Why the increase in the retirement age will lead to more inequality and poverty? An ignored fairness problem

Stauvermann, Peter Josef; Kumar, Ronald Ravinesh; Patel, Arvind

doi:10.2298/pan190531004s

Cited by 3 publications

(3 citation statements)

References 31 publications

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“…Lin and Lin (2016) inferred from the prediction results of the option value model that, irrespective of male workers, female workers or low-income labor groups, delayed retirement will have a certain degree of negative impact [31]. By using an overlapping generations model, Stauvermann and Hu (2018) analyzed the economic impacts resulting from an increase in life expectancy and an increased retirement age on the pension system. The results showed that the share of capital income had a crucial effect on pension revenue [32].…”

Section: Literature Reviewmentioning

confidence: 99%

“…By using an overlapping generations model, Stauvermann and Hu (2018) analyzed the economic impacts resulting from an increase in life expectancy and an increased retirement age on the pension system. The results showed that the share of capital income had a crucial effect on pension revenue [32]. Romm and Wolny (2012) found that delayed retirement policy will reduce individual and aggregate savings rates and will even lead to a decline in output [33].…”

Section: Literature Reviewmentioning

confidence: 99%

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Can the Policy of Increasing Retirement Age Raise Pension Revenue in China—A Case Study of Anhui Province

Jin

Stauvermann

Nepal³

et al. 2023

IJERPH

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With gradual progress in the medical field and the rising living standard of people, the life expectancy of people is gradually increasing. Unfortunately, this positive development contributes significantly to the aging of societies and creates huge challenges for pension systems. In order to mitigate the pressure on its pension system in the coming years, China is considering increasing the retirement age, just like many other countries. Based on the wage data of urban employees, pension revenue and expenditure data of employees in Anhui Province over the years, we constructed a model to predict average wages and forecast the revenue of the urban pension system from 2022 to 2032. We predicted the pension revenues by simulating an adjusted retirement age under two different schemes. The results of the study showed that the policies of appropriately increasing the retirement age can raise pension revenue. Compared with a one-step retirement age change scheme, a rolling retirement age change scheme that increases the retirement age by several months each year was found to be more suitable for the healthy development of the pension system.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Can the Policy of Increasing Retirement Age Raise Pension Revenue in China—A Case Study of Anhui Province

Jin

Stauvermann

Nepal³

et al. 2023

IJERPH

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“…However, recent research by Stauvermann et al (2023) [18] reveal that the Bismarckian system, in fact, exhibits a regressive impact. This occurs because in many developed countries, high-income individuals tend to have significantly higher life expectancies than low-income individuals.…”

Section: Introductionmentioning

confidence: 97%

Welfare effect analysis of pay-as-you-go pension system: Deconstruction from the perspective of relative utility and social equality

Hu,

Stauvermann

2024

PLoS ONE

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This paper studies the redistributive effects of two major pay-as-you-go pension systems by constructing an intergenerational iterative model which does not only considers standard utility but also relative utility. The study find that the two main pay-as-you-go pension systems are both sustainable. If we consider different preferences, then the choice of pension system should depend on the question of whether individuals are more interested in the absolute level of consumption or in the consumption related to a reference group. If the latter is more important, the Beveridgean system is superior, it provides greater protection for vulnerable groups than the Bismarck pension system, and the pension income after retirement is relatively more balanced, but the price is a lower level of consumption in the long run compared to an economy with Bismarckian system. If individuals prefer instead the absolute level of consumption, the Bismarckian system is better, because it guarantees a comparable higher level of consumption, but the disadvantaged groups face a higher risk of poverty and the degree of social inequality will be relatively higher. However, it is important to note that in the long run, only the level of consumption differs, not the speed of growth or number of children.

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Social expenditure composition and inequality: A dynamic panel threshold analysis for OECD countries

Bação,

Duarte,

Pereira

et al. 2024

European Journal of Political Economy

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Why the increase in the retirement age will lead to more inequality and poverty? An ignored fairness problem

Cited by 3 publications

References 31 publications

Can the Policy of Increasing Retirement Age Raise Pension Revenue in China—A Case Study of Anhui Province

Can the Policy of Increasing Retirement Age Raise Pension Revenue in China—A Case Study of Anhui Province

Welfare effect analysis of pay-as-you-go pension system: Deconstruction from the perspective of relative utility and social equality

Social expenditure composition and inequality: A dynamic panel threshold analysis for OECD countries

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