The Cyclical Characteristics of Universal Social Insurance

Richard Hemming

No 4538, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper examines how a universal social insurance program proposed for Mexico can respond to cyclical variations in revenue while remaining selffinancing. More specifically, it discusses the issues involved in setting up a stabilization fund that can accumulate surpluses when revenue is cyclically high, which can be drawn down when revenue is cyclically low. Attention is also paid to the options available to create a fund with sufficient resources to respond to revenue shocks early it its life, before a significant revenue cushion can be built up. In this connection, it is argued that letting the fund borrow to do this would not compromise the financial independence of the program.

Keywords: Social; insurance (search for similar items in EconPapers)
JEL-codes: E39 H53 H55 I38 (search for similar items in EconPapers)
Date: 2013-04
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:4538

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