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Poverty among the elderly: the role of public pension systems

Author

Listed:
  • Philippe Jacques

    (StatLog Inc.)

  • Marie-Louise Leroux

    (ESG-UQAM
    CORE
    CESifo
    CIRANO)

  • Dalibor Stevanovic

    (ESG-UQAM
    CIRANO)

Abstract

The objective of this paper is to measure the impact of first-pillar public pensions spending on the prevalence of poverty among the elderly. Using data from 27 European countries from 1995 to 2014, we estimate the elasticity of the poverty rate among individuals aged over 65 years to per capita public pensions spending. We show the existence of a nonlinear relationship between these two variables. The elasticity is negative and statistically different from 0 only beyond a level of spending of 685€ per capita. At the average value of 2819€, it is estimated that the elasticity is around − 1.45. This nonlinear relationship is robust to the treatment of possible endogeneity and to different robustness checks like the variation of the poverty line as well as to the inclusion of country-specific differences in public pension plans.

Suggested Citation

  • 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.
    • Handle: RePEc:kap:itaxpf:v:28:y:2021:i:1:d:10.1007_s10797-020-09617-2
    DOI: 10.1007/s10797-020-09617-2
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    Cited by:

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    2. Koen Caminada & Kees Goudswaard & Qingqi Liu & Chen Wang & Jinxian Wang, 2024. "Determinants of Elderly Poverty in 21 European Countries, 1995-2022," LIS Working papers 882, LIS Cross-National Data Center in Luxembourg.
    3. Abdul Hadi & Yogi Vidyattama & Badriah Badriah & Prihoda Emese, 2024. "Adequacy of the Pension System: A Qualitative Interview of Indonesian Civil Service Pensioners in Kapuas Regency," Economies, MDPI, vol. 12(12), pages 1-19, November.
    4. Yoko Niimi & Charles Yuji Horioka, 2023. "Elderly poverty and its measurement," Chapters, in: Jacques Silber (ed.), Research Handbook on Measuring Poverty and Deprivation, chapter 29, pages 307-315, Edward Elgar Publishing.

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    More about this item

    Keywords

    Ageing; Poverty; Income inequalities; Public pension systems; Panel data;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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