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Shi, Jiaxin; Kolk, Martin
Demography, 10/2022, Volume: 59, Issue: 5Journal Article
As with many social trans fer schemes, pension systems around the world are often progressive: individuals with lower incomes receive a higher percent age of their income as a subsequent pension. On the other hand, those with lower earn ings have higher mortality and thus accumulate fewer years of pension income. Both of these opposing factors influence the progressiveness of pension systems. Empirical efforts to disentangle the effects of mortality inequality on life time pension inequality have been scarce. Using Swedish taxation data linked with death registers for 1970–2018, we study how education and preretirement earnings relate to lifetime pensions from age 60 onward and how mortalityi nequalities contribute to overall inequalities in life time pensions. The results show that a progressive replacement structure and mortality differences contribute to the over all distribution of pension payments over the life course. Up to one quarter of life time pension inequality is attributable to the greater longevity of socially advan taged groups—particularly among men. Hence, mortality inequalities are an important determinant of the over all degree of between-group income trans fers in a pension system, but they are not as important as inequalities in prior earnings.
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