Are Pensions and Disability Benefits concordant with Means and Health? A Tobit Approach to SHARE data from 50-to-89-year-olds covering 12 European Countries from 2015 to 2022

Every society faces a quiet, persistent question: how do we take the money collected from everyone and give it back to those who need it most? This is the heart of public policy for older adults and people with disabilities. Governments collect taxes and social contributions to build a safety net, aiming to ensure that a retiree or a person with a physical limitation can still afford food, housing, and medicine. The challenge lies in fairness. A just system should not simply hand out the same amount to everyone; instead, it should adjust the support based on what a person already has and what they are facing. If someone is very sick, they might need more help. If someone is already wealthy, they might need less. But does the real world match this ideal? Do the pension checks and disability payments actually reflect a person's health and their remaining income, or do they follow a different, perhaps unfair, logic?

A researcher named Hans Gevers set out to answer this by looking at the actual numbers behind the policies of twelve European nations. He turned to a massive, long-running survey called SHARE, which tracks the lives of people aged fifty to eighty-nine across Austria, Germany, Sweden, Spain, Italy, France, Denmark, Greece, Switzerland, Belgium, the Czech Republic, and Poland. The study covers the years from 2015 to 2022, capturing seven years of changing lives and policies. Gevers focused on two main types of money: old-age pensions, which people receive when they stop working, and disability pensions, which are meant to support those who cannot work due to illness or injury. The goal was to see if these payments act as a fair complement to a person's situation. In other words, does the system give more money to those who are poorer or sicker, and less to those who are wealthier or healthier?

To find the answer, the researcher examined data from over 47,000 individuals, representing more than 106,000 observations over time. Because many people in the survey receive zero euros in disability benefits, the data required a special way of looking at the numbers that could handle these "zeros" without throwing off the results. The analysis looked at ten different factors for each person: their age, gender, education, whether they live alone or with others, their housing situation, their current job status, and most importantly, their self-reported health and their total household income. The study treated the amount of pension money as the result, and these personal details as the causes, to see which ones truly drove the size of the payment.

The findings reveal a system that, on a broad scale, appears to be working as intended. The data shows a clear pattern where public payments adjust to a person's financial and physical reality. For old-age pensions, the amount tends to be lower for those with worse self-reported health. The study suggests this is likely because people who report poor health often had to stop working earlier or worked in jobs that paid less, which means they accumulated fewer pension rights over their lifetime, rather than a policy adjustment for sickness itself. Conversely, for disability pensions, the pattern flips. People with worse health receive significantly higher disability benefits. The system recognizes that those who are sicker need more financial support to navigate daily life.

The study also confirms that the remaining money a person has in their household matters. The public pension schemes appear to act as a top-up. When a person has a high total household income from other sources, their public pension payment is lower. When their other income is low, the public payment is higher. This suggests that the policies are designed to fill the gap, ensuring a basic standard of living for those who cannot afford it on their own. The same logic applies to disability benefits, where the lowest-income groups receive the most support, confirming that the system prioritizes those in the greatest need.

However, the picture is not perfectly even. The data highlights a persistent gap based on gender. Women receive less in both old-age and disability pensions than men. The researcher suggests this likely stems from a wage gap that existed earlier in their working lives; if women were paid less while working, their pension contributions were lower, leading to smaller payouts later. There is also a divide between countries. The nations in Northern and Western Europe generally offer more generous payment schemes than those in Southern and Eastern Europe. This difference is likely tied to the varying costs of living and the different ways these countries organize care and support.

Another interesting detail emerged regarding living arrangements. People who live alone tend to receive higher old-age pensions, perhaps because they lack the shared economic benefits of a partner. Yet, for disability benefits, living alone is associated with lower payments. This might indicate that people with disabilities who live alone face greater difficulties and might be in institutions like nursing homes, which are not fully captured in this specific data set.

Ultimately, the study concludes that the allocation of public money across these twelve European countries is largely fair. The system successfully adjusts payments based on health and financial means, directing more resources to those who are sicker and poorer. While inequalities remain, particularly regarding gender and national borders, the core mechanism of the pension and disability systems appears to be functioning as a safety net that responds to the real needs of its citizens. The data suggests that the public transfer of money is not random; it is a calculated effort to balance the scales for those who have the least.