Generational Inequalities and Welfare Regimes

Abstract

This paper uses a new age period cohort model to show that among cohorts born between 1935 and 1975, cohorts born around 1950 are significantly above the income trend in most countries. However, such inequalities between generations are much stronger in conservative, continental European welfare states, compared to social democratic and liberal welfare states. As we show, this is because conservative welfare states expose some cohorts to high youth unemployment and make lifetime earnings dependent on a favorable entry into the labor market. We thus demonstrate that conservative welfare states have put the burden of adjustment to the post-1975 economic slowdown on birth cohorts that could not get stable jobs before 1975, while similar cohort inequalities are much weaker in liberal and social democratic welfare states. In these latter two welfare regimes, the burden of adjustment to the post-1975 economic slowdown was not put on the shoulders of some cohorts relative to others. Our analysis is the first to show which welfare regimes are more conducive to such inequalities between cohorts and what mechanisms lead to these material cohort inequalities. Acknowledgment

The Endless Baby Boomer Generation

“…There, the cohort effect reflects the divergence from the linear trend and retains a cohort curvature expressing the specificity of some cohorts compared to others. The aim of the APCD is to detect cohort bumps expressing the additional information brought by birth cohort to the model with only age and period (Chauvel 2013;Chancel 2014;Chauvel and Schröder 2014). It detects and measures the intensity of the deviation from the linear cohort trend.…”

“…Compared to the former Holford propositions, this one accepts control variables, can handle a large variety of specifications and provides confidence intervals of estimators, statistical tests and criteria able to help in the cohort diagnosis. We generalize here a former ordinary least squares (OLS) type APC model (Chauvel and Schröder 2014) in a logit one. For each country, we consider a dependent variable y i apc that denotes the existence (0/1) of participation in political discussions for individual i of age a, in period p and then belonging to cohort c = p-a.…”

“…The linear dimension expresses for instance the increasing level of living that younger cohorts enjoy, when progressive long-term economic growth happens; the non-linear one expresses, when it exists, that some cohorts are specifically above or below the general cohort trend. In France for instance, the cohort born in 1950, is particularly lucky in terms of income (Chauvel and Schröder 2014), having at the same age a systematic +10% in their income compared to cohorts born 15 years before or after. The contemporary literature on ageperiod-cohort shows that it is impossible to identify long-term trends so that they are unequivocally attributed to period or cohort.…”

“…Therefore, we take into account the economic context at age 25. Beyond Inglehart, many authors underline the relation between economic downturns and youth problems pervasively observed (Chauvel and Schröder 2014;Therborn 2014;De Lange et al 2014). The second contextual explanation results from differences between cohorts in relative size.…”

Social Epidemiology

“…Extending the view of social inequalities to a comparative perspective across historical time, it is of great interest to know if birth cohorts differ in given advantage or disadvantage compared to earlier or later birth cohorts, that is, if there are social inequalities between generations (Chauvel and Schröder, 2014). APC research aims for instance at detecting birth cohorts at risk that entered adulthood in a period of unsafe health environment, for instance an epidemic outbreak, facing stronger exposure to potentially lethal infections, whereas earlier and later (luckier) cohorts faced a better context of health socialization.…”