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Pension policy in EU25 and its possible impact on elderly poverty

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  • Zaidi, Asghar
  • Grech, Aaron George
  • Fuchs, Michael

Abstract

This paper reviews changes in pension policies in EU countries between 1995 and 2005 and describes how they might affect risk of poverty for future pensioner populations. The pension landscape in Europe has changed considerably in the past decade and the paper highlights commonalities as well as differences in pension reforms across these countries. A common trend is that the retirement incomes drawn from the public pension systems are on the decline, the changes are likely to shift more risks towards individuals, and there are fewer possibilities of redistribution in favour of the lower income individuals. The paper includes exploratory projections of how the risk of elderly poverty might evolve in the future. The countries where the benefit ratio is set to decline significantly, as expected, would see at-risk-poverty rates increase quite substantially, especially during the period 2025-2050, when the bulk of the decline is expected. This analysis points towards the importance of a more comprehensive assessment of the reforms, in particular in their impact on vulnerable groups (such as women and disabled people with disruptive work history) and in the clarity of the signals they give to individuals in extending their working career if they want to avoid greater risks of poverty during retirement.

Suggested Citation

  • Zaidi, Asghar & Grech, Aaron George & Fuchs, Michael, 2006. "Pension policy in EU25 and its possible impact on elderly poverty," LSE Research Online Documents on Economics 6225, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:6225
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    Cited by:

    1. EL-HOUJJAJI, Hind & ECHAOUI, Abdellah, 2020. "Assessing the financial sustainability of parametric pension system reforms: The case of Morocco," MPRA Paper 98912, University Library of Munich, Germany.
    2. Grech, Aaron George, 2010. "Assessing the sustainability of pension reforms in Europe," MPRA Paper 27407, University Library of Munich, Germany.
    3. Grech, Aaron George, 2012. "Evaluating the possible impact of pension reforms on future living standards in Europe," LSE Research Online Documents on Economics 51296, London School of Economics and Political Science, LSE Library.
    4. Grech, Aaron George, 2013. "How best to measure pension adequacy," MPRA Paper 46126, University Library of Munich, Germany.
    5. Salvador Barrios & Flavia Coda Moscarola & Francesco Figari & Luca Gandullia, 2020. "Size and distributional pattern of pension-related tax expenditures in European countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(5), pages 1287-1320, October.
    6. Jinkook Lee & Drystan Phillips, 2011. "Income and Poverty among Older Koreans Relative Contributions of and Relationship between Public and Family Transfers," Working Papers WR-852, RAND Corporation.
    7. Inhoe Ku & Wonjin Lee & Seoyun Lee, 2021. "Declining Family Support, Changing Income Sources, and Older People Poverty: Lessons from South Korea," Population and Development Review, The Population Council, Inc., vol. 47(4), pages 965-996, December.
    8. Rod Hick, 2009. "The SocialWelfare Pensions in Ireland: Pensioner Poverty and Gender," Working Papers 200902, Geary Institute, University College Dublin.
    9. 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.
    10. Vandeninden, Frieda, 2012. "A Simulation of Social Pensions in Europe," MERIT Working Papers 2012-008, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    11. Poteraj, Jarosław, 2007. "Systemy emerytalne w Europie - Cypr [Pension systems in Europe - Cyprus]," MPRA Paper 33159, University Library of Munich, Germany.
    12. repec:cep:sticas:/161 is not listed on IDEAS
    13. Marga Peeters, 2012. "Better Safe than Sorry - Individual Risk-free Pension Schemes in the European Union," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 6(3), September.
    14. repec:cep:sticas:/172 is not listed on IDEAS
    15. Arie Kapteyn & Jinkook Lee & Gema Zamarro, 2013. "Does Retirement Induced through Social Security Pension Eligibility Influence Subjective Well-being? A Cross-Country Comparison," Working Papers wp301, University of Michigan, Michigan Retirement Research Center.
    16. Dekkers, Gijs, 2008. "Are the old poor? A discussion and some cursory evidence," MPRA Paper 29436, University Library of Munich, Germany.
    17. Grech, Aaron George, 2006. "Elderly poverty in EU25," MPRA Paper 33618, University Library of Munich, Germany.
    18. Figari, Francesco & Matsaganis, Manos & Sutherland, Holly, 2011. "The financial well-being of older people in Europe and the redistributive effects of minimum pension schemes," EUROMOD Working Papers EM7/11, EUROMOD at the Institute for Social and Economic Research.
    19. Grech, Aaron George, 2007. "Pension policy in EU25 and its impact on pension benefits," MPRA Paper 33669, University Library of Munich, Germany.
    20. Poteraj, Jarosław, 2008. "Pension systems in 27 EU countries," MPRA Paper 31053, University Library of Munich, Germany.
    21. Aaron George, Grech, 2014. "Pension policy design: The core issues," MPRA Paper 53662, University Library of Munich, Germany.

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    More about this item

    Keywords

    Social Security and Public Pensions; Retirement; Retirement Policies; Private Pensions;
    All these keywords.

    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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