Private Pensions — a Viable Alternative? Their Distributive Effects in a Comparative Perspective

Pension reforms have been on the political agenda of governments and international organizations like the OECD and the World Bank for some time. The strengthening of private elements in pension systems is often believed to intensify existing inequalities in the distribution of pensions among the population and to contribute to the marginalization of large groups of older people. This paper explores the distributive effects of private pensions on the basis of Luxembourg Income Study microdata for 12 industrialized welfare states. While confirming that private pensions indeed tend to produce specific inequalities, its results also emphasize the importance of policy factors in mitigating the distributive effects.