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How to reduce the social insurance burden – four advices for policy makers
submited on 05.09.2008 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
submited on 05.09.2008 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
There are several possible ways to reduce the social insurance burden. Each one will produce the same effect – decreasing the difference between employer’s labor expenses and the employee’s net payment, while being a different mechanism.
1/ Direct reduction of the mandatory contributions’ rate. The rate is so high right now (more than 34% of the gross wage), that it allows for some slow steps without even meeting strong opposition.
2/ Introduction of the state as “third” insurer without increasing the total burden. The important in this scenario is the removal of some of the burden by the buyer and seller of labor.
3/ Avoiding the increasing of the maximal insurance income, which is BGN 2000 now and more positions are coming near it.
4/ Shifting larger part toward the employer. If the share changes to 90:10 (employer: employee) the burden will come down to 33.5% other things equal.
1/ Direct reduction of the mandatory contributions’ rate. The rate is so high right now (more than 34% of the gross wage), that it allows for some slow steps without even meeting strong opposition.
2/ Introduction of the state as “third” insurer without increasing the total burden. The important in this scenario is the removal of some of the burden by the buyer and seller of labor.
3/ Avoiding the increasing of the maximal insurance income, which is BGN 2000 now and more positions are coming near it.
4/ Shifting larger part toward the employer. If the share changes to 90:10 (employer: employee) the burden will come down to 33.5% other things equal.
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