Disability benefit reform in Great Britain from the perspective of the United States

In 2008, Great Britain overhauled its disability benefit programme by introducing a new disability determination process called the Work Capability Assessment and a new earnings replacement programme called Employment and Support Allowance. This article examines the British reforms from the perspective of the United States, which may consider changes to its disability benefit programme, the Social Security Disability Insurance programme, in the near future. The article provides an overview of the steps leading to the reform in Great Britain, details how the new programme operates, reviews research on its initial implementation and effects, and identifies lessons for the potential reform of the disability benefit programme in the United States.     

The Changing Conception of Pension Rights in Canada, Mexico and the United States

Relying on four conceptualizations of the welfare state (universalism, redistribution, state capacity, and intergenerational equity), this article presents an overview of recent pension reforms in Canada, Mexico and the United States. Each country has introduced important reforms in the past 25 years and is currently engaged in debates to make other adjustments. The state is reducing its financial and programmatic commitment towards current and future retirees and is promulgating reforms tightening the link between contributions and benefits. In Canada, the government raised contribution rates substantially to maintain the same level of benefits while it sought to alter its universal flat-rate benefit. In the USA, changes to Social Security have resulted in a higher retirement age and lower replacement rates. In the case of Mexico, the most important public schemes have actually been privatized.     

Ideas and Institutional Change in Social Security: Conversion,Layering, and Policy Drift*

Objectives. In recent years, social scientists such as Kathleen Thelen and Jacob Hacker have introduced new concepts to assist in the understanding of institutional change. Fostering some of these concepts, this article proceeds to augment the theoretical debate on institutional change in social science and policy research. A discussion of Social Security development in the United States advances the article's main objective: to uncover the relationship between ideational processes and policy development. Methods. Qualitative and historical analysis is offered to examine three major policy episodes: the enactment of the 1939 amendments, the first mandate of the Nixon Administration (1969–1972), and the push for Social Security privatization that emerged in the 1990s. Results. First, the analysis suggests that, through the process of institutional conversion, the 1939 amendments and the Nixon‐era reforms altered the nature of Social Security. Second, the discussion on Social Security privatization stresses the impact of layering and policy drift on public and private pensions. Conclusions. The concepts of conversion, layering, and policy drift receive further empirical support through the presented analysis. Moreover, this article suggests that, for a full understanding of institutional change, a systematic analysis of ideational processes is necessary.     

Thinking about ageing issues

Advances in longevity and falling birth rates have a profound impact on our societies, in both the industrialized and developing worlds. Demographic ageing is causing considerable concern, if not alarm, in many circles. Yet the public debate about the future of social security is often lacking in accurate and objective information. It is easier to focus on the "burden" of ageing on society than attempt to better understand the complex, interrelated nature of the issues involved, especially the rising numbers of persons of working age who are inactive and contributing neither taxes nor social security contributions. Whether the mode of pension financing is public or private, retirement income of the non-active older population must be paid out of the economic gains of the younger working population. Social security policy is all about making plans now for future generations. This means more carefully defining the terms of the public debate, articulating more clearly the desired objectives and policies.     

Mortality analysis of persons with disabilities in Argentina by age,sex and duration of benefit, 2015–16

This article describes the differential mortality of Argentina’s disability pension beneficiaries during the 2015–16 period, based on National Social Security Administration (Administración Nacional de la Seguridad Social – ANSES) payment records. It compares data for those with an assessed disability with overall population data, as well as with available international data (from Canada, Chile, Mexico, and the United States of America). In addition to breaking down mortality rates for people with disabilities by age and sex, it also factors in duration of benefit, establishing an inverse correlation between benefit duration and mortality.     

Public response to welfare policy retrenchment: The importance of trust in implementing agencies. The case of early retirement in Sweden 1999–2010

There is a long-standing argument that citizensapos; trust in the state needs to be recurrently reproduced for policies to endure and that this also includes trust in its separate policy agencies. Such trust is likely to be more important for costlier policies, as, for example, social insurance schemes. The article explores whether short-term changes in welfare programme generosity affect peopleapos;s trust in the agency implementing the programme. Using the example of early retirement in the encompassing welfare state of Sweden, we study a decade of significant reform (1999–2010), during which the inflow to early retirement diminished greatly, as did citizensapos; trust in the implementing Swedish Social Insurance Agency (SSIA). We conclude that citizensapos; trust is higher when implementation is more generous. Indeed, a third of the drop in citizensapos; trust in the SSIA over the period can be explained by declining levels of generosity in early retirement, with people politically to the left responding with lower trust. Theoretically, we suggest, first, that trust in implementing institutions can function as feedback to policy and, second, that there is a basic relationship between more generous policy outcome and higher trust in encompassing welfare states such as Sweden.     

Promoting a higher retirement age: A prospect‐theoretical approach

Demographic ageing and the necessity of raising the retirement age is one of the most frequently debated topics among European welfare policy experts. This study used prospect theory as developed in behavioural economics to explain public attitudes towards pension reforms. It argues that, in line with prospect theory, negative incentives are more useful in changing people's attitudes in favour of a higher statutory retirement age than are positive incentives. Therefore, in the case of increasing life expectancy, defined‐contribution schemes that apply actuarial formulae linking the level of starting monthly pension benefits to life expectancy are more useful in promoting a higher retirement age than conventional defined‐benefit schemes, which typically do not forge an automatic connection between longevity and starting pensions. The implications of prospect theory for attitudes towards pension reforms were tested using Eurobarometer survey data collected in 2004 and 2009 in the Czech Republic, Poland and Slovakia.     

