A European Minimum Pension and Mortality Convergence: A Counterfactual Scenario Analysis of Post-2004 Czechia, Estonia, Poland, and Slovenia

Rok Hrzic , Maastricht University
Domantas Jasilionis, Max Planck Institute for Demographic Research / Vytautas Magnus University
Vogt Tobias, University of Groningen
Helmut Brand, Maastricht University
Fanny Janssen , Netherlands Interdisciplinary Demographic Institute (NIDI) and University of Groningen

There has been only limited convergence in life expectancy between Central East European countries that joined the European Union in 2004 (CEE) and older EU member states (EU-15). The mortality gap in the EU originated in the past and may be related to various factors, including different social welfare systems. While a divergence in pension incomes occurred between the CEE countries, and between CEE and EU-15 country groups, its role in mortality convergence has not yet been examined, whereas higher minimum pension incomes are related to lower old-age mortality. We, therefore, aim to examine whether a European Minimum Pension (EMP) could have supported convergence in life expectancy between age 65 and 90 between selected CEE countries (Czechia, Estonia, Poland, and Slovenia) and the EU-15. Data on pension income, self-perceived health, and death for persons aged 65-90 were extracted from the SHARE survey. Age-mortality schedules were extracted from the Human Mortality Database. These data were used to calibrate a microsimulation model of health transitions and mortality. To model the effects of an EMP, hypothetical income distributions were imposed for each country, and counterfactual mortality rates estimated using the simulation model. Preliminary results show that an EMP would primarily benefit younger male retirees in good health and would have significantly sped up mortality convergence between the four countries and the EU-15 average since the 2004 enlargement. Alignment in minimum pension incomes may be an effective policy option to reduce current life expectancy differences across the EU.

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 Presented in Session 29. Current debates around retirement and mortality