Uniwersyteckie Czasopisma NaukowePension efficiency in European Union countries after the 2008 financial crisis – lessons for the next turmoil
Słowa kluczowe:
pension system efficiency, financial crisis, principal component analysis, multi-informationAbstrakt
The pension system is one of the most challenging parts of a country’s social security system, as demographic change hits many macroeconomic stability concerns – public debt in particular. The 2008 financial crisis revealed fiscal imbalances in many European countries, which made their governments reform the pension systems. Demographic change is the primary determinant of pension system performance, but not the only one. Its efficiency is measured in three dimensions: sustainability (impact on labor market, pension expenditures), adequacy (reduction of old-age income poverty), and modernization (gender inequality). Since the 2008 crisis, many European countries have lost macroeconomic soundness (Greece is a notable example). This, in turn, interferes with pension system efficiency. This paper aims to investigate the link between the 2008 crisis and pension system efficiency in the three mentioned dimensions. We hypothesize that the former has had a negative impact on all three of them. In order to evaluate our hypothesis, we use data on pension system efficiency provided by Chybalski and Gumola as our dependent variables and crisis factors provided by Bernanke as our independent variables. To ensure that the set of macroeconomic variables is consistent with Bernanke’s, we apply principal component analysis to real economic data and compare it with Bernanke’s using multi-information. We found that the 2008 crisis reduced the sustainability and modernization level of European pension systems but, surprisingly, enhanced their adequacy.
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