Retirement Income Adequacy of Traditionally Employed and Self-Employed Workers: Analyses with SHARE Data

Abstract

This paper measures individual and household indicators of retirement income adequacy with a particular emphasis on the difference between formerly traditionally employed and formerly self-employed workers. We also present estimates of the prevalence of old-age poverty in European countries. We report the figures at the country level, covering most of the European countries, and differentiate by other standard socio-economic dimensions, such as gender, age and years of education. Formerly self-employed retirees report higher degree of financial distress and have lower incomes. They generally rely more on financial assets outside the public pension systems to cope with income and health shocks during their retirement. Their empirical income distribution represents them as a highly diverse group with high degree of income inequality. While some are rich in retirement, formerly self-employed are more often at risk of poverty than their formerly traditionally employed counterparts.