Projecting living standards and poverty rates for French pensioners

1
Projecting living standards and poverty rates
for French pensioners

• Emmanuelle CRENNER, Insee
• IMA2007 Conference, 20-22 August, Vienna

2
Aim of the paper

• To project living standards for pensioners in
  France
• Successive birth cohorts
• For men and women

3
Why projecting living standards?

• A new pension system
• Replacement rates, pensions
• Living standards ?
• Future pensioners
• differences in socioeconomic life events
• Labour force participation
• Family life events
• Will the favourable situation perdure or not?

4
Outline of the presentation

• The French pension system
• Methodological points
• Some results on living standards and poverty
  rates for pensioners

5
The own pension
The French pension system

• The own pension, depending on contribution
• Influence of the career
• Duration of contribution
• Wages

6
The  non contributing  entitlements
The French pension system

• The survivors benefits
• To limit the loss of incomes
• A part of the deceased pension
• To survivors with thin resources
• The minimum vieillesse
• Equivalent to a poverty threshold
• Complementary entitlement

7
The living standards
Methodological points

• The sum of the incomes of the members of the
  household
• Household size
• Equivalence scales

8
Incomes in the DESTINIE model
Methodological points

• Pensions and  non contributing  entitlements
• Wages
• Unemployment benefits

9
The population observed
Methodological points

• The 1945 1962 birth cohorts
• Retiring from now on
• Concerned by a new pension system
• 15 first years after retirement can be observed
  by the model

10
Evolution of living standards of pensioners
during the retirement period
1945-1950
1951-1956
1957-1962
Population  pensioners borned between 1945 and
1962 still alive 15 years after
retirement Source  dynamic microsimulation model
DESTINIE
11
Consequences of the spouses death

• Women have lower own incomes
• After the spouses death
• For men, living standards are higher
• For women, living standards decrease

12
Survivors with a decrease of their living
standard after the spouses decease (in)
Population  pensioners born from 1945 to 1962
cohabiting or married at retirement. Source 
dynamic microsimulation model DESTINIE
13
Average change of living standards after the
spouses decease (in)
Population  pensioners born from 1945 to 1962
cohabiting or married at retirement. Source 
dynamic microsimulation model DESTINIE
14
Rate of beneficiaries of the minimum vieillesse
1945-1950
1951-1956
1957-1962
Population  pensioners born from 1945 to
1962. Source  dynamic microsimulation model
DESTINIE
15
Indexation rules
Pension
Minimum vieillesse
0
Years after retirement
16
Influence of indexation rules

• Two other scenarios
• Scenario P both pensions and minimum vieillesse
  are indexed on prices.
• Scenario W both pensions and minimum vieillesse
  are indexed on net wages.

17
Rate of beneficiaries of the minimum vieillesse
1945-1950
1951-1956
1957-1962

• Population  pensioners born from 1945 to 1962.
• Source  dynamic microsimulation model DESTINIE

18
Conclusion

• Further research impacts of the reforms
• 2003 the pension system
• 2005 the survivors benefits
• Improvement of the DESTINIE model
• A larger variety of resources
• Improved simulation of incomes

19
Projecting living standards and poverty rates
for French pensioners

• Emmanuelle CRENNER, Insee
• IMA2007 Conference, 20-22 August, Vienna