (financed by taxing companies) or wrt. both.
There are some who question the projected long-term pension spending, arguing that the demographic projections aren't completely reliable. Even if this is true, what we know with certainty is that, in absence of extraordinary unforeseeable changes in the current demographic trends, the future dependency rate will be much higher than it is now, and we must take measures in anticipation of this today.
The picture will be somewhat darker if we consider other spending related to aging in the analysis, such as health expenditures and related costs, that should probably also be overhauled. Although there are some that think we spend relatively little on the older population (see here), the problem isn't really how much we spend as a society on this group, but at what rate this will become a larger part of total spending. Without altering the growth rate of said parts in due time will leech resources from other programs of public spending (infrastructure, education, training) that are crucial for the future growth of the Spanish economy, and consequently for the sustainability of the pension system that, remember, is sustained by the work of our children.
by Sergi Jiménez
The unstoppable process of aging of the Spanish population, due to a combination of a greater life expectancy coupled with a drastic reduction in births will result in, almost certainly, an increasing depletion of the Social Security accounts. So, according to a report by the Economic and Financial Director of the European Commission (see here) of the current moderate surplus (1% of GDP due to income contribution of 10% and benefit costs of pensioners of 8.3% - see here) it will continue ((to deteriorate -trans)) in the absence of reforms and, taking into account the demographic projections of the INE for the years 2009-2049, a deficit of 6% of GDP will be reached by 2050 (produced by income contribution of 10% and benefit spending of 16%) and, assuming that income contribution does not change, close to 10 percent in 2060. The magnitude of the projected deficit makes proposals to limit the generosity of the system and the need to work more and longer indispensable to maintain our pension system. Most OECD countries, following an aging process similar to that of Spain (although not always combined with the decimation of births that we have), have already implemented or are in the process of implementing measures of containing and restructuring pension spending. Advances of reform in Germany (raising the retirement age among other reforms), France (also raising the retirement age), Italy and the United Kingdom also suggest that such measures are necessary.
As Figure 1 shows, the Spanish situation (compared to Germany and Italy for example), has the unique property that the largest pension cost in the near future will occur when the working-age population decreases (the bar representing the current 10 year old cohort group is about half as long as for 30 year olds, which is in turn is practically double that of 65 year olds). The dependency ratio, measuring the proportion of the population of working age divided by the population 65 or older, is currently around 4 but should be around 1.75 in 2049. In this context, we wonder what implications maintaining the current system will have given demographic projections. We will start by detailing the consequences of pension spending in the absence of reforms and later consider the fiscal changes ((increase in taxes -trans)) needed to sustain our current level of generosity.
[Figure 1. The size of insurance cohort groups in European countries for various ages relative to the 40 year old group.]
Pension spending in relation to GDP can be seen as the product of four factors: the coverage rate of pensioners (denoted tc) defined as the number of pensioners over the total number of people 65 and older, the dependency rate (denoted td) defined as the number of workers for each person 65 and older, the inverse of the employment rate (1/e) and the ratio between the average pension and the average productivity, also known as the generosity of the system (g). So, we get
Spending on Pensioners / GDP = (NP * P) / (E * Q) =
= (NP / P65) * (P65 / PET) * (PET / E) * (P / Q) = (tc)*(td)*(1/e)*g
Where:
NP = Number of Pensions; P = Average Pension; E = Employment; Q = Average Productivity; P65 = Population older than 65; PET = Working age population (from 16 to 64).
Supposing that the primary factor is constant (although it normally tends to grow), if spending is not changed (i.e. the pension eligibility rules and calculations) the fourth factor would not vary. The second factor is the rate of dependence. According to the latest demographic projections of the INE, it will increase from 25% in 2010 to 60.6% in 2049, or similarly, it will more than double (a 2.42x increase). So, if the system is not changed, and only the rate of dependency increases, pension spending will increase from 8.3% of GDP (in 2009) to 20.1% in 2049.
If this happens, only a higher rate of employment would help to absorb this increase in spending. A simple calculation reveals that in order to maintain pension spending at 8.3% of GDP we would need an employment rate of 144 percent! But the problem is that, in 2049, even in reaching a "Swedish" (?) employment rate, total employment would decline by 5% due to the decimation of the working age population (remember that the size of the 10 year old cohort group in 2009 is 51% of the 30 year old group in 2009 and that the current best is only 60%). Consequently, with a productivity growth rate of 1.5% per year, GDP will only be (approximately) 1.5x the current level. Certainly in 2049 everyone will be much richer, but that is not the main point, as there is a limit on the degree of between-generation transfers of wealth that can be had without generating disincentives for effort and growth.
