How do OECD countries differ in population ageing and the situation of people aged 65 and older? Evidence using cluster analysis

Abstract

AbstractThe study compares the conditions created by ageing processes. It recognises differences in the situation of people aged 65 and older from a macrolevel perspective in 34 OECD countries in 2020, that is, the first year of the Covid‐19 pandemic. The paper analyses the (dis)similarities of OECD economies with regard to a set of selected variables that represent different macrolevel dimensions. Cluster analysis and linear ordering were applied, which made it possible to group the countries into separate clusters. The most obvious difference was found for the cluster consisting of Luxembourg, Belgium, France, and Spain, relative to the group that includes Mexico and Türkiye and the cluster that comprises Korea, Latvia, Japan, and Lithuania. Influential variables for grouping countries were old‐age income poverty, public transfers in the form of pensions, effective labour market exit age, and differences between expected years in retirement for women and men. The cluster analysis for 2020 also revealed the general difference between European countries and the rest of the OECD economies, as well as the importance of regional differences. The results also indicate that the clusters partially correspond to the differentiation of OECD countries based on the typology of the pension regimes, as outlined in the literature. Finally, comparing the 2020 clusters with the pre‐Covid‐19 pandemic results (2018) indicates that countries in the top and bottom‐ranked groups were resistant to the pandemic shock.