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The Multidimensional Efficiency of Pension System: Definition and Measurement in Cross-Country Studies

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  • Filip Chybalski

    (Lodz University of Technology)

Abstract

The existing literature on the efficiency of pension system, usually addresses the problem between the choice of different theoretical models, or concerns one or few empirical pension systems. In this paper quite different approach to the measurement of pension system efficiency is proposed. It is dedicated mainly to the cross-country studies of empirical pension systems, however it may be also employed to the analysis of a given pension system on the basis of time series. I identify four dimensions of pension system efficiency, referring to: GDP-distribution, adequacy of pension, influence on the labour market and administrative costs. Consequently, I propose four sets of static and one set of dynamic efficiency indicators. In the empirical part of the paper, I use Spearman’s rank correlation coefficient and cluster analysis to verify the proposed method on statistical data covering 28 European countries in years 2007–2011. I prove that the method works and enables some comparisons as well as clustering of analyzed pension systems. The study delivers also some interesting empirical findings. The main goal of pension systems seems to become poverty alleviation, since the efficiency of ensuring protection against poverty, as well as the efficiency of reducing poverty, is very resistant to the efficiency of GDP-distribution. The opposite situation characterizes the efficiency of consumption smoothing—this is generally sensitive to the efficiency of GDP-distribution, and its dynamics are sensitive to the dynamics of GDP-distribution efficiency. The results of the study indicate the Norwegian and the Icelandic pension systems to be the most efficient in the analyzed group.

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  • Filip Chybalski, 2016. "The Multidimensional Efficiency of Pension System: Definition and Measurement in Cross-Country Studies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 15-34, August.
  • Handle: RePEc:spr:soinre:v:128:y:2016:i:1:d:10.1007_s11205-015-1017-3
    DOI: 10.1007/s11205-015-1017-3
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    Cited by:

    1. Krpan, Mira & Pavković, Ana & Žmuk, Berislav, 2019. "Similarity Assessment of the Pension Systems of the New European Union Member States," Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference (2019), Rovinj, Croatia, in: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Rovinj, Croatia, 12-14 September 2019, pages 50-57, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb.
    2. JIMON Stefania Amalia & BALTES Nicolae & MUNTEAN Neli, 2019. "Social Protection Of Older People And The Structure Of Consumption Expenditure In Countries Of Central And Eastern Europe," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 71(2), pages 103-117, September.
    3. Mira Krpan & Ana Pavkovic & Berislav Zmuk, 2020. "Cluster analysis of new EU member states' pension systems," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 18(2B), pages 208-222.
    4. Nicolae Balteș & Ștefania Amalia Jimon, 2019. "The Effectiveness of Pension Systems in Some Countries of Central and Eastern Europe," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 555-561, August.
    5. Alicja Jajko-Siwek, "undated". "Adequate Retirement Paths In The Polish Pension System," Review of Socio - Economic Perspectives 202058, Reviewsep.

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