Économie et Statistique n° 469-470 - Statistics on Income and Living Conditions (EU-Silc/SRCV) Income and poverty - longitudinal approach and international comparisons; quality of life
A breakdown of differences in standard of living among active persons and retirees in Europe
In 2008, the ratio between the median relative standard of living of people aged 65 and those aged 0-64 stood at 96% in France, against 86% in the rest of the EU. At European level this indicator is one of the three principal indicators used to track the suitability of pension systems. However, there have been few studies on the reasons for this French position. This article presents an analysis of the compared standards of living among the over-65s between France and a selection of European countries, using the SILC survey. Differences in gross pensions explain the majority of the indicator differentials between France and the other European countries. This effect is most marked in comparison with Denmark, the United Kingdom and Belgium, reflecting the relatively lower gross pensions in these countries. The difference is significant but smaller with Finland, Spain, the Netherlands and Germany; it is even smaller with Sweden and Italy, where gross pension levels are close to those in France. Nonetheless, the contribution of pension levels is modulated by other effects. Differences in the structures of deductions at source and, to a lesser extent, in socio-demographic structures reduce the gaps between France and the other countries. Several methodological difficulties remain, however. One of them is the unequal coverage of income sources. Another is the impossibility of counting all deductions, particularly those that finance social protection and pension schemes. Last, ideally it would be necessary to get rid of the conventional threshold of 65 in order to make a better distinction between active persons and retirees, but this approach would come up against the problem of a proper, common definition of the status of retiree between the different countries.