Exploring redistributive elements of the Swiss Pension system: An unconditional quantile treatment analysis

Reference

Kirn, T., & Dekkers, G. (2022). Exploring redistributive elements of the Swiss Pension system: An unconditional quantile treatment analysis. Presented at the 3rd Workshop of the Swiss Network on Public Economics (SNoPE), KOF/ETH Zürich.

Publication type

Presentation at Scholarly Conference

Abstract

We study how redistributive elements within the Swiss pension system impact pension income. As the impact of redistributive elements depends on the relative income position, we carry out an unconditional quantile treatment analysis. To shed light on the complex interplay between gendered labour market behaviour and pension income, we proceed in two steps: First, we estimate the differences in quantile values at individual level by using a Residualized Quantile Regression model. To analyse the impact of gendered labour market behaviour, we use the dynamic microsimulation model MIDAS_CH and project pension income by equalising labour market participation at the extensive and intensive margins, as well as wage differentials across gender and contrast this to the status quo. Four main findings stand out. First, we find redistributive elements within both pillars matter differently for individuals across the income distribution and depends on a range of sociodemographic factors, whereas women are more likely to benefit from the redistributive elements than men. Second, women across the entire income distribution benefit from both interpersonal solidarity as well as from solidarity between spouses, while for men the influence of redistributive elements between spouses plays a very minor role in the lower income percentiles, however a significant at higher income deciles. Third, with regard to the impact of gendered labour market participation and wage differentials on pension income we find, that equalising labour intensity leads to the greatest reduction of the gender pension gap. Finally, if lifetime income of men and women would equalise, the redistribution between spouses would decline, as well as the impact of interpersonal redistributive elements would have a relative smaller impact at middle and higher incomes.

Research

Persons

• Dr. Tanja Kirn

Organizational Units

• Center for Economics

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