Économie et Statistique n° 441-442 : Pension systems and their reforms; assessments and projections
The Link Between Pensions and Earned Income: A Comparison of the Main OECD Countries
This article compares the link at individual level between pensions and earned income in the main OECD countries. The rules of the pension systems in the countries studied may create a very strong connection between career-long earnings and pensions. However, in most of the countries, some pension-calculation procedures may loosen the link in one of two ways: (1) via the calculation parameters (rules for determining the reference wage and for measuring the contribution length); (2) via provisions to offset the impact of some career hazards (e.g. unemployment, disability, and child-raising) on pension benefits. Ultimately, the statistical approach needs to be supplemented with an examination of pension-calculation parameters and of pension-credit provisions in order to obtain a more refined assessment of the link between pensions and career-long earnings in each country. Because of their specific features, however, the comparison of national pension systems remains a delicate exercise.