Lifetime income redistribution by social security.

Abstract

"This paper discusses the redistributive impact of the Dutch social security system on lifetime basis. Net benefits appear to be positive for the birth generations up to 1960. Social insurances show a declining net benefit, whereas for occupational pensions the reverse holds. It is generally assumed that flat-rated social security schemes are more redistributive ones than wage-related schemes. However, the Dutch social security system shows that on a lifetime basis the redistributive impact of flat-rated general insurances does not necessarily largely differ from the wage-related employee insurances. Social assistance schemes result in a very large income redistribution in view of the small amounts involved. Social insurances and social assistance schemes have an income equalizing effect. On the contrary, occupational pensions increase income inequality."