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Old Age Security in the Countries of Western Europe

by Jürgen Kohl

Financing social security for the elderly is of growing importance in all developed countries, being mainly due to demographical developments. The project analyses national pension systems against a demographic background country by country and comparatively.

This project investigates the development of old age pension schemes in the member states of the European Union and their impact on the living conditions of the elderly population in these countries. The present project covers Belgium, France, Germany, Greece, Italy, the Netherlands, Portugal, Spain, and the United Kingdom. A follow-up project is in preparation, extending the analyses to Denmark and Ireland as well as to the new member states Austria, Finland, and Sweden.

The provision of economic and social security in old age has been one of the core activities of the welfare state from its beginnings. Public pension schemes have been institutionalized in all West European countries, be it in the form of tax-financed demogrant schemes or contributory social insurance schemes or some mix of these two basic types. The domain of policies for old age security, however, is still broader: it also includes occupational schemes and their coordination with public schemes as well as health care and social services for the elderly.

Today, expenditures for public pensions constitute the largest part of social expenditure in all EU member countries. However, growing demographic burdens, caused by declining birth rates and growing life expectancy, and slackening economic growth, accompanied by mass unemployment, have put into question the future viability of existing institutional arrangements. Hence, it is no surprise that issues relating to pension reform are on the political agenda almost everywhere. Moreover, these demographic and economic challenges have already led to a variety of policy adjustments and reform measures in a number of countries. The efficacy and adequacy of such measures are, however, difficult to evaluate. From a macrosociological viewpoint, it can be hypothesized that despite similar challenges, the political response will differ according to the inherited institutional structure of existing schemes and according to differences in the political power structure and ideological preferences in the various countries. The options reach from finding new sources of financing - while accepting higher aggregate expenditures as the price to be paid for maintaining the relative level of living of pensioners -, via reducing the level of benefits while basically preserving the institutional structure, to a fundamental restructuring of public schemes and a shifting balance between public and private provisions.

Against this background, it is the first goal of the project to trace empirically the institutional development of public pension schemes in the various member countries since the early 70's in order to compare national trajectories and to detect common as well as divergent trends. The second goal is to analyze in some detail the consequences these (changing) schemes have on structuring the social status and the living conditions of various subgroups of the elderly population, i.e. in shaping the patterns of inequality and poverty among the elderly.

The present project was started in mid-1994 at the MZES, University of Mannheim, under the direction of Peter Flora and Jürgen Kohl (now at the University of Heidelberg), and is planned to be completed in 1997. According to the project schedule, case studies on the individual countries are being prepared in the first phase, following the same analytical guidelines. In the second phase, these country studies will serve as the basis for explicitly comparative analyses of certain aspects, such as the impact of demographic, economic, and political factors, or the distributional consequences of different institutional arrangements.

In the country studies, emphasis is given to a systematic quantitative description of benefit levels over time and benefit patterns among various subgroups of the elderly, e.g. according to age, sex, and marital status, based on detailed statistical sources of national social security agencies. In addition, attempts are made to analyze the composition of total income of elderly households (comprising, apart from public pensions, earnings, occupational pensions, and private savings as well) and the characteristics of the resulting overall income distribution.

Most of the country studies are elaborated by research assistants who have specialized in the social policy of the respective countries as former collaborators in a related research project directed by professors Hauser and Döring at the University of Frankfurt. The analysis of demographic background factors is carried out in close cooperation with staff members of the EURODATA research archive and draws on data files already established by EURODATA. The analysis of income surveys largely builds on micro-data files made available by the LIS (Luxembourg Income Study) project.

If you are interested in further information, please contact:

Prof. Dr. Jürgen Kohl
Institute of Sociology
University of Heidelberg
Sandgasse 9
D-69118 Heidelberg
Phone: +49-6221-542980
Fax: +49-6221-542996

Jürgen Kohl is professor for socio-logy at the University of Heidelberg.

EURODATA Newsletter No.4, p.14