Pensioner Households Research Articles

SOCIAL MINIMUM LEVELS IN POLAND IN THE FIRST QUARTER OF 2023

This article summarises the estimates of the social minimum in the first quarter of 2023. Following the reported increase in modelled expenditure in the last quarter of 2022, the first quarter of 2023 brought a further increase in its values. With the CPI for the first quarter of this year relative to the first quarter of 2022 (17.0%), the values of the social minimum increased by a higher degree: from 19.8% (pensioner households) to 20.8% (single people aged up to 60). When the reference point is the fourth quarter of last year, the values of the social minimum also increased faster. With a CPI value of 4.3%, the social minimum rose from 5.2% (employee households without children and in a family with a younger child) to 6.2% (single people aged up to 60), In the first quarter of 2023, the highest dynamics were observed in expenditure on housing and ener-gy carriers: it increased from 8.1% to 8.4%, with a similar scale of increase in the CPI in this ex-penditure group (8%). Expenditure on food increased from 5.6% (parent household with a younger child) to 6.1% (pensioner households), with a slightly lower CPI (5.4%). In other groups of needs, the increase in modelled expenditure tended to be higher than inflation rates. This is most evident in the case of clothing and footwear, where the difference between the CPI and the minimum subsistence valuation exceeds 3 p.p

Бідність українських пенсіонерів: довоєнна ситуація і вплив війни

The purpose of the article is to determine the level of poverty among Ukrainian pensioners, assess deprivations, including those in different types of settlements, and forecast the impact of full-scale military actions on the increase in monetary poverty. Studying poverty among pensioners during wartime is very important, as retirement age is a time in life when a person can no longer ensure a stable income, except for their pension, and requires access to healthcare and various social services. Military actions in some parts of Ukraine make normal existence impossible and critically exacerbate the problem of poverty, while in other areas, they significantly increase the poverty level due to a general decline in the standard of living. Various methods are used to study poverty among pensioners in Ukraine, both specialized and general scientific methods. The monographic method, bibliometrics, and content analysis are used for preliminary study of the problem. The computational method, forecasting, and modeling are used to forecast the impact of full-scale military actions on the growth of monetary poverty. The scale of pre-war poverty levels among Ukrainian pensioners, including self-assessment, has been assessed. In 2021, 26.3 % of urban and 29.2 % of rural pensioner households were classified as poor according to the relative criterion. On average, 23.4 % of households across the country were classified as poor. The level of poverty has been determined based on deprivations. The poverty level based on deprivation indicators in different types of settlements (share of households experiencing 4 or more deprivations) in 2020 was 2.6 times higher in rural areas compared to the corresponding indicator in cities. Deprivations among Ukrainian pensioners have been assessed in terms of types of settlements. Forecasts for poverty among Ukrainian pensioners have been provided based on the absolute criterion of expenses below the actual subsistence minimum. According to the forecasts of experts from the Ptoukha Institute for Demography and Social Studies of the National Academy of Sciences of Ukraine, in 2023, the share of the population living on less than the actual subsistence minimum will increase by 1.7 times throughout the country, compared to 2021, and reach 67.8 %. Taking into account the fact that the poverty level among pensioners, especially older people, significantly exceeds the average indicators for the country from year to year, the majority of elderly people — 76.4 % in cities and 83 % in rural areas — will fall into the category of poor.

