Renewal of Chybalski’s APS values

Firstly, the aim of this sub-chapter is to renew Chybalski’s APS values with the most available and recent data (2019), which can be obtained. Secondly, the aim is to compare the APS values from Chybalski’s analysis with the renewed values, potentially providing interesting findings and results. The statistical data for the analysis was gathered from different statistical offices or organisations, such as: OECD and Eurostat (OECD Data, 2019, Eurostat, 2021j, some on page 55). Before the renewal and comparison of the APS values, the countries selected for evaluation, spcifically between the two studies, post some variations. In Chybalski’s analysis, the inclusion of Norway is present and exhibited, but in the renewed version of the APS values, Norway is excluded from the analysis. This decision is based on the fact, that Norway is not and has not been an EU member state, which the other research subjects are or have been (the UK). Considering that most of the analysis includes the EU member states, then in the renewed version of the analysis, countries such as: Bulgaria, Croatia, and Romania are included. Figure 5 (page 48) and Table 9 (page 49) present the difference in Chybalski’s APS values, between 2009 and 2019 (author’s calculations).

48 Figure 5: Difference in Chybalski’s APS values (2009 vs 2019)

Source: author’s calculations

49

Source: Chybalski, 2012 & author’s calculations

50 Looking at results from Figure 5 (page 48) and Table 9 (page 49), the concerning finding or result featured in this comparsion, highlights the further decrease in pension system adequacy, for the Baltic pension systems. The decrease has been quite significant for Estonia and Lithuania, while the Latvian APS value has improved, but not significantly.

In 2009, Cyprus was presenting similar results as the Baltic pension systems, in terms of APS, but when comparing the older values with the renewed values, the improvement of the Cyprian pension system has been quite significant, but on the contrary for the Baltic states. When analysing and comparing the earlier results with the renewed results, the hypothesis of the thesis has been answered, meaning, that the Baltic pension systems are still one the most inadequate pension systems in the EU, in terms of pension system adequacy. Figure 6 (page 50), shows the difference of APS values, specifically between the Baltic states and the EU average. The EU average value, from the year 2009, includes 25 European member states (without Bulgaria, Croatia and Romania), while the EU average value from the year 2019, inlcudes 28 European member states (including the UK). These EU average values were calculated by the author.

Figure 6: Difference in APS values between the Baltic states (2009 vs 2019)

Source: author’s calculations 0

0,1 0,2 0,3 0,4 0,5 0,6

2009 2019

APS values

Difference in APS values

Estonia Latvia Lithuania EU average

51 When analysing and comparing the different synthetic indicators against each other (see Figure 7, page 52) some positive, but questionable findings can be observed. Firstly, in terms of gender differences (GD), the Baltic pension systems (especially Latvia), have mostly narrowed down gender differences between men and women, when observing the renewed APS values. Only the Lithuanian pension system has showed decreasing results, which indicate that the pension system itself widens the difference between men and women. This is an intresting finding. On the contrary, the Pension Adequacy Report’s results exhibited significant inequalities or differences between men and woman, either in pension payment durations or AROP rates (European Commission, 2018b). Quite similar indicators are used in Chybalski’s method (see Table 2, page 20) and the European Commission’s approach (see page 17), when comparing the two. This situation highlights quite a common academical problem, when analysing or evaluating pension system adequacy or pension adequacy. Similar indicators are used, but the evaluation and measurement approaches differ significantly, that the results obtained or calculated are proportionally different, which in itself question the results that are obtained.

Having such different results from such similar indicators or data, restricts also the conclusion making process. These kinds of situations also question, which method would be considered more adequate, correct, or trustworthy. The previous situation indirectly answers the second hypothesis of the thesis, which shows that the complexity and lack of clarity, in regard to the measurement methods and concepts of both pension system adequacy (Chybalski) and pension adequacy (Pension Adequacy Report), create restrictions in evaluating and renewing previous results or methods, or even proposing a new alternative approach.

Secondly, in terms of pension income and pension poverty indicators (PI and PP), all of the Baltic pension systems are showing decreasing results. The previous preliminary data analysis, which also used different pension adequacy indicators, exhibited similar results or findings, when analysing the differences in AROP, AROPE, and different income or replacement ratios (ARR, relative median income ratio …).

52 The similarity of the results is understandable, considering that the preliminary data analysis mostly focused on the Pension Adequacy Report’s used indicators, which Chybalski’s analysis also includes. Considering, that the results from these synthetic indicators (PI and PP) matched the results from the preliminary data analysis, while also highlighting the same concers or deficiencies, questions the evaluation and inclusion of the dimension of gender, in Chybalski’s analysis. Figure 7, exhibits the differences in individual synthetic indicators, specifically between the Baltic states and the EU average.

Figure 7: Difference in the APS synthetic indicators (2009 vs 2019)

Source: author’s calculations

0 0,1 0,2 0,3 0,4 0,5 0,6 0,7

PI (2009)

PI (2019)

PP (2009)

PP (2019) GD (2009)

(GD 2019)

Difference in APS synthetic indicators (2009 vs 2019)

Estonia Latvia Lithuania EU average

53 Taking into consideration the previous results, findings, restrictions, and opportunities, from the different appoaches, the next sub-chapter (Chapter 3.3., page 53) will try to propose a new evaluation index, which aims to connect and analyse both the adequacy of pension and pension systems.