This study examines how national pension systems affect subjective well-being, emphasizing the mediating role of perceived financial security in old age. Using causal mediation analysis, we compare pay-as-you-go (PAYG) and funded pension structures across 18 advanced economies and individual-level data from 2,241 respondents in 9 European countries. We find that private pension funding enhances well-being by strengthening financial security, while PAYG systems are linked to lower security and reduced well-being—especially in ageing societies where demographic pressures heighten the relevance of pension design. Robustness checks—including fixed effects analysis and WHR covariates—confirm that pension diversity contributes to well-being beyond standard predictors.
(The paper that is referred to can be found here.)
An article on this paper was published by European Pensions.