СОЦІАЛЬНЕ ВІДТОРГНЕННЯ ПЕНСІОНЕРІВ: ДОВОЄННИЙ СТАН ТА ЗМІНИ ВНАСЛІДОК ВІЙНИ

The article is devoted to the study of the problem of measurement and prevalence of social exclusion among pensioners in the pre-war period and the changes that took place under the influence of the war. The assessment of the level of social exclusion was carried out according to its four key types: economic, political, cultural and actually social. For each type, a corresponding list of indicators and sources of information is defined. The level of prevalence of signs of social exclusion among different types of pensioner households was analyzed. It was established that in the pre-war period, single pensioners suffered the most from various manifestations of economic exclusion. This applies to both food and the purchase of clothes, shoes, non-food items of basic necessity. It is shown that the level of material exclusion of pensioners, determined according to the European methodology, significantly exceeds the indicator for able-bodied persons. Before the full-scale invasion of Russia, every second pensioner suffered from three or more signs of exclusion, defined according to the European methodology, and every third suffered from four or more, that is, from deep material deprivation. Based on the forecast of the Institute of Demography and Social Research named after M.V. Ptukha of the National Academy of Sciences, it has been proven that the vast majority of elderly people will fall into the category of poor and excluded for economic reasons. It is shown that with the beginning of a full-scale invasion of Russia, damage and destruction of residential buildings, the problems of exclusion due to living conditions move to another level. For families whose homes were partially or completely destroyed, the problem is the availability of housing in general, and only then - about equipping it with certain amenities. Retired households have been proven to suffer the most from health care exclusion. With age, the need for medical services objectively increases, and the opportunities for obtaining them narrow. The scale of actual social exclusion due to the impossibility of receiving certain social services, feelings of insecurity and discomfort, problematic social environment, impossibility to maintain constant contacts, to communicate with friends, relatives, and family members was assessed. The level of cultural exclusion in the pre-war period and during the war is analyzed. The changes that will take place in the perception of social exclusion among pensioners living in the territories where there were no active hostilities, in the front-line and front-line territories, in the occupation, are determined.

Coal or Biomass? Case Study of Consumption Behaviour of Households in the Czech Republic

Renewable sources play a crucial role in the decarbonisation process of the current linear economy, aimed at reaching the 2030 climate objectives and fulfilling the EU’s long-term strategy of achieving carbon neutrality by 2050. All economic subjects, including households, can contribute to the Green Deal goals. The main goal of this paper is to evaluate households’ consumption of energy sources for heating purposes in the Czech Republic in the period 2003–2020 and depict possible drivers of switching to biomass. For this, various data were collected, such as data published by the Czech Statistical Office, ministries, and other national authorities, as well as data from Eurostat. Concerning methods, data analysis, correlation analysis, and regression analysis were used. Different models focus on the substitution effect, rebound effect, and behaviour of different kinds of households. The results show a substitution effect connected with the consumption of coal, electricity, and biomass for heating purposes. Many households substituted coal for biomass in the observed period. On the other hand, the environmental impact of such substitution is not significant, as carbon emissions and emissions of other pollutants are stable. The substitution of fuels should be accompanied by technological change, e.g., improvement of combustion boilers. Moreover, households of pensioners are the key economic subjects with the highest impact on biomass consumption for heating purposes. Against this background we recommend policies to support households in replacing their boilers for more environmentally friendly ones.

The old-age pension household replacement rate in Belgium

The objective of the paper is to examine the retirement behaviour of Belgian workers in one-earner households who are automatically granted a more generous old-age pension benefits replacement rate, called the household replacement rate. Following a recommendation of the Belgian Pension Reform Committee, this policy is to be suppressed for new pensioners, except for those receiving the minimum pension. We provide an ex-ante impact evaluation of such reform on both pension sustainability and adequacy measures. Specifically, we test whether the household replacement rate entails a work (dis)incentive mechanism promoting (harming) pension sustainability and furthermore, we analyse the role of the household replacement rate in old-age poverty and inequality measures. To do so, we use the survey dataset SHARE and a discrete time logistic duration model to study the link between retirement and financial retirement incentives created by the social security system. Further, we use a microsimulation model to estimate the magnitude of the assumed impact of the household replacement rate on retirement and we find that this policy generates higher retirement incentives through an income effect. At the same time, we simulate various social security wealth indicators under different household replacement rate scenarios and we find that the household replacement rate could potentially play an important role in decreasing the elderly poverty rate since households with asymmetrical working arrangements are often at the lowest part of the equivalized income distribution. Overall, despite the supposed positive poverty and distributional aspects of this policy, our simulation analysis supports the reform proposal of removing the household replacement rate.

