The Pension System from Bismarck or Beveridge? A comparative analysis of the systems impacts on labor market, pension level, old-age poverty and pension distribution

The future arrangement and funding of pension systems is increasingly the subject of recent public discussion. This paper addresses this issue, deals specifically with the two competing pension system models, "Bismarck" and "Beveridge" and examines some of their economic and sociopolitical impacts. Thereto the implications of the two systems are explained theoretically and hypotheses about their effectiveness with regard to labor market, pension level, old-age poverty and pension distribution are generated. Finally, these are tested by means of macroeconomic data of selected European states. Altogether, indications can be found that the models "Bismarck" and "Beveridge" have different effects and impacts on the four factors analysed and that the hypotheses tend to be confirmed. After all, it is necessary to carry out a larger country study to verify the correlations and to test for significance.