<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>This paper quantifies the effect of Poland's 1999 pension reform on the inequality of future pension benefits. The reform increases inequality, both in the upper and lower parts of the distribution. The estimates, based on the 2012 Polish Household Budget Survey, show that the Gini coefficient reaches 0.27 once the full effect of the reform has materialized. Had the pre-reform system continued unchanged, the Gini coefficient would not be >0.19. The increased inequality of pension benefits is the result of the system gradually moving from a more redistributive defined benefit pension system to a system in which benefits are strongly linked to earnings. We show to what extent minimum pension benefits mitigate the increase in inequality under different scenarios.</p>
</abstract>

This paper quantifies the effect of Poland's 1999 pension reform on the inequality of future pension benefits. The reform increases inequality, both in the upper and lower parts of the distribution. The estimates, based on the 2012 Polish Household Budget Survey, show that the Gini coefficient reaches 0.27 once the full effect of the reform has materialized. Had the pre-reform system continued unchanged, the Gini coefficient would not be >0.19. The increased inequality of pension benefits is the result of the system gradually moving from a more redistributive defined benefit pension system to a system in which benefits are strongly linked to earnings. We show to what extent minimum pension benefits mitigate the increase in inequality under different scenarios.

The distributional effects of the pension system reform in Poland

Department of Economics I, Collegium of Economic Analysis, Warsaw School of Economics

IZA Journal of Labor Policy

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"The distributional effects of the pension system reform in Poland"}

This paper quantifies the effect of Poland's 1999 pension reform on the inequality of future pension benefits. The reform increases inequality, both in the...

The distributional effects of the pension system reform in Poland

Published Online: Aug 03, 2023

Page range: -

Accepted: Oct 26, 2022

DOI: https://doi.org/10.2478/izajolp-2023-0002

Keywords
pension, inequality, replacement rate, minimum pension, microsimulation

© 2023 Elena Jarocinska et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

The distributional effects of the pension system reform in Poland

Published Online: Aug 03, 2023

Page range: -

Accepted: Oct 26, 2022

DOI: https://doi.org/10.2478/izajolp-2023-0002

Keywordspension, inequality, replacement rate, minimum pension, microsimulation

© 2023 Elena Jarocinska et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
pension, inequality, replacement rate, minimum pension, microsimulation