Socio-economic indicators in the current context

The database of the Research Institute for Quality of Life from Romania (RIQL) has collected over the years, an appreciable number of economic and social indicators in various stages of centralization or processing. The work carried out was imposed by the needs of different projects and not only. In this sense, a sustained effort has been made to search, collect and systematize some indicators taken from the Statistical Yearbooks (NIS), but also from other sources, in order to obtain a long series of indicators to track the dynamics over time of various economic and social phenomena. In this sense, so far, several relatively long series of economic and social indicators have accumulated, orienting us through the specific areas of interest, mainly in the field of living standards, income of the population and consumption of goods and services. The size of a household's income directly affects the other dimensions of the standard of living. Within the base there are also numerous comparative economic and social indicators, for the global and European level: income indicators; minimum consumption basket indicators; the values ​​of the monthly consumption basket of the households of employees and pensioners updated to the level of December 2021. Beyond the examples presented above, we mention that the base of indicators constituted by our initiative contains numerous accumulations from the past years, and for updating some, periodically, we carry out activities to search and study potential data sources in the country and abroad.

THE ECONOMIC SITUATION OF HOUSEHOLDS IN POLAND

The aim of this article was a one-dimensional and multidimensional assessment as well as a diagnosis of the economic situation of households according to socio-economic groups in Poland in the years 2009-2019. In the first stage of the research, the development of objective indicators reflecting the economic welfare of households was analyzed. The analysis of the economic situation of households included indicators of the income and expenditure situation in equivalent terms, the expenditure structure, measures of housing welfare including access to durable goods in households and average usable floor area of household per 1 person in m². In the second stage of the research, with the help of the classic TOPSIS (the Technique for Order of Preference by Similarity to the Ideal Solution) method, a synthetic measure of the economic situation of the studied aggregate units (socio-economic groups) was built. On the basis of the value of the synthetic measure, a linear arrangement of studied aggregate units was performed, considering variables related to the economic situation of households. The analysis was prepared on the basis of data derived from household budget surveys conducted by Statistics Poland (GUS). The research covered data from the 2009-2019 period. The performed analysis, both one-dimensional and multidimensional, proved that in considerably the best economic situation in the studied period were households of self-employed persons and households of white-collar workers. However, in the worst financial situation were households of pensioners, which occupied the lowest positions in the ranking created on the basis of the value of the synthetic measure.

ESTIMATES OF SOCIAL MINIMUM BASKETS FOR THE THIRD QUARTER OF 2021

This article presents estimates of the social minimum for conditions in the third quarter of 2021. They take into account the extent and pattern of need satisfaction under typical conditions. Due to the lack of data on changes in household consumption in 2021, the unusual conditions of Covid-19 have not yet been taken into account. When they appear and if there is a need to change the model assumptions, the value of the social minimum for this period can be estimated again. External conditions for households in the period under review were reasonably favourable (falling unemployment rate to 5.6%, decreasing number of registered unemployed). The increase in consumer prices amounted to 1%. The value of the social minimum increased modestly: by 0.6% in households without children, by 0.8% among households of pensioners, by 1.1% in a family with an older child (from 13 to 15 years of age). This insignificant increase was due to the lower valuation of food (a decrease from 0.4% to 0.5% depending on the type of household). Expenditure on housing and energy – the second important category in the model – increased from 0.8% in one-person households to 1% in four- and five-person families

Receipts and income of households in Poland

This article aims to assess the income situation of households in Poland, considering the level of receipts and in[1]come as well as their dynamics and structure. An analysis was also carried out with respect to differences between particular socio-economic groups and between households depending on the number of persons in a household. The Gini coefficient was used for analytical purposes. Moreover, an attempt was made to identify the causes of income diversification. The analysis was carried out based on data derived from household budget surveys conducted by Statistics Poland. The research covered the period from 2000 to 2019 (individual years). The study showed a real increase in the average monthly net receipts and available income in all households. The most favour[1]able financial situation was observed in white-collar workers, self-employed persons and one-person households. The least favourable income situation was found in households of blue[1]collar workers and pensioners and households of six or more persons. However, attention should also be paid to changes taking place in the structure of sources of income generated by household members. There is an increase in income from hired work and social assistance benefits. The highest variations in receipts and available income were observed in households of farmers and those of six or more persons. In contrast, the smallest variations were recorded with respect to households of old-age pensioners and one-person households.

