Retrenchment without effect? Exploring the link between pension reforms and public pension adequacy of new retirees in seven European countries (1993-2020)
Retrenchment without effect? Exploring the link between pension reforms and public pension adequacy of new retirees in seven European countries (1993-2020)
Since the 1980s population ageing and economic change has led to cost- containing pension reforms in many industrialised countries. Research has focused on the institutional side of such reforms, but the impact of cost containment policies for real retirees' pensions remains under- researched. This study addresses this gap. We use the change in For Peer Review
projected pensions replacement rates for average earners established by the OECD (2002-2019) as indicator of institutional retrenchment and compare this with the change in the 'relative pension level' of real pensioners covering the period 1993-2020 across seven European countries. With data from five waves of the Luxembourg Income Survey and linear regression models we examine whether the average pension income from public and mandatory systems, expressed in relation to average wages ('relative pension level'), of individuals in the earliest wave, least affected by institutional retrenchment, were significantly different from those of the later waves. The analysis was repeated for subgroups of men and women. We find that institutional change is no reliable predictor of relative pension level change. In the five countries where institutional retrenchment happened, real pension levels fell only in two, in the two countries where they increased no significant change in pension levels occurred. Women's relative pensions are less affected by institutional change than men's. Our results suggest other variables have mediated the relationship between institutions and pension outcomes, most probably employment change. We conclude that outcome-based analysis is an essential complement to institutional approaches. For policymakers the long-term impact of pension reform is hard to predict, but our results suggest that relative real pension income has been more robust than feared by many.
pension reform, population ageing, retrenchment, welfare state regimes, retirement income, Europe, gender, cohort analysis, Luxembourg Income Survey (LIS)
115-129
Bridgen, Paul
6a2060f6-cbab-47d4-a831-ff82350055c9
Meyer, Traute
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Davison, Lisa
a68c174c-29eb-4c51-a350-52eb118272b1
Bridgen, Paul
6a2060f6-cbab-47d4-a831-ff82350055c9
Meyer, Traute
ee469bf0-ab32-43ac-9f25-1261c24123fe
Davison, Lisa
a68c174c-29eb-4c51-a350-52eb118272b1
Bridgen, Paul, Meyer, Traute and Davison, Lisa
(2024)
Retrenchment without effect? Exploring the link between pension reforms and public pension adequacy of new retirees in seven European countries (1993-2020).
Journal of European Social Policy, 35 (2), .
(doi:10.1177/09589287241300024).
Abstract
Since the 1980s population ageing and economic change has led to cost- containing pension reforms in many industrialised countries. Research has focused on the institutional side of such reforms, but the impact of cost containment policies for real retirees' pensions remains under- researched. This study addresses this gap. We use the change in For Peer Review
projected pensions replacement rates for average earners established by the OECD (2002-2019) as indicator of institutional retrenchment and compare this with the change in the 'relative pension level' of real pensioners covering the period 1993-2020 across seven European countries. With data from five waves of the Luxembourg Income Survey and linear regression models we examine whether the average pension income from public and mandatory systems, expressed in relation to average wages ('relative pension level'), of individuals in the earliest wave, least affected by institutional retrenchment, were significantly different from those of the later waves. The analysis was repeated for subgroups of men and women. We find that institutional change is no reliable predictor of relative pension level change. In the five countries where institutional retrenchment happened, real pension levels fell only in two, in the two countries where they increased no significant change in pension levels occurred. Women's relative pensions are less affected by institutional change than men's. Our results suggest other variables have mediated the relationship between institutions and pension outcomes, most probably employment change. We conclude that outcome-based analysis is an essential complement to institutional approaches. For policymakers the long-term impact of pension reform is hard to predict, but our results suggest that relative real pension income has been more robust than feared by many.
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e-pub ahead of print date: 29 November 2024
Venue - Dates:
CPC-CPG webinar, Webinar, Hosted by University of St Andrews, United Kingdom, 2025-05-01 - 2025-05-20
Keywords:
pension reform, population ageing, retrenchment, welfare state regimes, retirement income, Europe, gender, cohort analysis, Luxembourg Income Survey (LIS)
Identifiers
Local EPrints ID: 501472
URI: http://eprints.soton.ac.uk/id/eprint/501472
ISSN: 0958-9287
PURE UUID: 5fe55305-6894-42ee-af2e-d533917aba8c
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Date deposited: 02 Jun 2025 16:50
Last modified: 22 Aug 2025 01:44
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Author:
Lisa Davison
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