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Similarity Assessment of the Pension Systems of the New European Union Member States

In: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Rovinj, Croatia, 12-14 September 2019

Author

Listed:
  • Krpan, Mira
  • Pavković, Ana
  • Žmuk, Berislav

Abstract

Recent macroeconomic and demographic trends have resulted in new challenges for pension systems. One of these challenges is to create a sustainable pension system while simultaneously providing adequate pension benefits for current and future pensioners. This research explores how similar are pension systems of eleven European Union countries by using hierarchical cluster analysis for year 2016. Variables representing pension systems, as well as demographic, macroeconomic and labour market data were used to cluster these economies. Three clustering solutions were generated using hierarchical clustering approach, one for each variable group. Given the number of observed countries, only two cluster solutions were considered. According to the characteristics of the pension systems, countries that have greater problems of unsustainability are recognized. A similar group of countries also forms the cluster characterized by unfavourable demographic trends that make it more difficult to maintain sustainability. Romania stands out from other economies, based on macroeconomic indicators, as it recorded faster economic growth, greater labour productivity growth and lower unemployment rate in 2016. The findings of this study provide a guideline for future pension reforms, since they indicate which countries’ experience could be valuable in defining certain policy measures.

Suggested Citation

  • 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.
    • Handle: RePEc:zbw:entr19:207663
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    References listed on IDEAS

    as
    1. Edyta Marcinkiewicz & Filip Chybalski, 2019. "A new proposal of pension regimes typology: empirical analysis of the OECD countries," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 22(1), pages 84-99, January.
    2. Mihai Daniel ROMAN & Georgiana Cristina TOMA (ROŞU) & Gabriela TUCHILUŞ, 2018. "Efficiency of Pension Systems in the EU Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 161-173, December.
    3. Edyta Marcinkiewicz, 2017. "Pension Systems Similarity Assessment: An Application of Kendall’s W to statistical multivariate analysis," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 11(3), September.
    4. Edyta Marcinkiewicz & Filip Chybalski, 2019. "A new proposal of pension regimes typology: empirical analysis of the OECD countries," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 22(1), pages 84-99, January.
    5. 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.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    hierarchical cluster analysis; the new European Union member states; pension system; sustainability; Ward’s method;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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