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It is also important to recognize that in EECA countries today, monetary income is _stil_ a poor indicator of well-being. In recent household surveys in EECA countries, Rose and Haerpfer (1993) found the correlaiion between monetary income and total income to be quite low. When households were asked whether they were saving, dissaving, or "ge'ting by" - consuming their income only -- the largest share were "getting by". However, there was no relationship between the amount of monetary income the household earned each month and whether households were "getting by".

In addition to the income measured by household surveys, most pensioners are also better off than the average population because they are more likely to have access to cheap housing. (This is a windfall not considered as income in most poverty studies; van de Walle, Ravallion, and Gautam (1993), for Hungary is the exception). In Hungary, Georgia, Lithuania, and Bulgaria, the majority of housing stock is privately owned, bought by the current owners at highly preferential prices. In other countries, housing stock is publicly owned, and rents are kept artificially low. While some of the housing is up for sale, rent control reguladons and prohibitions against eviction protect the aging. Meanwhile, younger people without older relatives in the same location are stuck paying for higher-priced private rental housing.

While many pensioners may be better off than the average citizen, anecdotal evidence suggests that there are pockets of very vulnerable older people. In major cities in Russia, the NGO CARE found that found that a substantial proportion of those over 60 reported losing five kilos or more over the last six months. In Romania, a survey by HelpAge identified some pensioners (primarily in rural areas) living alone with little money for food or fuel. In all surveys, pensioners reported a high degree of psychological stress, given their fixed incomes and uncertain inflation. Access to health care was also a problem for most of the old-aged population, as medicine at controlled prices was rarely available, and doctors required "tips" in order for a patient to be treated.

In sum, over the next few years, while public resources are expected to be very tight and needs of all populations great, poverty alleviation objectives could be served by cutting back pensions and spending more resources on the working poor. Pensions should be reduced at the high end of the income spectrum, and for those still able to work (e.g. men and women below 65 without a disability). A flat pension or means-tested pension would clearly be more equitable, combined with special programs for the aging, (such as meals on wheels for those with mobility problems, or the creation of senior support networks). As means-tested assistance programs are created, they should also be available to this group.

Pensioners may indeed have less reason to be optimistic. While the long run prospects for economic growth are good, in the short run, they are uncertain at best, providing few opportunities for pensioners to improve their position. Privatized assets currently being distributed are not liquid enough to improve living standards of many pensioners today. As the economy changes, the pattern of household income pooling and income security needs are also changing. Younger cohorts may no longer wish to share housing or income with their older relatives. They, for the first time, are able to accumulate assets and savings to meet part of these needs, and most wish to do so. As a result, a major conflict exists between the entitlement of the generations who have retired or are about to retire with little old-age security and the living standards of the active generations.