Pension reform and income inequality among older people in 15 European countries

van Vliet O, Been J, Caminada K, Goudswaard K. Pension reform and income inequality among older people in 15 European countries The ageing of populations and hampering of economic growth have increased pressure on public finances in many advanced capitalist societies. Consequently, governments have adopted pension reforms in order to relieve pressure on public finances. These reforms have contributed to a relative shift from public to private pension schemes. As private social security plans are generally less redistributive than public social security, it can be hypothesised that the privatisation of pension plans has led to higher levels of income inequality among older people. This study contributes to the income inequality and pension literature by empirically analysing the distributional effects of shifts from public to private pension provision in 15 European countries for the period 19952007. We do not find evidence that shifts from public to private pension provision lead to higher levels of income inequality or poverty among older people. The results appear to be robust for a wide range of econometric specifications.