Then, can we finance pension spending of 20.1% GDP? Currently 2.4 individuals are required to finance each pensioner, 9 units out of each 100 generated go to finance pensions. In 2050, there will be 1.05 workers for each pensioner, and there would have to be 27 units - three times more. This supposes that fiscal pressure coming from pension spending would increase by 2.78 times (=27*2.4/(9*1.05*1.48))!! Other ways of financing, for example financing by general taxation would bring us to similar conclusions, as the associated increase in fiscal pressure would have grave consequences with respect to employment (financed by the IRPF) or investment (financed by taxing companies) or wrt. both.
There are some who question the projected long-term pension spending, arguing that the demographic projections aren't completely reliable. Even if this is true, what we know with certainty is that, in absence of extraordinary unforeseeable changes in the current demographic trends, the future dependency rate will be much higher than it is now, and we must take measures in anticipation of this today.
The picture will be somewhat darker if we consider other spending related to aging in the analysis, such as health expenditures and related costs, that should probably also be overhauled. Although there are some that think we spend relatively little on the older population (see here), the problem isn't really how much we spend as a society on this group, but at what rate this will become a larger part of total spending. Without altering the growth rate of said parts in due time will leech resources from other programs of public spending (infrastructure, education, training) that are crucial for the future growth of the Spanish economy, and consequently for the sustainability of the pension system that, remember, is sustained by the work of our children.
Absentismo: El derecho de los caraduras
Absenteeism: The right of cheeky bastards
by Luis Garicano and Jesús Fernández-Villaverde
One of the most amazing (and unjustifiable) provisions of our dysfunctional regulation of the labor market has become subject to significant change, discussion and finally abandonment in the final version of labor reform legislation (for a general overview of labor reform, have a look at this excellent post by Samuel Bentolila). Prepare to be amazed. The workers' statute, in article 52 (concerning firing of employees) said that "contracts can be terminated" before reform:
d) For missing work, even justified but intermittent, 20% of business days over two consecutive months or 25% over four non-consecutive months within a period of twelve months, given that the total rate of absenteeism of the others at your workplace is greater than 5% over the same period of time.
For the purposes of the previous paragraph, don't count the following as absences: missing work due to a legal strike, excercising legal obligations ((jury duty? -trans.)), work accidents, maternity, risk during pregnancy (?), sickness due to pregnancy, childbirth or breastfeeding, leave and vacation, sickness or non-work related accidents, when the illness have been certified by the official health service and is at greater than twenty consecutive days, nor leave motivated by financial situation or psychological issues due to gender violence certified by the social care services or health services, as appropriate.
This provision is so terrible that I don't have words to describe it. Given the number of logical and sensible exceptions to the definition of absence (sickness, maternity, pregnancy, legal strikes, etc.), it's amazing that one still needs to miss 20% of the working days in two months in order to be fired: it's more or less missing 8 days out of only 60.
But this is not the most incredible thing. What's crazy is the phrase "given that the total rate of absenteeism at the workplace exceeds 5% in the same period of time". Consequently, if we want a good business culture, a culture of compliance, where coworkers are serious and go to work every day, the cheeky bastard who doesn't remains protected as long as the overall rate of absenteeism is too low for them to be fired. Instead of rewarding good business cultures, article 52d punishes them.
A more formal way of seeing this is that the requirement of 5% is the only thing that is, in a game of the Prisoner's Dilemma, reducies the punishment of those that choose the strategy of "no cooperation" or, put another way, gives them an incentive to deviate ((from the nash equilibrium ?)). As Kreps explains well in a classic article, in the world of incomplete contracts and inseperable contingencies, we can't expect a contract to cover all of the obligations that we have. The function of corporate culture (one of the functions, see this Survey by Ben Hermalin for a complete treatment) is to give us a guide to show us what is expected of us when the unexpected happens, and what we should expect from the company. Corporate culture defines what is considered good behavior in each organization, and what is considered deviation. Although there is always an incentive to take advantage (on the part of the company and the employee), captured by the prisoner's dilemma, we know that if we "do the right thing" even though no one can force us to, the company will as well and the game will be in equilibrium.
What is necessary for this to work? Basically, that the incentive to deviate and take advantage - the difference between the value of behaving and not behaving - is the amount I win in the first period and how much I am punished in the future. The lowere the punishment for deviating will be, the more incentive I have to take advantage and break away from the equilibrium.
Consequently article 52 contains a rule that encourages workers to break the good equilibrium -- to move away from the equilibrium in which everyone is doing what they should because it is our job. Reducing the punishment where there is a good work atmosphere increases the incentive to ruin the atomsphere.
