How important are state transfers for reducing poverty rates in later life?

Abstract

Financial welfare in later life is of prime concern as the funding of pensions and care rises up policy agendas. In this context, work and family histories are well known to impact on late-life income, generally reducing state and private pensions for women. In a political context where benefits are under threat as part of the retrenchment of the welfare state, we consider two key questions. First, how do state pension and benefit transfers interact with work and family histories to reduce poverty risks in later life? Second, who is kept out of poverty by state benefits and transfers? Using data from the English Longitudinal Study of Ageing, we examine how work, family and health histories are associated with poverty in later life and estimate how far and in what ways state pensions, income support and disability benefits play a mediating role. We conclude that state support is key to maintaining incomes above official poverty lines for substantial numbers whose work, family and health histories would otherwise have led to their incomes falling below these lines. While disability benefits are designed to compensate for the additional costs of disability, it is likely that many in receipt experience poverty (even though they are not captured in official poverty statistics); even more so for those incurring the costs of disability but not in receipt of these benefits.

Grandparenting, education and subjective well-being of older Europeans

“…Winefield and Air (2010) suggested that grandmothers belonging to older generations were more satisfied in their grandparental role than grandfathers because they viewed it as an extension of their maternal role. Marital and work lifecourse characteristics might differ by gender and also contribute to the gender gap in the association between grandparenthood and SWB (Price et al 2015).…”

Pensions and social inclusion in an ageing China

“…The ELSA indicated that only one-quarter of women and one-third of men aged 65 and over successfully escape from poverty without public pensions, which plays a mediating role offsetting the disadvantages of employment and family history in the lifecourse (Price et al . 2016). In developing countries, the impact of pensions on poverty reduction is almost entirely due to social pensions, also called tax-financed pensions, which are non-contributory pensions financed by the public purse.…”

Ethnic inequality in retirement income: a comparative analysis of immigrant–native gaps in Western Europe

“…Relatedly, Möhring (2015) maintains that basic and targeted pension schemes, which guarantee a basic pension to everyone who meets minimal requirements, mitigate disadvantages from discontinuous employment careers. Price et al (2016) show that non-means-tested disability benefits can be crucial in keeping otherwise poor social groups above the poverty line. Existing research has also stressed the role of private pensions for RIGs (Ginn and Arber 2001).…”