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Pension reform and income inequality among the elderly in 15 European countries

Author

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  • Van Vliet, Olaf
  • Been, Jim
  • Caminada, Koen
  • Goudswaard, Kees

Abstract

The ageing of populations and hampering economic growth increase pressure on public fi-nances in many advanced capitalist societies. Consequently, governments have adopted pen-sion reforms in order to relieve pressure on public finances. These reforms have contributed to a relative shift from public to private pension schemes. Since private social security plans are generally less redistributive than public social security, it can be hypothesized that the privatization of pension plans has led to higher levels of income inequality among the elderly. Existing empirical literature has mainly focused on cross-country comparisons at one moment in time or on time-series for a single country. This study contributes to the income inequality and pension literature by empirically analysing the distributional effects of shifts from public to private pension provision in 15 European countries for the period 1995-2007, using pooled time series cross-section regression analyses. Remarkably, we do not find empirical evidence that shifts from public to private pension provision lead to higher levels of income inequality or poverty among elderly people. The results appear to be robust for a wide range of econometric specifications.

Suggested Citation

  • Van Vliet, Olaf & Been, Jim & Caminada, Koen & Goudswaard, Kees, 2011. "Pension reform and income inequality among the elderly in 15 European countries," MPRA Paper 32940, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:32940
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    References listed on IDEAS

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    10. Kevin Milligan, 2008. "The Evolution of Elderly Poverty in Canada," Canadian Public Policy, University of Toronto Press, vol. 34(s1), pages 79-94, November.
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    12. Arza, Camila, 2006. "Distributional Impacts of Pension Policy in Argentina," The Journal of Economic History, Cambridge University Press, vol. 66(02), pages 467-472, June.
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    14. Anupam Nanda & Stephen Ross, 2012. "The Impact of Property Condition Disclosure Laws on Housing Prices: Evidence from an Event Study Using Propensity Scores," The Journal of Real Estate Finance and Economics, Springer, vol. 45(1), pages 88-109, June.
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    Citations

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    Cited by:

    1. Chen Wang & Kees Goudswaard & Koen Caminada, 2012. "Disentangling Income Inequality and the Redistributive Effect of Taxes and Transfers in 20 LIS Countries Over Time Evidence from the LIS Data," LIS Working papers 581, LIS Cross-National Data Center in Luxembourg.
    2. Philippe Jacques & Marie-Louise Leroux & Dalibor Stevanovic, 2021. "Poverty among the elderly: the role of public pension systems," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(1), pages 24-67, February.
    3. Kees Goudswaard & Olaf van Vliet & Jim Been & Koen Caminada, 2012. "Pensions and Income Inequality in Old Age," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(04), pages 21-26, December.
    4. Maria Letizia Zanier & Isabella Crespi, 2015. "Facing the Gender Gap in Aging: Italian Women’s Pension in the European Context," Social Sciences, MDPI, vol. 4(4), pages 1-22, November.
    5. Peeters, Marga, 2011. "“Better Safe than Sorry” - Individual Risk-free Pension Schemes in the European Union - Macroeconomic Benefits, the Mobile Working Citizen’s Perspective and Why Nots," MPRA Paper 33571, University Library of Munich, Germany.
    6. Elena Jarocinska & Anna Ruzik-Sierdzinska, 2016. "The impact of pension system reform on projected old-age income: the case of Poland," CASE Network Studies and Analyses 0482, CASE-Center for Social and Economic Research.
    7. Baas, Timo & Belke, Ansgar, 2017. "Oil price shocks, monetary policy and current account imbalances within a currency union," CEPS Papers 13334, Centre for European Policy Studies.
    8. Stefan Fors & Mats Thorslund, 2015. "Enduring inequality: educational disparities in health among the oldest old in Sweden 1992–2011," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 60(1), pages 91-98, January.
    9. repec:ces:ifodic:v:10:y:2012:i:4:p:19074538 is not listed on IDEAS
    10. Kees Goudswaard & Olaf van Vliet & Jim Been & Koen Caminada, 2012. "Pensions and Income Inequality in Old Age," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(4), pages 21-26, December.
    11. Caminada, Koen & Goudswaard, Kees & Wang, Chen, 2012. "Disentangling income inequality and the redistributive effect of taxes and transfers in 20 LIS countries over time," MPRA Paper 42350, University Library of Munich, Germany.
    12. Miroslav Verbič & Rok Spruk, 2019. "Political economy of pension reforms: an empirical investigation," European Journal of Law and Economics, Springer, vol. 47(2), pages 171-232, April.
    13. -, 2018. "Promoting equality: An interregional perspective," Documentos de Proyectos 43677, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    14. Lindquist, Gabriella Sjögren & Wadensjö, Eskil, 2012. "Income Distribution among those of 65 Years and Older in Sweden," IZA Discussion Papers 6745, Institute of Labor Economics (IZA).
    15. Filgueira, Fernando & Manzi, Pilar, 2017. "Pension and income transfers for old age: Inter- and intra-generational distribution in comparative perspective," Políticas Sociales 42087, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    16. J rg Neugschwender, 2014. "Pension Income Inequality: a Cohort Study in Six European Countries," LIS Working papers 618, LIS Cross-National Data Center in Luxembourg.
    17. Vanesa Jorda & Jose M. Alonso, 2020. "What works to mitigate and reduce relative (and absolute) inequality?: A systematic review," WIDER Working Paper Series wp-2020-152, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    income inequality; pension reform; public/private-mix; retirement; welfare state;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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