The Multidimensional Adequacy and Efficiency of European Pension Systems: the Ranking and Relationships

The paper discusses the issue of the adequacy and efficiency of European pension systems. The author perceives the adequacy and efficiency as multidimensional categories expressing the "goodness" of contemporary pension systems. Adequacy refers to the social aspect of pensions whereas efficiency reflects its economic conditions, however broadly understood, including not only financial sustainability, but also the impact pensions have on the labour market. The main goal of the study is to evaluate the multidimensional adequacy and efficiency of European pension systems and to find possible relationships between these two categories of a pension system. The method employed in the study is mainly based on the multidimensional statistical analysis and correlation analysis. The data used in the analysis comes from Eurostat and covers 30 countries in the years 2007 - 2011. The study allows to identify the change in the relationship between synthetic adequacy and synthetic efficiency in a given period from negative to positive one. The paper supports the view that in the long run efficiency is a necessary condition for income adequacy.