Pension reform and income inequality among older people in 15 European countries

Abstract

van Vliet O, Been J, Caminada K, Goudswaard K. Pension reform and income inequality among older people in 15 European countries The ageing of populations and hampering of economic growth have increased pressure on public finances in many advanced capitalist societies. Consequently, governments have adopted pension reforms in order to relieve pressure on public finances. These reforms have contributed to a relative shift from public to private pension schemes. As private social security plans are generally less redistributive than public social security, it can be hypothesised that the privatisation of pension plans has led to higher levels of income inequality among older people. This study contributes to the income inequality and pension literature by empirically analysing the distributional effects of shifts from public to private pension provision in 15 European countries for the period 1995–2007. We do not find evidence that shifts from public to private pension provision lead to higher levels of income inequality or poverty among older people. The results appear to be robust for a wide range of econometric specifications.

Facing the Gender Gap in Aging: Italian Women’s Pension in the European Context

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“…These reforms have contributed to a relative shift from public to private pension schemes. Since private social security plans are generally less redistributive than public social security, it can be hypothesized that the privatization of pension plans has led to higher levels of income inequality among the elderly [5].…”

How European pension promises changed in austere times: 2002–15

“…However, as stated, research has focused on the politics and policy of pensions. Where recent analyses have explored retirement income more extensively their focus has been on individuals who are already retired or about to do so, in Canada, Europe and the USA (for example van Vliet, Been et al 2012;Fasang, Aisenbrey et al 2013;Vara 2013;Nivakoski 2014;Wainwright and Kibler 2014;Cahill, Giandrea et al 2015;Möhring 2015). The problem for those interested in the impact of current policy change is that the income of today's pensioners is the result of past reform paths and employment histories (for this point also Hinrichs and Jesuola 2012, p. 17).…”

The Impact of Pension System Reform on Projected Old-Age Income: The Case of Poland

“…A shift to DC formula results in a smaller inequality in terms of replacement rates given that DC formula is more linked to individual contributions, but in a larger inequality in absolute pension amounts because of a wider distribution of wages as compared to pension benefits. Several studies have analysed the impact of pension systems on the income distribution of the elderly (see for example, Knoef et al 2012;van Vliet et al 2012;Vork et al 2015), and in particular studied groups of retirees within age cohorts (see e.g. Ervik andLinden 2013 andOECD 2013).…”