Article Retirement savings in Malta: Is there a role for workplace pensions? Philip Von Brockdorff, Roberta Montebello, Iain Clacher, Spiteri Jonathan Pages: 5 - 18 Read Abstract | View full article |
PDF Abstract: This paper seeks to understand the main factors that influence individual willingness to participate in a workplace pension scheme. The topic of workplace or occupational pensions has garnered significant interest in recent years, particularly in light of concerns related to the sustainability of public pensions within the EU due to rising population ageing. To this end, we conduct a series of computer-assisted telephone interviews (CATI) across a sample of workers in Malta who are members of a leading trade union. The questionnaire delves into a variety of issues, notably savings and investment behaviours, risk appetite as well as perceptions regarding workplace pensions. The results show that respondents’ willingness to save in a workplace pension scheme is strongly driven by individual trust levels in such schemes. In turn, logistic regression results indicate that trust in such schemes is positively associated with being male, high levels of income and higher levels of risk tolerance. We discuss these findings in terms of their implications for the widespread uptake of workplace pensions in Malta and their potential impact on retirement earnings and inequality. We also discuss the importance of trade unions in ensuring that such schemes appeal and are accessible to a diverse array of workers in the Maltese labour force, ensuring that their needs and concerns are addressed while also driving forward any legislative measures to protect investors.
Doi: 10.7423/XJENZA.2024.1.01
Article The sustainable development implications of major economic changes in Malta between 2012 and 2021 Lino Briguglio Pages: 19 - 30 Read Abstract | View full article |
PDF Abstract: The objectives of this paper are to discuss Malta’s economic performance between 2012 and 2021, and to compare such performance with the other 26 European Union (EU) member states and with the EU as a whole. The paper also considers social, environmental and political issues, again within an EU context, so as to place the economic dimension within a sustainable development context. The focus is however on economic aspects, with the other aspects being chosen mostly in view of the fact that they tend to drive, or to be driven, by economic realities. The data presented and discussed in the paper, if synthesised, would seem to indicate that between 2012 and 2021, Malta has done very well economically, less well in terms of social development and not well at all in terms of environmental and political governance. The paper argues that in matters relating to social and political governance, the situation appears to have, broadly speaking, improved since 2021. However, this is not the case in matters relating to the physical environment, and the situation would seem to have worsening in some aspects. For example, the frequent sale of government land to private entities, has resulted, and is likely to continue resulting, in further environmental degradation. The Environment and Resources Authority, which has the remit of safeguarding the environment, is practically toothless and the Planning Authority, with the mission of making the Maltese Islands a more pleasant and desirable place to live in, is doing exactly the opposite.
Doi: 10.7423/XJENZA.2024.1.02
Article Estimating the Economic Impact of the Office for Competition on the Maltese Economy Gilmour Camilleri, Cassar Ian P., Melchior Vella, Daniel Gravino Pages: 31 - 39 Read Abstract | View full article |
PDF Abstract: The Office for Competition in Malta is the leading administrative competition authority responsible for promoting sound competitive practices for attaining and maintaining well-functioning markets. This study quantifies the economic benefits on the Maltese economy via an economic impact assessment for the designated roles of the Office for Competition. Through an application of time-series econometrics, input-output modelling framework and the OECD’s guidelines to conduct such assessments, this study explores the direct and indirect multiplier effects that accrued on the Maltese economy as a result of the Office’s control of concentrations activities between 2014 and 2018. This study finds that the estimated financial benefit to the Maltese economy in terms of GDP averaged €10.2 million per year, €7.1 million in direct effects and €3.1 million in indirect benefits. This equates to a direct benefit-to-costs ratio of 30.4:1. This study should aid Maltese authorities in gauging the rate of return from the annual budget allocated to the Office for Competition and increase awareness of the benefits of competition law and policy.
Doi: 10.7423/XJENZA.2024.1.03
Article EDUCATIONAL ATTAINMENT AND GENDER GAPS IN THE MALTESE LABOUR FORCE Tiziana Gauci Pages: 40 - 50 Read Abstract | View full article |
PDF Abstract: The aim of this study is to analyse the main trends in educational attainment in Malta during the decade between 2010 and 2021 and to discuss factors that affect gender gaps in the Maltese labour. Data show that the educational attainment in Malta has improved substantially during the period under consideration, but pronounced gender gaps remain. The paper considers two major factors that would seem to effect gender gaps in labour force participation rates, namely parenthood obligations and choice of study areas at tertiary level by women. The paper derives a number of policy implications from these findings, including that women should be encouraged to follow STEM subjects and that work-life balance initiatives are crucial for decreasing the gender gap in the labour force.
