This is the first of three chapters on the distinctive policy dynamics of particular areas of social provision. In their chapter on the dynamics of pension reform, Myles and Pierson stress a key feature of public pension systems: the fact that the implications of policy choices only play out over a very long period of time. Almost all pension systems are undergoing major reforms, yet choices made twenty‐five or fifty years ago profoundly shape the nature of the reform options available now. Most countries are severely constrained in their options by the accumulated commitments from decades of experience with social insurance; only where countries failed to develop large pay‐as‐you‐go pension systems at these earlier junctures has the much‐heralded alternative of introducing extensive funded arrangements proven to be a viable option. Myles and Pierson also emphasize the need to legitimate often politically painful revisions to this key element of the post‐war social contract — while there has been major change everywhere, in almost all countries this has required broad negotiations, including left‐of‐centre parties and/or labour unions.
We review the main theoretical conclusions from a quarter century of comparative studies of welfare states in the affluent democracies. We contrast early debates over the relative importance of industrialization, economic growth, and social classes for explaining welfare state differences with contemporary claims about the role of globalization, postindustrialism, and gender relations in shaping their futures. We evaluate the claims against recent empirical evidence with the aim of highlighting both important lessons from the past and promising directions for future analysis.
The key issues addressed in this chapter are how to manage the transition to pension reform in Europe so as to satisfy principles of intergenerational equality and intra‐generational justice, while also contributing to the further democratization of retirement among men and women that has already started. The main sections of the chapter are: Managing the transition; The economics of ageing; Redesigning the retirement contract.
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