Sweden's Pensioners: How They Have Fared in the Roller Coaster Ride Through the Past Decade and a Half of Deep Recession and Economic Exuberance

46 Pages Posted: 3 Nov 2008

See all articles by Björn Gustafsson

Björn Gustafsson

University of Gothenburg - Department of Social Work; IZA Institute of Labor Economics

Mats Johansson

affiliation not provided to SSRN

Edward Palmer

Uppsala University

Abstract

This study analyses the development of the economic well-being of the elderly in Sweden since 1990 - a period characterized by increased influence from the financial market and extreme economic events - using data from the Household Income Survey. The elderly were not isolated as pensions were cut, full indexation abandoned and taxes increased during Sweden's deep recession in the 1990s. Instead, relatively, pensioners fared better than the working age population. On the other hand, poverty increased in absolute terms. In contrast in the following years of rapid economic growth, the growth in the income of the pensioners fell behind that of workers and relative poverty increased. The analysis shows that the limited resources of many of the elderly put them close to a socially interesting poverty line. Income inequality among the elderly has increased with an increase in the importance of capital income for the better off among the elderly, with a clear tendency towards delineation between the better and worse off, which we conclude has implications for public expenditures for the elderly. Overall, poverty among the elderly in Sweden remains low in an international perspective and our analysis leads us to conclude that the Swedish welfare state has maintained its resilience.

Keywords: Sweden, pensions, income, poverty, income inequality

JEL Classification: D31, H55, I32, J14

Suggested Citation

Gustafsson, Bjorn and Johansson, Mats and Palmer, Edward, Sweden's Pensioners: How They Have Fared in the Roller Coaster Ride Through the Past Decade and a Half of Deep Recession and Economic Exuberance. IZA Discussion Paper No. 3248, Available at SSRN: https://ssrn.com/abstract=1294507 or http://dx.doi.org/10.2139/ssrn.1294507

Bjorn Gustafsson (Contact Author)

University of Gothenburg - Department of Social Work ( email )

Göteborg
Sweden
+46 31-773-1890 (Phone)
+45 31-773-1888 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Mats Johansson

affiliation not provided to SSRN ( email )

Edward Palmer

Uppsala University ( email )

Box 513
Uppsala, 751 20
Sweden

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