Exploring a blind spot in comparative pension reform research: Long‐term trends in non‐contributory pensions in Europe

Abstract

Over the past two decades, pension reforms have been high on the agenda of social policy makers in Europe. In many countries, these reforms have resulted in less generous public pensions. At the same time, minimum income protection for older adults has received attention from policy makers, but much less so from social policy researchers. Therefore, this study explored how benefit levels of non‐contributory minimum income schemes for older adults evolved from 1992 to 2012 in 13 ‘old’ EU member states. Building on two cross‐national longitudinal datasets with comparative data on minimum income protection in Europe, the study shows that over the past 20 years, the erosion of the principal safety net of last resort for older persons has been limited. Moreover, a substantial number of European countries have pursued a deliberate policy of considerably increasing minimum income benefits.

Recent pension reforms in Europe: More challenges, new directions. An overview

“…It is thus no coincidence that non‐contributory (“social”) pensions have been largely exempted from retrenchment efforts. Rather, in a number of European countries, these tax‐financed basic security instruments were even expanded (Goedeme & Marchal, 2016; European Commission, 2018, pp. 103–7) 10 .…”

Absence from Work after the Birth of the First Child and Mothers’ Retirement Incomes: A Comparative Analysis of 10 European Countries

“…2 Additionally, since the 1990s, Sweden, Denmark and the Netherlands have implemented a non-contributory universal (conditional) basic pension for income protection in old age, ensuring a generous basic allowance for all women. Indeed, in 2012, the gross values of these benefits equalled roughly half of the national average gross wage, the highest values among the countries considered here (Goedemé and Marchal, 2016).…”

“…If old age pensions guarantee almost the entire fictive reference salary, minimum income pensions ensure only 18% in Germany and around 27% in Italy and Spain. Similarly, the protection generated by non-contributory social pension schemes is limited, both in terms of the persons entitled, with less than 7% of the population over 65 covered, and in terms of income protection, with Italy and Germany being respectively the most and the least generous (in 2012, the gross values of the benefits equalled 40% and 23% of the national average gross wage, respectively), with Spain in between (32%) (Goedemé and Marchal, 2016). Greece can be included in this group, with the exception that women with fragmented working histories are supported more generously.…”

“…Greece can be included in this group, with the exception that women with fragmented working histories are supported more generously. This occurs both through minimum income pensions, with an average replacement rate of 45% in the period considered, and through social pensions, which in 2012 showed a gross benefit value equal to that of the Nordic countries (but only reaching 3% of the older population) (Goedemé and Marchal, 2016).…”

Inequalities and poverty risks in old age across Europe: The double‐edged income effect of pension systems

“…While the bivariate analysis of indicators (see Figure 3) helped us to account for some association between poverty and pension generosity (replacement rate), there are more subtle institutional features of pension systems that matter for the reduction of old age poverty. Public pensions differ in respect of their first‐tier minimum income protection (Goedemé, 2013; Goedemé & Marchal, 2016): Beveridgean basic pensions provide flat‐rate benefits to all residents (based on contribution years or residence period) with some means‐tested targeted benefits, whereas Bismarckian pensions often provide a minimum “social pension” (for those with enough contribution years) or rely on targeted welfare, be it income‐tested guaranteed benefits or means‐tested social assistance. For a minimum pension (or social pension, if existent), the number of required contributory years is relevant.…”