Retirement and the Poverty of the Elderly in Portugal



The ratio between the minimum pension and the minimum wage has been significantly
increased: it was 53% in1994, and it reached a proportion of 55 to 97% in 2001, according
to the contributory period (Table 2-4). These figures were the result of an annual
adjustment above the rate of inflation. The same principle has also been applied to pensions
granted by RESSAA and to social pension.

Due to short contributory careers and very low reference earnings, the minimum and social
pensions have been the most representative old age benefits under the Social Security
System: in 2001, around 80% of all pensioners received an amount equal or less the
minimum pension of the general scheme10. In the public servant scheme, only 2% of all
pensioners received the minimum pension.

3. Data, definitions and methodological issues

The empirical data source used in this paper is the longitudinal survey of EUROSTAT,
ECHP - European Community Household Panel - covering the eight waves corresponding
to the 1994-2001 period. We use the UDB (
user data base) version of this database which
is representative of the whole Portuguese population. This database contains a systematic
information about household income, sociodemographic and socioprofessional
characterization of the individuals as their labour market status, health, education, housing
conditions and a wide set of information on social indicators of standards of living of the
households and persons.

The European Panel UDB version is based on four complementary modules of information
(EUROSTAT, 2001):
(i) the household file which has general information about incomes
and sociodemographic characteristics of the households in each wave;
(ii) the personal file
that contains information about the “eligible respondents” of the survey, that is, persons
aged 16 or more. In this file we can, for instance, collect data about the individual job
status, the educational and professional skill levels and training, or the economic activity
status (retired/ not-retired), health situation, interpersonal relationships, and other subjective
assessments;
(iii) register file which gather the whole sample of individuals (adults and

10 This rate includes pensioners under the special social scheme for agricultural activities (RESSAA) and the
non-contributory scheme.



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