What Will Retirement Pensions Be Like? Analysis of Spanish Future Pensioner Households in Terms of Poverty

The Spanish public retirement pension system, the same as that of many European countries, faces two important risks in the long term. On the one hand, the sustainability of the current pay-as-you-go system and, on the other hand, the ability to maintain an acceptable standard of living for the retired population. This paper presents a study on the current situation of the Spanish public retirement pension system and its effect on the future retired population. In recent years, the concern for the long-term sustainability of the system, which is based on pay-as-you-go and defined benefit, has been very present. For this reason, two major reforms were carried out in 2011 and 2013; however, different investigations have indicated the reduction in future retirement pensions as a possible consequence. Regarding this dilemma, this paper aims to study the future poverty risk of the retired population due to the current formulation of the system, by conducting, for this purpose, an analysis of the purchasing power of future pensioners based on the EU-Statistics on Income and Living Conditions (SILC) 2016 of the National Institute of Statistics of Spain. As a result, a future reduction in the replacement rate was observed, affecting the younger population to a greater extent, as well as an increase in poverty in pensioner households using two different scenarios.

Pensions, consumption and health: evidence from rural South Africa

BackgroundIncreasing numbers of older people in sub-Saharan Africa are gaining access to pension benefits and it is often claimed that these benefits promote healthy forms of consumption, which contribute to significant improvements in their health status. However, evidence to support these claims is limited.MethodsThe paper uses data for 2701 people aged 60 or over who participated in a population-based study in rural north-eastern South Africa. It analyses effects of receiving a pension on reported food scarcity, body mass index and patterns of consumption.ResultsThe paper finds that living in a pension household is associated with a reduced risk of reported food scarcity and with higher levels of consumption of food and drink. The paper does not find that living in a pension household is associated with a higher prevalence of current smoking nor current alcohol consumption. However, the paper still finds that tobacco and alcohol make up over 40% of reported food and drink consumption, and that the correlation between reported food scarcity and body mass index status is imperfect.ConclusionsThe paper does not show significant associations between pension receipt and the selected risk factors. However, the context of prevalent obesity and high shares of household spending allocated to tobacco and alcohol call into question widely-made claims that pensions enhance healthy consumption among older people in low and middle-income countries.

Consequences of elderly people’s financial decisions of illustrated by the example of capital release by means of reverse mortgage

Background: Effective functioning requires households to take financial decisions. It is essential that these decisions are rational. It was indicated in the empirical studies that customers are sometimes unable to take decisions requiring mathematical calculations and economic evaluations. Customers from the 60+ age group are considered elderly people who need financial support. Such a possibility can be offered by reverse mortgage. The main objective of the paper is to assess consequences of financial decisions made by elderly people illustrated by the example of capital release by means of reverse mortgage, and to indicate whether such mechanisms are efficient and provide an appropriate level of financial support.
 Research purpose: The main objective of this study was to assess consequences of financial decisions of elderly people illustrated by the case of capital release by means of reverse mortgage, as well as to indicate whether such mechanisms are efficient and ensure an appropriate level of support life.
 Methods: The authors make an attempt to evaluate to what extent values of monthly payments obtained for the period of ten years from reverse mortgage in such Polish cities as Warsaw, Cracow, Gdansk, Poznan, Wroclaw, Lodz might ensure an achievement of minimum subsistence level. As the hypothesis for empirical verification, it was assumed that potential ten-year monthly payments obtained within equity release in a form of reverse mortgage ensures an achievement of minimum subsistence level for one-person pensioner households. In order to calculate estimated payments from reverse mortgage, an account of terminated allowance was used. To make the assessment, the potential amounts of reverse mortgage benefits were compared with the indicator of minimum subsistence calculated in 2018 for one-person pensioner household in a property located in a city of above 500 thousand residents.
 Conclusion: The results obtained show that reverse mortgage is a service that works best as an instrument supporting a household budget with additional money, not its basis. It can be concluded that regardless of whether a senior citizen (a woman or a man) is 65 or 75, they will obtain a benefit within the framework of ten-year reverse mortgage in an amount exceeding a minimum subsistence figure if they possess a property of the area of 60 square meters in Warsaw, Cracow or Gdansk. Besides, a level of minimum subsistence will be achieved in case of a woman signing a contract at the age of 75 and living in Wroclaw as well as in case of a man between 71–75 with a property in Poznan and a man between 68–75 with a property in Wroclaw. However, regardless of a senior’s age (between 65–75) and gender, a minimum subsistence level will not be exceeded if a flat is located in Lodz.

