Title:
Elderly Poverty in the Eastern EU Member States. Individual and Institutional Determinants

Abstract:
Since the end of the communist era, the new Eastern European EU member states developed a varying range of social policy measures in order to face the social consequences of the transition towards a free market economy, especially in the area of pensions. Contrary to most Western European member countries, (relative) poverty rates of the elderly are lower than the national average in many Eastern EU member countries. Nonetheless the performance of Eastern member countries in obtaining low poverty risks varies greatly among countries. Therefore, the focal point of this research lies in unraveling how the new member states manage to reduce the poverty risk of the elderly. More in specific we estimate the effect of a range of institutional policy measures on the poverty risk of the elderly (65+) using the EU-SILC (2005) data. In this study poverty is operationalised in two ways. On the one hand, we use the EU at-risk-of-poverty measure. On the other hand, we operationalise poverty as a multidimensional concept including a wide range of deprivation indicators grouped into three poverty domains: housing deprivation, financial stress and lack of means. For the clustering of our deprivation indicators we use the technique of latent class analysis. Our institutional variables refer to two important policy domains. First of all we include the influence of the pension system measured by the pension replacement rate and absolute level of the minimum guaranteed income. Second, we include a poorly researched factor, namely the employment rate of the elderly. A final macro-indicator is GDP per capita. The effects of these variables are controlled for population composition by including individual variables in our models.