Doi: 10.7423/XJENZA.2024.1.04
Article ESTIMATES OF THE EXCHANGE RATE PASS-THROUGH TO CONSUMER PRICES IN MALTA Glenn Abela, Rapa Noel Pages: 51 - 60 Read Abstract | View full article |
PDF Abstract: The Exchange Rate Pass-Through (ERPT), commonly defined as the extent to which exchange rate changes are reflected in the price levels of an economy, has important implications in a number of policy-relevant areas. Despite this, estimates of ERPT in the Maltese economy are scarce and do not take into account changes in the monetary regime pertaining to the adoption of the euro. We use local projections to estimate linear and non-linear ERPT to consumer prices in Malta after adoption of the euro. In line with literature, results point at incomplete ERPT to headline consumer prices, peaking at around 20% by the end of the first year after the exchange rate shock. ERPT to overall Harmonised Index of Consumer Price (HICP) inflation is largely driven by the goods component while ERPT to services prices is largely insignificant across the horizon considered. Allowing for non-linearities, we find evidence of asymmetric pass-through with larger changes to, as well as depreciations in, the nominal effective exchange rate being consistent with larger pass-through estimates.
Doi: 10.7423/XJENZA.2024.1.05
Article The Maltese Labour Market Through the Lens of the Beveridge Curve Melchior Vella Pages: 61 - 71 Read Abstract | View full article |
PDF Abstract: This study examines labour market developments in recent periods of rapid economic growth. The shifts in the Beveridge curve, which shows the relationship between unemployment and job vacancies, are analysed to isolate transient changes in the relationship between vacancies and unemployment and the efficiency of labour market matching. The inflow and outflow risk rates are estimated for the period 1998-2022. The results show, among other things, that the matching efficiency – how effectively job seekers are paired with suitable job opportunities – improved while the job separation rate – the frequency at which workers leave their jobs – decreased over the years. The study also looks at searching externalities to show that the congestion effects caused by firms are greater than those caused by workers. The paper shows that in recent years, the negative externality caused by firms themselves has not materialised into a higher natural unemployment rate, as it has also been demonstrated that matching efficiency has increased too.
Doi: 10.7423/XJENZA.2024.1.06
Article House purchase affordability for first-time buyers in Malta Brian Micallef Pages: 72 - 83 Read Abstract | View full article |
PDF Abstract: Malta is a nation of homeowners but there is increasingly widespread preoccupation that housing is no longer affordable. With a homeownership rate of around 80% that has remained stable for more than a decade, any metric of affordability should focus on the distribution of outcomes across households rather than relying on economy-wide averages. In this regard, first-time buyers tend to be among the most affected group. Housing affordability for first-time buyers has mainly two components – the ability to access sufficient credit from a bank (purchase affordability) and, subsequently, the ability to maintain mortgage repayments (repayment affordability). This paper develops an affordability index that is specifically targeted for first-time buyers for the period 2000–2022. The focus on purchase affordability recognizes that bank lending policies and conditions play an important role for first-time buyers. In this paper, property prices refer to a two-bedroom finished apartment in selected localities across Malta using realistic assumptions about bank lending policies. The paper shows that affordability differs significantly by locality. This heterogeneity by locality could explain the subjective perceptions about the deteriorating housing affordability in Malta as first-time buyers with low-to-medium levels of income are likely to face difficult trade-offs in this regard.
Doi: 10.7423/XJENZA.2024.1.07
Article Further evidence on core inflation in Malta - A dynamic factor model approach Ellul Dimech Reuben Pages: 84 - 89 Read Abstract | View full article |
PDF Abstract: A good core inflation measure is best placed to explain the true price pressures seen in an economy, rather than the overall index of consumer prices. This is especially so in periods of heightened inflation caused by short-lived or transitory shocks. This study defines a core inflation measure for Malta based on harmonised indices of consumer prices data from January 2006 to August 2022, using a dynamic factor model. The measure indicates that price inflation experienced in Malta post-March 2021 was not transitory in nature, and the current high rate of overall inflation is consistent with a period of persistent and generalised inflation. An understanding of the difference between core and headline inflation is particularly important for a small, open economy like Malta. The inflation rate presented in this paper is well-behaved, with a number of desirable properties: It is stable, unlike headline HICP inflation, and unbiased. The core inflation measure appears to be a good signal for policymakers and social institutions with an interest in price pressures and wage bargaining.
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