Material deprivations in poverty estimations

Multivariate poverty measurement methods have been actively developed worldwide in recent years. Such methods include evaluation of limitations to meet basic human needs in terms of housing, clothing, footwear, education, health care, etc. In many countries non-monetary poverty lines are used as official poverty thresholds. But Russia is taking the first steps in this direction. This article presents a poverty assessment in terms of material deprivations, based on the representative survey conducted by Rosstat in 2016. Poverty analysis in terms of material deprivations shows that in Russia the most vulnerable groups are multi-child families and households of the unemployed and pensioners (especially single), as well as families living in rural areas. Such households are characterized by a higher deprivations concentration as well as a higher prevalence of separate deprivations. Measuring poverty in terms of material deprivations cannot replace the monetary poverty evaluation, but it is an important and additional part of poverty assessment. Households of single pensioners have a higher deprivations concentration but they are not poor in terms of absolute income poverty (due to introduction of supplementary pension payments which make their pensions higher than regional poverty thresholds). That means that poverty measurement should consist of a set of different methods that would give a more accurate estimation of poverty and highlight the poorest groups of the population which should be focus of social protection.

“Sizing of PV storage systems for different household types”

This paper presents a novel method of sizing PV storage systems for different household types such as single -, family –shared flats – or pensioner households. The method is based on a simulation model that characterizes the PV system including peripheral components like the inverter and the battery. The required input data to carry out the calculations is gathered from simulated household loads, characteristics of system components and measured radiation values. Sizing the grid-connected PV storage system is performed based on technical parameters only, without economic evaluation. The results show significant differences in the ideal system configuration depending on the household types ranging from a PV to battery ratio of 0.76–4.25 kWpeak/kWh. This suggests, that the household type needs to be considered before installing a PV storage system in order to ensure optimal results for the customer and the energy system. After the technical sizing, the results are compared to economic design optima, in order to investigate existing differences.

Building an integrated poverty measure by three poverty profiles

On the basis of estimating three poverty profiles calculated on sample surveys data, the article presents the methods for obtaining an integrated poverty measure, which solves the model of latent structural analysis with binary classes. In such surveys as Parents and Children, Men and Women in Family, HSE Russian Longitudinal Monitoring Survey, Russian Household Budget Survey, there are questions characterizing different profiles of poverty — economic, deprivation and subjective. The last-mentioned profile presents a subjective perception of one’s position on the scale of living standards. Estimates by the three profiles measure different sides of poverty, but it is not clear how they are harmonized, and whether latent poverty is statistically reflected in them. The model of the latent structural analysis may give a positive or negative answer to this question. In case of the positive answer it is proposed to take the probability of latent poverty as an integrated poverty measure. The article provides the results of calculations for three groups of households: those of pensioners, of able-bodied persons, and mixed households consisting of pensioners and the able-bodied. On the data from the largest Rosstat survey — Statistical Survey of Income and Participation in Social Programs (VNDN) were made estimates of latent poverty for urban and rural population of Russia, for households with different number of children. It shows that latent poverty and coherence of different population groups are not contrary to the meaningful views on the phenomenon. It is found out that the understated size of the subsistence minimum (absolute poverty line) leads to lack of coherence between three estimates for households of pensioners. In this case, feeling of poverty and deprivation levels are not in line with the economic estimation of poverty.

