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Pension Inequalities and Redistribution within the French Public Pension System

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In this study, we quantify the amount of redistribution that is performed by the French public pension system, using Insees dynamic microsimulation model DESTINIE. We more precisely focus on two issues: to what extent does the pension system reduce variability within the distribution of pensions compared to the variability within the distribution of wages ? do redistribution mechanisms really benefit to lower income individuals ? Our results show that pension inequalities are much lower than wage inequalities, which strengthen the idea that the French pension system indeed performs a large amount of redistribution. The decrease in variability mainly concerns the lower part of the distributions of pensions and wages. Besides, women benefit from redistribution more than men: this stems both from their lower pensions on average (due to their lower wages and shorter career) and from the existence of some redistribution mechanisms that target mothers. Most redistribution tools have been implemented in the pension system during the 1970s. This has resulted in an increase of the systems capacity to reduce inequalities among pensioners, up to the cohorts that are going into retirement nowadays.

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File Function: Document de travail de la DESE numéro G2012-06
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Paper provided by Institut National de la Statistique et des Etudes Economiques, DESE in its series Documents de Travail de la DESE - Working Papers of the DESE with number g2012-06.

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Date of creation: 2012
Handle: RePEc:crs:wpdeee:g2012-06
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