Poverty and social exclusion of the elderly AIM Work Package 8 Cok Vrooman WP 8.1: Social exclusion of the elderly; a comparative study of EU Member States, G. Jehoel-Gijsbers & C. Vrooman (2008) Enepri Research Report No. 57 WP 8.2: Poor elderly in the EU’s New Member States, J.C. Vrooman (ed.), forthcoming

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Components of Work Package 8 WP 8.1: Social exclusion (EU-25) among the elderly (55+), cross- comparative, 2005  Jehoel-Gijsbers & Vrooman (SCP) WP 8.2: Poverty (NMS) among the elderly (55+), ca a) cross comparative analysis 2005: Stropnik & Kumpf (IER) b) in-depth country studies of trends: Estonia, Hungary, Poland, Romania, Slovakia, Slovenia (CASE, TARKI, BIER, IER) c) conclusions and policy implications (SCP)  single publication (forthcoming) Presentations: Cok Vrooman: 1, 2b/c Nada Stropnik: 2a

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Research issues WP8.1 (social exclusion) 1 Differences in social exclusion of the elderly among countries 2 Differences between old and young within countries 3 Individual risk factors for social exclusion of the elderly 4 Country traits determining social exclusion of the elderly

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Methodology Application of conceptual model and methodology developed for the Netherlands (Jehoel-Gijsbers, 2004; Jehoel-Gijsbers & Vrooman, 2007) to EU Member States Secondary analysis of existing comparative data (EU-SILC 2005; ESS 2002)  more limited measurement of social exclusion than in original ‘dedicated’ Dutch dataset Basic premise: social exclusion ≠ poverty

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Social exclusion Social exclusion: - Direct definition, no proxy variables/risk factors (income, education, unemployment …) - Multidimensional concept, with 4 theoretical dimensions: a) material deprivation (actual hardship) b) inadequate access to social rights (mainly services) c) insufficient social participation d) insufficient cultural/normative integration a, b= economic or structural exclusion (Anglo-Saxon tradition) c, d= socio-cultural exclusion (mainly French tradition)

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Social exclusion: indicator variables Material deprivation: Deficiencies in relation to basic needs and material goods; problematic debts; payment arrears (a.o. housing costs); lifestyle deprivation. Lack of social rights: Waiting lists, financial impediments and other obstacles to: health care, education, housing, legal aid, social services, debt assistance, employment agencies, social security, commercial services (banking and insurance); insufficient safety. Insufficient social integration: Low participation in formal and informal social networks, including leisure activities; inadequate social support; social isolation. Insufficient normative integration: Weak work ethic; abuse of the social security system; delinquent behaviour; deviating views on the rights and duties of men and women; no active citizenship in local neighbourhood and society at large.

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Social exclusion: measurement model (Overals)

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Social exclusion: explanatory model

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Social exclusion in the EU: material deprivation (55+) Source: EU-SILC 2005 (SCP treatment)

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Social exclusion in the EU: limited access to social rights (55+) Source: EU-SILC 2005 (SCP treatment)

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Social exclusion in the EU: low social participation (55+) Source: ESS 2002 (SCP treatment)

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Social exclusion in the EU: combined index (55+) Source: ESS 2002, EU-SILC 2005 (SCP treatment)

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Individual risk factors (I) Between age groups, elderly are: less materially deprived than younger cohorts (all countries) more often lacking in social rights in Eastern en Southern EU member states; but in most other countries elderly are better off in this respect more socially isolated than younger cohorts (all countries)

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Individual risk factors (II) Within the age group 55+, health is the dominant risk factor for social exclusion in each country; income level especially important for material deprivation Results country-specific logistic regression analyses

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Some regional differences (NUTS-1 level)

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Multilevel analyses: country traits and economic-structural exclusion

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Conclusions WP 8.1 The degree of social exclusion among the elderly clearly differs between EU member states: NMS (Baltic, Poland) > Mediterranean > Continental+Anglo-Saxon > Nordic+NL Elderly are less materially deprived but more socially isolated than younger cohorts in all Member States; in NMS/Mediterranean elderly also lack more often in terms of social rights Health is the best predictor of social exclusion among the elderly at the individual level Country differences in SE are partly related to varying institutional arrangements, but indirectly (through income inequality = best predictor at country level)

How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008 Research issues WP8.2 (poverty in NMS) 1Current level of income/degree of poverty of the elderly (55+) in the NMS that entered EU since Relation with institutional, demographic and socio- economic context 3Specific problems of ‘marginal’ elderly groups in the NMS

WP8.2: design 1.Cross-comparative analysis EU-SILC In-depth country chapters on Estonia, Hungary, Poland, Romania, Slovakia, Slovenia; trends since early 1990s, mainly based on national household budget surveys 3.No forecasting/modeling of adequacy and sustainability, but some policy implications How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008

WP 8.2: some general conclusions Currently elderly in NMS are not worse off than non-elderly in terms of absolute/relative poverty and income satisfaction Yet elderly in the NMS are worse off than the elderly in OMS according to most indicators And the future income position of the elderly can be expected to be on the decline in most NMS, due to: - implementation effect of new pension formulae - the impact of ageing and external migration - after-effects of the transition period of the 1990s (high unemployment, low accrual of pension rights) - decline of the extended family (less economies of scale) How to make European pensions adequate and sustainable? Centre for European Policy Studies, Brussels, October 20, 2008