Income inequality in later years: occupational trajectories or initial social characteristics?

This study focuses on the constitution of financial reserves in Switzerland from a longitudinal perspective. Personal income after retirement derives from financial reserves whose constitution depends both on positional factors, such as sex and birth cohorts, and processual factors, such as occupational trajectories, in the institutional context of the Swiss pension system (structural factors). We hypothesise that some processual, positional and structural factors interact with each other to shape financial reserves available in old age. We assess this set of factors and their interactions using the occupational trajectory types stemming from optimal matching analysis (OMA) combined with the hierarchical clustering and regression tree methods. We used the retrospective biographic data SHARELIFE gathered during the third wave of the SHARE survey in 2009. The results show that occupational trajectories are influential factors accounting for much of the financial reserves available in later life. However, these processual factors interact with positional factors such as sex and birth cohort. The retirement schemes generalised in Switzerland during the period under consideration add up to the effect of positional factors on the constitution of financial reserves.