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Pension Insecurity and Wellbeing in Europe

Published online by Cambridge University Press:  17 November 2016

JAVIER OLIVERA  and
VALENTINA PONOMARENKO Open the ORCID record for VALENTINA PONOMARENKO [Opens in a new window]
JAVIER OLIVERA
Affiliation:
Luxembourg Institute of Socio-Economic Research (LISER), Maison de Sciences Humaines 11, Porte de Sciences, L-4366 Esch-sur-Alzette/Belval, Luxembourg email: [email protected]
VALENTINA PONOMARENKO
Affiliation:
University of Luxembourg, Institute for Research on Socio-Economic Inequality, 11, Porte des Sciences, L-4366 Esch-sur-Alzette/Belval, Luxembourg. email: [email protected]
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Abstract

This paper studies pension insecurity in a sample of non-retired individuals aged 50 years or older from 18 European countries. We capture pension insecurity with the subjective expectations on the probability that the government will reduce the pensions of the individual before retirement or will increase the statutory retirement age. We argue that changes in economic conditions and policy affect the formation of such probabilities, and through this, subjective wellbeing. In particular, we study the effects of pension insecurity on subjective wellbeing with pooled linear models, regressions per quintiles and instrumental variables. We find a statistically significant, stable and negative association between pension insecurity and subjective wellbeing. Our findings reveal that the individuals who are more affected by pension insecurity are those who are further away from their retirement, have lower income, assess their life survival as low, have higher cognitive abilities and do not expect private pension payments.

Type
Articles
Information
Journal of Social Policy , Volume 46 , Issue 3 , July 2017 , pp. 517 - 542
Copyright
Copyright © Cambridge University Press 2016 

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