The retrenchment of public pension provision in the liberal world of welfare during the age of austerity—and its unexpected reversal, 1980–2017

Abstract

Pension system adaption during the "age of austerity" since 1980 is expected to vary between industrialized countries broadly in line with their membership of conservative, liberal, or social democratic worlds of welfare. Empirical testing on the liberal world focuses on the later period and differs in its conclusions. This paper is based on a systematic study of the scale, nature, and trajectory of change in six liberal pension systems between 1980 and 2017 using expenditure, economic, demographic, and social rights data. These data are analysed using a framework developed through critical engagement with Pierson's three welfare state change criteria and the welfare state "dependent variable problem."The paper finds a significant retrenchment of public pension provision in most liberal welfare states after 1980 but largely during the first half of the period. This has been partly reversed in most countries since the mid-1990s, though the scale of this reversal varies between countries. The recent rise of the state in liberal systems has been noted by some commentators, but to be properly understood, the paper argues, it must be considered in the context of the significant retrenchment, which preceded it. There is a scope especially for research on the broader social context of recent reforms, particularly how middle-income groups were affected by retrenchment and how recent reforms have mitigated this.

Routledge International Handbook of Poverty

“…7 Many countries have implemented automatic links between pension benefits and life expectancy. Other changes that have been implemented entail increases in employee contributions, changes in the tax incentives related to pensions, measures to increase the coverage of pensions, for instance by using autoenrollment, or changes of the indexation rules (OECD 2017;Bridgen, 2018). Obviously, these institutional changes will affect the level of pension benefits and that might explain the varying incidence of old-age poverty and the varying extent of the share of older people lifted out of poverty via pensions as presented above.…”

Studying the politics of pension reforms and their social consequences

“…In Beveridge multipillar systems, there have been different reform dynamics for the minimum income protection and the private funded pension pillars. In liberal welfare states, austerity politics led to some cut-backs but also improvements (Bridgen, 2019). Recently, British state pensions were reformed (ending state earning-related pensions) and automatic enrolment of workplace pensions was enacted to nudge working people to save, following the recommendations of the Turner Commission (Pearce & Massala, 2020).…”

Bi-Directional Feedback to the Welfare State and Public Opinion

“…I suggest that declines in public support might be expected in response to retrenchment. First of all, concrete retrenchments to the generosity of social policies in particular pensions and unemployment took place across the institutional spectrum (Bridgen, 2019;Bridgen and Meyer, 2014;Scruggs, 2006), something I discuss further in the following section. Many scholars ascribe these retrenchments to myriad factors independent of public opinion, such as global developments in trade, aging societies, currency floating, mass automation and increasing popularity of neoliberalism as a policymaking idea (Evans and Sewell Jr, 2013;Huber and Stephens, 2001).…”