Old-Age Poverty: The Household Perspective; A Microsimulation Approach of Pension Entitlements in Germany

Providing a decent living standard and preventing old-age poverty are the two major challenges of pension insurance schemes. Replacement rates below the poverty line despite many years of contribution represent a major challenge for public pension schemes with respect to the systems 'raison d’etre'. The focus of the present paper turns away from individual perspective and considers household retirement incomes in the light of analysing old-age poverty and designing (minimum) pension policies. Using household survey and administrative data, the paper examines actual needs of pensioner households in relation to the means-tested minimum pension. The simulation results suggest that 56% of those living in couple households would achieve a pension level lower than means-tested minimum pension if they were considered at the individual level. The findings clearly indicate gender discrepancies: households represent a noticeable insurance function. Especially women are better off if old-age poverty analysis integrates other household incomes. The German government intends to implement the Grundrente in 2019. This minimum pension policy entitles individuals who spent more than 35 contribution years to a 10% mark-up on the means-tested minimum pension. The microsimulation analysis also provides important findings regarding the extent of entitled beneficiaries. Whilst 30% of all new pensions would benefit from an individual perspective, after means-testing only 3% at all will meet the conditions of 35 contribution years which strongly questions the target orientation of the Grundrente.

Research on Effects of Basic Pension Scheme on Household Debt Behavior

The current scale of debt of Chinese families has expanded rapidly in recent years. This article discusses the macro factors influencing household debt-basic pension insurance and verifies their relationship. Based on the micro-data of the 2014 China Family Tracking Survey, this paper analyzes the impact of China’s basic endowment insurance on household debt behavior. Using Tobit model regression, it is found that the basic pension insurance has significant positive effects on household debt level under the overall sample. Further sub-sample research on the heterogeneity characteristics of families shows, the positive correlation between basic pension insurance and household debt ratio exists in rural households and high-income families. At last, the above conclusions were confirmed by IV-Tobit regression using the average contribution rate and the institutional dependency ratio of the province where the family is located as an instrumental variable. This shows that although the increase in social security coverage has enhanced the family’s ability to counter risk, it also needs to prevent the negative externalities brought about by excessive debt of residents.

Distributional impact of taxes and social transfers in Russia over the downturn

Low oil prices and the recession in Russia which started in 2014 are increasing pressures for fiscal consolidation, after more than a decade of prosperity. This article assesses the distributional impact of the main tax and social spending programmes in Russia in 2014 by applying a state-of-the-art incidence analysis. Overall, the Russian welfare state achieves a moderate reduction in inequality through tax-benefit policies by international standards. Most redistribution occurs through pensions. Major limits on the redistributive effect of tax-benefit policy include the large share of tax revenues that come from (regressive) indirect taxes, the neutral impact of personal income taxes and the low share of spending that goes on social assistance targeted to low-income groups. The tax-benefit policy also has an important impact on the age distribution of income, as households of working-age people (with and without children) subsidize pensioner households.

CHANGES IN THE POLISH AGRICULTURAL SOCIAL INSURANCE FUND IN POST-ACCESSION PERIOD

Article presents the analysis of changes of the Polish Agricultural Social Insurance Fund in post-accession period. As a trend shows, during the after-accession period, the number of insurance people in the Agricultural Social Insurance Fund fell down (about 10% from 2005 to 2015). There could be also noted a similar downward trend of relation between the average monthly gross value of the pension from the agricultural social insurance fund and the average salary in the national economy. Article includes also results of regression analysis between average expenditure per person in households of pensioners and the average level of monthly retirement benefits.

Will Brexit Raise the Cost of Living?

This paper considers two aspects of this question. First, Brexit has already induced a devaluation of sterling of around 14 per cent since June 2016, which has started to work through to consumer prices: between June 2016 and July 2017 consumer prices increased by around 2.5 per cent. Second, while it is not government policy, nor the desire of the UK public, that the outcome of negotiations is a ‘MFN Brexit’, this remains a distinct possibility. Thus we ask how the imposition of tariffs on imports from the EU will work through into consumer prices. Making very conservative assumptions, we conclude that ‘MFN Brexit’ will increase the average cost of living by around 1 per cent and increase it for 8 per cent of households by 2 per cent or more. We present results for different groups of households according to their employment and structural characteristics and show that the impact will generally be largest on unemployed, single parent and pensioner households.