The Measurement of Social Security Convergence: The Case of European Public Pension Systems since 1950

Abstract

This article proposes a novel way of measuring cross-national changes over time in the outputs of social security systems. Traditional approaches to the comparative analysis of social security systems use expenditure levels, regime types or poverty and inequality rates to rank countries and map change over time. All these approaches encounter the problem of determining how much of the observed change is due to internal developments within the social security system, and how much due to exogenous social and economic factors. Taking the example of public pensions in five European countries since 1950, this article demonstrates how formal social security rules can be used in a simulation model to evaluate changes in public pension payments for a variety of hypothetical individuals characterised by different levels of lifetime income. This procedure produces direct measures of the impact of changes in social security systems which are entirely independent of exogenous developments in social and economic structures. This new method reveals the ‘pure’ effect of internal social security system development over time.

The EU integration process and the convergence of social protection benefits at national level

“…However, few research studies aimed at recognising convergence phenomena in social expenditure have taken this into account. Johnson (1999) and Montanari (2001) are two interesting exceptions, although the methods they use are very different to those used in this article. Our investigation seeks evidence of convergence by isolating the effects of the need for social protection, which are different in each country.…”

“…In some cases (Chapon & Euzéby, 2002; Daly, 1997) they have monitored changes in the regulations that form the basis of national social protection systems. Other authors have worked with social expenditure variables, some using classical indicators in the analysis of social security benefits, such as coverage and replacement rates (Cornellisse & Goudswaard, 2002; Johnson, 1999), and others referring exclusively to aggregate social expenditure levels. Of the latter, some merely offer static comparisons (Barrada, 1997; Boscá, Fernández & Taguas, 1997; Fernández, 1993; Greeve, 1996), while others offer a dynamic perspective (Alber & Standing, 2000; Alonso, Galindo & Sosvilla‐Rivero, 1997; Castles, 2001; Herce, Sosvilla‐Rivero & de Lucio, 1998).…”

Welfare state: Convergence: Downward versus upward

“…Тако, поједини истраживачи [Daly 1997] у први план истичу промене регулативе ЕУ које доводе до прилагођавања у националним системима социјалне заштите. Други аутори свој рад темеље на социјалним издацима, користећи класичне показатеље у анализи система социјалне за штите, као што су стопа покривености и стопа замене [Cornellisse & Goudswaard 2002;Johnson 1999]. На крају, поједини аутори нуде чисто статичке компарације [Greeve 1996] док други примењују динамичке анализе [Alber & Standing 2000].…”

Measuring is Believing! Improving Conventional Indicators of Welfare State Development

“…These rates measure the extent to which cash benefits restore the purchasing power of individuals and households that have suffered contingencies such as sickness, unemployment or retirement. Replacement rates and other indices based on the same measures have been used to describe the diverse natures of welfare states (EspingAndersen 1990), to acknowledge the factors that explain the development of welfare states (Korpi 1989), to describe the extent of the retrenchment of social policies during the period of crisis (Scruggs 2006;Allan and Scruggs 2004;Korpi and Palme 2003) and to assess the hypothesis of convergence of social protection systems (Montanari 2001;Johnson 1999). Replacement rates are a highly precise measurement in this context, because they report on the extent to which an individual and his/her family can maintain their purchasing power when they are unable for any given reason (e.g.…”