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The Impact of Life-Course Developments on Pensions in the NDC Systems in Poland, Italy and Sweden and Point System in Germany

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Listed:
  • Ch?o?-Domi?czak, Agnieszka

    (Warsaw School of Economics)

  • Góra, Marek

    () (Warsaw School of Economics)

  • Kotowska, Irena E.

    (Warsaw School of Economics)

  • Magda, Iga

    () (Warsaw School of Economics)

  • Ruzik-Sierdzi?ska, Anna

    () (Warsaw School of Economics)

  • Strzelecki, Pawel

    () (Warsaw School of Economics)

Abstract

Old-age pensions in the NDC systems reflect the accumulated lifetime labour income. Interrupted careers and differences in the employment rates, particularly between men and women will have a significant impact on pension incomes in NDC countries. In the paper, we compare the labour market developments in four countries: Germany, Italy, Poland, and Sweden. There are pronounced differences in the labour market participation in the four countries: high levels of employment in Germany and Sweden are in contrast with low levels of employment in Italy and Poland. In the latter two countries, there is also a large gender gap in the labour market participation and employment pathways. Lower employment rates and gender pay gaps, as well as country-specific employment paths are important causes of differences in expected pension levels, but there are also differences due to the design of pension system and demographic developments. Prolonging working lives and reducing gender gaps in employment and pay, particularly for those at risk of interrupted careers, is key to ensure decent old-age pensions in the future. We argue that the pension systems' design modifications that weaken the link between contribution and benefits would not solve the challenge of providing adequate old-age pensions to people with interrupted careers. On the contrary, it would make the pension systems less sustainable, while the problem would be more challenging in the future.

Suggested Citation

  • Ch?o?-Domi?czak, Agnieszka & Góra, Marek & Kotowska, Irena E. & Magda, Iga & Ruzik-Sierdzi?ska, Anna & Strzelecki, Pawel, 2018. "The Impact of Life-Course Developments on Pensions in the NDC Systems in Poland, Italy and Sweden and Point System in Germany," IZA Discussion Papers 11341, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11341
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    References listed on IDEAS

    as
    1. Anna Matysiak & Dorota Węziak-Białowolska, 2016. "Country-Specific Conditions for Work and Family Reconciliation: An Attempt at Quantification," European Journal of Population, Springer;European Association for Population Studies, vol. 32(4), pages 475-510, October.
    2. Jan Baran & Atilla Bartha & Agnieszka Chlon-Dominczak & Olena Fedyuk & Agnieszka Kaminska & Piotr Lewandowski & Maciej Lis & Iga Magda & Monika Potoczna & Violetta Zentai, 2014. "Women on the European Labour Market," IBS Policy Papers 4/2014, Instytut Badan Strukturalnych.
    3. Agnese Vitali & Francesco C. Billari & Alexia Prskawetz & Maria Rita Testa, 2007. "Preference theory and low fertility: A comparative perspective," Working Papers 001, "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi.
    4. Catherine Hakim, 2003. "A New Approach to Explaining Fertility Patterns: Preference Theory," Population and Development Review, The Population Council, Inc., vol. 29(3), pages 349-374, September.
    5. Ronald Lee & Andrew Mason (ed.), 2011. "Population Aging and the Generational Economy," Books, Edward Elgar Publishing, number 13816.
    6. Andrew Mason & Ronald Lee, 2011. "Population aging and the generational economy: key findings," Chapters,in: Population Aging and the Generational Economy, chapter 1 Edward Elgar Publishing.
    7. Karolina Goraus & Joanna Tyrowicz, 2014. "Gender Wage Gap in Poland – Can It Be Explained by Differences in Observable Characteristics?," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 36.
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    More about this item

    Keywords

    NDC; old-age pensions; lifetime labour income; gender pay gap; interrupted carriers; sequence analysis; employment path;

    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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