The Impact of the Flexibilization of Employment Histories on the Pension Adequacy in Poland

Alicja Jajko-Siwek
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Alicja Jajko-Siwek: Department of Econometrics, Institute of Informatics and Quantitative Economics, Poznań University of Economics and Business, 61-875 Poznań, Poland

Sustainability, 2020, vol. 12, issue 19, 1-16

Abstract: Flexibilization of employment history is a sign of our time. One of the real consequences of this phenomenon is the risk of a decrease in the level of future pension benefits, which can lead to the deprivation of pension system sustainability. Subsidies from the state budget will be necessary to the inadequate pensions. The paper aims to present how changes in earnings and employment breaks, caused by flexibilization of employment history, will impact the adequacy of pension benefits in Poland. In the research, different scenarios of employment history have been considered. As the method of research, we have used one of the data mining tools—the classification tree method with CART (Classification and Regression Trees) algorithm. The obtained results have shown a crucial role of stable individual promotion of earnings. Significant also is the level of earnings. The lower earnings can be compensated by long periods of seniority or by higher retirement age. Any breaks in work will lead to a reduction in the level of pension benefits and difficulties in maintaining adequacy. The suggestion from the study is that even if you are unemployed or receive a low salary, you should leave at least a low contribution to the pension system.

Keywords: adequacy; classification tree; flexibilization; pension sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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