Documents Voinea, Liviu 2 results

"This article reviews the implementation of the Pillar II pensions system in Romania. The approach is to be critical, as the title suggests, as a result of the deficit in the social insurance budget that has largely resulted from implementation of this policy, as well as from other aspects of the government's pro-cyclical policies on pensions including the cuts in wages to Romanian public sector workers. At the same time, Romania already spends a substantially smaller proportion of its GDP on pensions than the EU average, despite more than one-half of Romanian households receiving a pension of one description or another and nearly one-quarter of total consumption being accounted for by retirement pensions. The article reviews the draft law on the payment of Pillar II pensions, concluding that not only is the pensions legislation deficient, but that the new draft law does not improve what is already a complex and burdensome system, while a combination of job creation and wage increases are necessary to boost the economy. "

"This paper discusses the impact of a gradual, pre-announced significant increase of the minimum wage during 2013–16 in Romania. The main finding is that the positive effects prevail when the starting level of increase in the minimum wage is very low and the economy is in a negative output gap. Evidence shows that employment has increased, mainly at the minimum wage level, therefore making a shift toward a more balanced wage distribution. This measure might have contributed to a decrease of the shadow economy and a decrease in the share of people at risk of poverty. The impact on inflation was very limited, and the impact on the public budget was positive. Moreover, firms' profits were not affected, as the negative impact of the measure on unit labor costs and exports was limited."