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Lifetime income redistribution by social security

Abstract

This paper discusses the redistributive impact of the Dutch social security system on lifetime basis. Net benefits appear to be positive for the birth generations up to 1960. Social insurances show a declining net benefit, whereas for occupational pensions the reverse holds. It is generally assumed that flat-rated social security schemes are more redistributive ones than wage-related schemes. However, the Dutch social security system shows that on a lifetime basis the redistributive impact of flat-rated general insurances does not necessarily largely differ from the wage-related employee insurances. Social assistance schemes result in a very large income redistribution in view of the small amounts involved. Social insurances and social assistance schemes have an income equalizing effect. On the contrary, occupational pensions increase income inequality.

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The author would like to acknowledge gratefully the funding provided by the Research Program for Population Studies of the Dutch Scientific Organization NWO (grant no. 18.051). Helpful comments from Pierre Pestieau and two anonymous referees are gratefully acknowledged.

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Nelissen, J.H.M. Lifetime income redistribution by social security. J Popul Econ 8, 89–105 (1995). https://doi.org/10.1007/BF00172040

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  • DOI: https://doi.org/10.1007/BF00172040

Keywords

  • Social Security
  • Social Insurance
  • Income Inequality
  • Security Scheme
  • General Insurance