The peculiar patterns of age-specific at-risk-of-poverty rates: An analysis of poverty trends in 30 European countries

The EU’s at-risk-of-poverty threshold is set at 60% of national median disposable equivalent income. Changes in median income therefore shift the at-risk-of-poverty threshold, which is likely to affect at-risk-of-poverty rates for some population subgroups more than for others. However, there is only scarce research on how the choice of poverty threshold affects the overall picture of poverty trends. This study aims to find out whether there are typical patterns related to changes in age-specific at-risk-of-poverty rates. This is done by analysing how the size and direction of changes in at-risk-of-poverty rates vary between age groups. Furthermore, the aim is to establish how changes in age-specific at-risk-of-poverty rates are associated with changes in poverty thresholds, income and employment. The study uses EU-SILC microdata and focuses on the development of poverty rates in 30 European countries in the mid-2010s. The results show that, on average, older age groups have experienced larger changes in at-risk-of-poverty rates than children or the working-age population. The increases or decreases in old-age at-risk-of-poverty rates are typically in an opposite direction to those seen in working-age poverty. Furthermore, different poverty thresholds can give a different picture of poverty trends, especially for the older population. Lastly, increases in the employment rate and income tend to be associated with decreases in child and working-age poverty, but even an opposite pattern can be found for old-age poverty. Overall, the findings imply that especially for short periods of time, caution is warranted when drawing conclusions about changes in old-age at-risk-of-poverty rates.

Introduction to the Special Issue on Sustainable Pensions: Do Sustainable Pensions Require Sustainable Investments?

This Special Issue addresses the concept of sustainability in pension systems from a wide range of perspectives. It examines the central questions raised about sustainable, socially responsible investments and other associated concepts by opening up a comprehensive discussion with an interdisciplinary approach. Normative trends and international cases are analysed in some detail concerning the situation of specific European Member States. Also, the concept of sustainability in European occupational pension schemes is questioned as an efficient vehicle able to assure adequate pension entitlements to all workers to avoid old-age poverty.

Public Pension Generosity and Old-Age Poverty in OECD countries

Pension adequacy is gaining importance as old-age poverty remains a pressing problem. In many advanced welfare states, the population is ageing rapidly and recent pension reforms have led to cuts in public pension provision. There are, however, few comparative longitudinal studies on the relationship between pension generosity and old-age poverty. This study provides a comparative empirical assessment of how the prevalence and depth of old-age poverty relates to generosity of public pension benefits in 14 advanced OECD welfare states from 1980-2010. We focus on the role of mandatory public pension provision of mainly first tier schemes that grant the major share of retirees’ income in most countries. We use data on theoretical pension replacement rates for retirees who had different working-age incomes. In order to address endogeneity issues, we adopt an instrumental-variable approach. Our main finding shows that pensions systems and earnings-related schemes, in particular, are quite efficient in reducing the risk of old-age poverty. Yet they still do very little to alleviate poverty among those pensioners in the most disadvantaged situations. We also found that redistribution within the pension system does not substantially contribute to poverty alleviation.

Myopic Savings Behaviour of Future Polish Pensioners

Low saving rates combined with low effective retirement age herald old-age poverty. This paper examines the preferred strategies of future Polish pensioners in order to sustain the standard of living in the future. A two-step approach is used: as a first-best strategy, we explore determinants of supplementary saving with binary logistic models; as a second-best strategy, we examine alternative options with principal component analysis. Future retirees rarely accumulate long-term savings, do not use dedicated instruments, and they start to save additionally far too late. Savings are concentrated in wealthier and better educated groups. Such myopia is governed by their political stance and not by awareness of dire prospects. Second-best strategies are based on optimistic assumptions about future health (seeking for additional jobs), on the assumed generosity of acquaintances or social institutions (relying on external assistance), or on rebelling. Given the increasing political power of elder generations, balancing the interests of workers and retirees will be an increasingly difficult task for policy makers.

Poverty Response to the Household Type of Elderly and Old-Age Pension

This paper investigates the effect of household type and old-age pension on poverty in Ghana. Primary data was collected from households with the elderly across six Districts in the country. A binary logistic regression estimation was used for the analyses. The result shows that whereas there was 14.4 times probability of being poor by living in an elderly only household, there is a 2.2 times probability of being poor in a household of the elderly and working-age person. The findings also show that the probability of a pension recipient being poor was 0.143 times less likely as compared to those that were not. Thus, there was a significant negative relationship between receipt of old-age pension and poverty. The study recommends that public policy on old age poverty alleviation must include pension provisions while those that use basic salary should consider using gross salary for pension calculation.

Social Exclusion and Older Persons: A Case of Millennium of Isolation

Old age social exclusion is a crucial issue all over the world. The ways in which social exclusion may affect older people have largely been neglected. This article seeks to generate a better understanding of the dimensions of social exclusion relevant to older people highlighting the causes and effects of social exclusion of old age. Poverty and health issues are important elements of the social exclusion. This data is based on in-depth interviews from the old age people of union council Jalalabad in Multan. 38 respondents were selected from the union council Jalalabad through purposive sampling. Based on in-depth interviews of the respondents containing questions related to the causes and effects of social exclusion it is recommended that government and private institutions should promote the awareness in people to alleviate the social exclusion issue from the society.