Pension system solidarity: young ones and elderly people prefer to share with their own age group

Is the solidarity in the Dutch pension system at jeopardy? A Netspar study by researchers at Maastricht University shows that, on average, people have a strong preference for solidarity, but there is a great deal of heterogeneity. The preference for solidarity is greatest among women and people with a high education. Both young people and the elderly have a strong preference for solidarity with their own age group. Remarkably, most people are pessimistic about the solidarity of others: they expect considerably less solidarity than they are getting from others and that they are willing to give themselves.

The participants in this study were presented with a decision simulation in which real money was at stake. This experiment showed that they are on average willing to share around 40% of the money they received with others. Young people and the elderly are willing to share a substantially larger amount with their own age group than with other age groups. Participants who expect more solidarity in an emergency situation, also turn out to be more solidarity themselves.

A questionnaire that was also part of the study showed that all age groups believe that solidarity between young and old is under pressure. There were also clear differences between age groups with regard to the desired pension system: the elderly prefer a collective rather than an individual pension scheme. For young people this is the other way around. Remarkably, only a minority in the survey indicate willingness to give up part of the income to support others. This is not in line with the results of the experiment, in which people did show solidarity. The self-proclaimed preferences regarding solidarity do not necessarily reflect true solidarity. This can be something for pension policy makers to take into account.

Learn more
Read the paper “Preferences for solidarity and attitudes towards the Dutch pension system – Evidence from a representative sample” by Arno Riedl, Hans Schmeets and Peter Werner (Maastricht University).

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

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