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Financial Resources and Retirement in Nine OECD Countries: The Role of The Tax System


  • Gordon Keenay
  • Edward R. Whitehouse


Most countries give income-tax concessions to older people relative to people of working age. Some treat pension income more favourably than earnings, and most do not levy social security contributions on older people. These policies mean that the direct tax burden of older people is lower than that carried by people of working age. At an income equivalent to economy-wide average earnings, for example, the average tax burden (in the nine countries studied) is ten percentage points lower for pensioners than it is for workers. Therefore differences in taxes between pensioners and workers are an important way in which governments support people during their retirement. This is measured by the effect on net replacement rates: the value of pension benefits for a full-career worker relative to earnings when in work. On average, one fifth of the net replacement rate for a worker on average earnings is due to tax differentials rather than the pension system.This paper provides the first ... La plupart des pays font des concessions d’impôt sur le revenu pour les personnes âgées par rapport aux personnes en activité. Certains pays sont plus favorables aux revenus des pensions de retraite qu’aux gains d’activité. La plupart ne prélèvent pas de contributions de sécurité sociale aux personnes âgées. Ces politiques signifient que le poids de l’impôt direct sur les personnes âgées est plus bas que celui porté par les actifs. A échelle de l’économie d’un pays, et pour un revenu équivalent aux gains d’activité moyens par exemple, le poids moyen de l’imposition (pour les neuf pays étudiés) est de 10% de moins pour les retraités par rapport aux actifs. Ainsi les différences d’imposition entres retraités et actifs sont révélatrices du soutien important des gouvernements aux personnes retraitées. Ceci est mesuré par les effets sur les taux de substitution nets : la valeur des revenus de pension pour un actif ayant cotisé toute sa carrière par rapport à ses revenus d’activité. En ...

Suggested Citation

  • Gordon Keenay & Edward R. Whitehouse, 2003. "Financial Resources and Retirement in Nine OECD Countries: The Role of The Tax System," OECD Social, Employment and Migration Working Papers 8, OECD Publishing.
  • Handle: RePEc:oec:elsaab:8-en

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    Cited by:

    1. Verbist, Gerlinde, 2005. "Replacement incomes and taxes: a distributional analysis for the EU-15 countries," EUROMOD Working Papers EM2/05, EUROMOD at the Institute for Social and Economic Research.
    2. Panos Tsakloglou & Daniela Mantovani & Fotis Papadopoulos & Holly Sutherland, "undated". "Pension Incomes in the European Union: Policy Reform Strategies in Comparative Perspective," EcoMod2006 272100095, EcoMod.
    3. Queisser, Monika & Whitehouse, Edward, 2005. "Pensions at a glance: public policies across OECD countries," MPRA Paper 10907, University Library of Munich, Germany.
    4. palacios, Robert & Whitehouse, Edward, 2006. "Civil-service pension schemes around the world," Social Protection and Labor Policy and Technical Notes 90340, The World Bank.
    5. Callan, Tim & Nolan, Brian & Walsh, John R. & Whelan, Christopher T. & Maitre, Bertrand, 2008. "Tackling Low Income and Deprivation: Developing Effective Policies," Research Series, Economic and Social Research Institute (ESRI), number RS1.
    6. Edward Whitehouse, 2007. "Pensions Panorama : Retirement-Income Systems in 53 Countries," World Bank Publications, The World Bank, number 7177, January.
    7. Whitehouse, Edward, 2001. "Pension systems in 15 countries compared: the value of entitlements," MPRA Paper 14751, University Library of Munich, Germany.
    8. Carole Bonnet & Olivier Bontout & Anne-Juliette Lecourt, 2014. "Une décomposition des différences de niveaux de vie des actifs et des retraités en Europe," Économie et Statistique, Programme National Persée, vol. 469(1), pages 121-146.

    More about this item

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies


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