Indexation of public pension benefits on a legal basis: Some experiences in European countries

Henk Vording and Kees Goudswaard

International Social Security Review, 1997, vol. 50, issue 3, 31-44

Abstract: Legal provisions concerning indexation of social benefits to wage or price movements are a common feature of social security systems in European countries. At the moment, there is a lively debate in some countries whether such mechanisms should be continued in a modern, flexible Welfare State. This paper analyses whether indexation provisions are effective, i.e. whether they limit the range of political decision‐making on benefit adjustments. Evidence from Germany, the United Kingdom, France and the Netherlands shows that trends in benefit adjustment are quite pronounced in time and comparable between countries, indicating that changing economic circumstances may be of more importance to changes in benefit levels than the precise contents of indexation clauses. Also, indexation clauses have frequently been adjusted to changing circumstances. Nevertheless, it appears that the incorporation of indexation provisions in the law still has a strong symbolic meaning.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:wly:intssr:v:50:y:1997:i:3:p:31-44

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