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Living Standards in Retirement: Accepted International Comparisons are Misleading

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Frick, J., Headey, B. Living Standards in Retirement: Accepted International Comparisons are Misleading. Journal of Contextual Economics – Schmollers Jahrbuch, 129(2), 309-319. https://doi.org/10.3790/schm.129.2.309
Frick, Joachim R. and Headey, Bruce W. "Living Standards in Retirement: Accepted International Comparisons are Misleading" Journal of Contextual Economics – Schmollers Jahrbuch 129.2, 2009, 309-319. https://doi.org/10.3790/schm.129.2.309
Frick, Joachim R./Headey, Bruce W. (2009): Living Standards in Retirement: Accepted International Comparisons are Misleading, in: Journal of Contextual Economics – Schmollers Jahrbuch, vol. 129, iss. 2, 309-319, [online] https://doi.org/10.3790/schm.129.2.309

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Living Standards in Retirement: Accepted International Comparisons are Misleading

Frick, Joachim R. | Headey, Bruce W.

Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 129 (2009), Iss. 2 : pp. 309–319

12 Citations (CrossRef)

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Author Details

Joachim R. Frick, DIW Berlin, SOEP, 10108 Berlin, Germany.

Bruce W. Headey, Melbourne University, Melbourne Institute of Applied Economic and Social Research, Parkville Victoria 3010, Melbourne, Australia.

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Abstract

Accepted international assessments of living standards in retirement rely on comparing social pension incomes. These assessments conclude that European countries with contributory pension schemes provide retirees with higher living standards than liberal Anglo-American regimes in which many citizens rely on flat rate old age pensions. Comparisons based solely on pension incomes are potentially misleading because the living standards of retirees depend on their total economic resources, particularly their wealth. In this paper we make use of the wealth data in the German (SOEP) and Australian (HILDA) panels. Our revised ’present value" estimates of wealth suggest that Australian and German retirees have approximately the same living standards (mean and median), with much the same distribution (Gini).