Well, in labor reform, the Governor proposed in Congress a small change in this regulation: to decrease the absenteeism limit from 5% to 2.5%. Like many of the changes that have been made in the first revision of 2010, it is a change in the right direction but too weak -- insufficient.
The PNV, in the Senate, took the necessary steps to remove this connection. Well, the Socialist Party has make it incomprehensible in the final version. It still contains the 2.5% limit but it at the end.
Is there some justification for this requirement of 2.5%? What market failure does this clause address? What increase in wellbeing of anyone (except those who don't go to work) follows from it? What right is being defended other than that of people to be cheeky bastards? As much as we think, we can't come up with any justification - be it strange, twisted or empirically irrelevant - for this requirement of 2.5%.
by Luis Garicano and Jesús Fernández-Villaverde
One of the most amazing (and unjustifiable) provisions of our dysfunctional regulation of the labor market has become subject to significant change, discussion and finally abandonment in the final version of labor reform legislation (for a general overview of labor reform, have a look at this excellent post by Samuel Bentolila). Prepare to be amazed. The workers' statute, in article 52 (concerning firing of employees) said that "contracts can be terminated" before reform:
d) For missing work, even justified but intermittent, 20% of business days over two consecutive months or 25% over four non-consecutive months within a period of twelve months, given that the total rate of absenteeism of the others at your workplace is greater than 5% over the same period of time.
For the purposes of the previous paragraph, don't count the following as absences: missing work due to a legal strike, excercising legal obligations ((jury duty? -trans.)), work accidents, maternity, risk during pregnancy (?), sickness due to pregnancy, childbirth or breastfeeding, leave and vacation, sickness or non-work related accidents, when the illness have been certified by the official health service and is at greater than twenty consecutive days, nor leave motivated by financial situation or psychological issues due to gender violence certified by the social care services or health services, as appropriate.
This provision is so terrible that I don't have words to describe it. Given the number of logical and sensible exceptions to the definition of absence (sickness, maternity, pregnancy, legal strikes, etc.), it's amazing that one still needs to miss 20% of the working days in two months in order to be fired: it's more or less missing 8 days out of only 60.
But this is not the most incredible thing. What's crazy is the phrase "given that the total rate of absenteeism at the workplace exceeds 5% in the same period of time". Consequently, if we want a good business culture, a culture of compliance, where coworkers are serious and go to work every day, the cheeky bastard who doesn't remains protected as long as the overall rate of absenteeism is too low for them to be fired. Instead of rewarding good business cultures, article 52d punishes them.
A more formal way of seeing this is that the requirement of 5% is the only thing that is, in a game of the Prisoner's Dilemma, reducies the punishment of those that choose the strategy of "no cooperation" or, put another way, gives them an incentive to deviate ((from the nash equilibrium ?)). As Kreps explains well in a classic article, in the world of incomplete contracts and inseperable contingencies, we can't expect a contract to cover all of the obligations that we have. The function of corporate culture (one of the functions, see this Survey by Ben Hermalin for a complete treatment) is to give us a guide to show us what is expected of us when the unexpected happens, and what we should expect from the company. Corporate culture defines what is considered good behavior in each organization, and what is considered deviation. Although there is always an incentive to take advantage (on the part of the company and the employee), captured by the prisoner's dilemma, we know that if we "do the right thing" even though no one can force us to, the company will as well and the game will be in equilibrium.
What is necessary for this to work? Basically, that the incentive to deviate and take advantage - the difference between the value of behaving and not behaving - is the amount I win in the first period and how much I am punished in the future. The lowere the punishment for deviating will be, the more incentive I have to take advantage and break away from the equilibrium.
Consequently article 52 contains a rule that encourages workers to break the good equilibrium -- to move away from the equilibrium in which everyone is doing what they should because it is our job. Reducing the punishment where there is a good work atmosphere increases the incentive to ruin the atomsphere.
Well, in labor reform, the Governor proposed in Congress a small change in this regulation: to decrease the absenteeism limit from 5% to 2.5%. Like many of the changes that have been made in the first revision of 2010, it is a change in the right direction but too weak -- insufficient.
The PNV, in the Senate, took the necessary steps to remove this connection. Well, the Socialist Party has make it incomprehensible in the final version. It still contains the 2.5% limit but it at the end.
Is there some justification for this requirement of 2.5%? What market failure does this clause address? What increase in wellbeing of anyone (except those who don't go to work) follows from it? What right is being defended other than that of people to be cheeky bastards? As much as we think, we can't come up with any justification - be it strange, twisted or empirically irrelevant - for this requirement of 2.5%.
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