• LCDS Media

New study: How progressive is Sweden's pension system?

Published here:

Jiaxin Shi, a DPhil Student at the Leverhulme Centre for Demographic Science and Max Planck Institute for Demographic Research, has recently published a paper on whether individuals with lower socioeconomic status benefit less from pension programmes because of their higher mortality risks.

Published in Demography, the study examines Swedish national taxation records from 1970 to 2018 to examine how lifetime pensions are structured across different socioeconomic groups.

The study explains that an individual’s accumulated pension over their lifetime is affected by various factors. Many pension schemes aim to be progressive: individuals with lower incomes receive a larger percentage of their prior earnings as a subsequent pension than those with higher incomes. However, those with lower earnings also have a higher mortality rate, living shorter lives and therefore accumulating fewer years of pension income.

“We found that the pension system in Sweden is less progressive than we thought because of the regressive role of mortality. Those with lower income need to receive an even higher percentage of their prior earnings in pension income to compensate for the effect of longevity differences between socioeconomic groups,” says Jiaxin Shi.

The paper was co-authored with Martin Kolk of Stockholm University, and is expected to form part of Jiaxin’s upcoming DPhil thesis, supervised by the Department of Sociology and Centre’s Christiaan Monden.

Read the Press Release here and more study outcomes here.

Image credit: stevepb, Pixabay