Complementary retirement pensions: Towards a definition of terms

One of the main difficulties in carrying out an international comparison of retirement systems is the task of establishing clear common terminology. Like other social institutions, welfare systems differ from country to country; confusion can arise when a given word is applied to different institutional structures because such usage can mask important differences. On the basis of a comparison of complementary pension plans in the United States, Ireland, the United Kingdom, France and Germany, this paper discusses and clarifies the meanings of some key terms. The distinction between "private" and "public" retirement plans, commonly used by Americans, can be erroneously applied to other systems, particularly that of France, where complementary retirement plans resemble American "private" plans in some respects and "public" plans in others. The terms "occupational" and "supplementary", often used in Europe, can be used interchangeably; however, each one stresses different aspects of complementary plans. The terms "funding" and "pay-as-you-go" and their equivalents in French (répartition and capitalisation) have somewhat different meanings and quite different connotations. Finally, the author discusses the concept of "social insurance", as applied to both social security and complementary pension plans, to end with some reflections on the definition of what constitutes a retirement plan.     

Inheritance taxes in Australia: a matter of indifference,not taboo

The failure of the Henry Tax Review to fuel public debate around inheritance taxes in Australia leads some commentators to suggest that inheritance taxes are taboo in Australia. This article uses Beckert's historical analysis of inheritance law in the United States, Germany and France to assess this claim from a comparative perspective. It argues that the discursive field around inheritance taxes in Australia aligns most closely with that in the United States, but that there are substantial differences nonetheless. Whereas in the United States inheritance taxes are a touchstone for competing visions of liberal society, in Australia liberal ideals are heavily moderated by diverse pragmatic considerations. The upshot is a long tradition of bipartisanship and relative indifference around inheritance taxes, making it difficult to promote public debate as proposed by the Henry Review. At the same time, the fiscal challenges identified by the Henry Review—arising especially from the ageing of the population—means that we should not exaggerate the obstacles to their reinstatement.     

Retirement and health benefits for Mexican migrant workers returning from the United States

In the absence of a bilateral agreement for the portability and totalization of social security contributions between the United States and Mexico, this article examines the access to pension and health insurance benefits and employment status of older Mexican return migrants. We find that return migrants who have spent less than a year in the United States have a similar level of access to social security benefits as non‐migrants. Return migrants who have spent at least a year in the United States are less likely to have public health insurance or social security benefits, and could be more vulnerable to poverty in old age. These results inform the debate on a bilateral social security agreement between the United States and Mexico to improve return migrants' social security.     

France: working longer takes time,in spite of reforms to raise the retirement age

Examination of the French situation from a comparative European perspective exposes the country's poor performance with regard to the employment of seniors and the prolongation of working life. Despite a recent rise in the employment rate of 55–59 year‐olds, worrisome signs have appeared, such as the steep rise in unemployment for this age category; this is indicative of the increasing vulnerability of ageing workers in the labour market. This critical analysis of twenty years of French public policies related to older workers seeks to identify the reasons for France's lag in making working life longer. The principal reason seems to be that public policies have nearly exclusively focused on increasing the supply of senior labour without adequately taking into account incentives for stimulating corporate demand for it. The many pension reforms undertaken from 2003 to 2014 have sought to lift the institutional obstacles to working longer. Accordingly, they have raised both the legal retirement age and the requisite number of quarters of contributions for entitlement to a full pension under Social Security. But effective, active labour market policies for stimulating the demand for senior labour have been lacking.     

Understanding public attitudes towards Social Security

There has been very little research on why individuals hold different attitudes toward Social Security. In this article we integrate social location theory and political predisposition theory to provide a framework of explanation and test these theories using a unique sample from the 1998 General Social Survey. Our multivariate results reveal that social structural positions along the lines of race, gender, class and age play a more important role than political predispositions in explain-ing individual differences in support for the current Social Security system against privatisation. Political party affiliation also partly contributes to variation in support for Social Security, but political ideology does not have a significant effect. Our results suggest that with regard to support for Social Security, primary consideration must rest on social structural positions. Racial minorities, women, the poor and the elderly tend to dislike a drastic change in the current Social Security system, and Social Security reform ought to pay attention to their concerns. Our robust finding of a positive relationship between age and support for Social Security also challenges much of the established knowledge, pointing to an intergenerational discord over Social Security. It is also important to differentiate among social welfare programmes in order to uncover the real determinants of public attitudes towards them.     

Notional defined contributions (NDC): Solvency and risk in Spain

The aim of this article is twofold: to demonstrate the actuarial imbalance in the Spanish pension system in its current form; and to measure the degree of aggregate economic risk to which pensioners are exposed when applying formulas for the calculation of retirement pensions based on notional accounts. The model used generates scenarios for various periods encompassing some 10,000 different permutations of the macroeconomic indices needed to calculate such parameters as initial pension, earnings replacement rate, or internal rate of return and value at risk. The findings are analysed both objectively and subjectively. The main conclusions are that if the projections for the macroeconomic indices used bear only a minimal resemblance to reality, the pension system will accumulate further financial imbalance in the future that will force it either to reduce initial pensions considerably or to make some radical adjustments to the parameters. In terms of risk, for beneficiaries with high risk aversion the preferred formulas would be those based on future variations in wages with a constant pension amount in real terms; on the other hand, those less averse to risk would prefer formulas that generate a smaller initial pension but one which grows in real terms with subsequent changes in wage levels.     

A New Social Security Reform Consensus? The ISSA’s Stockholm Initiative

At a meeting of the ISSA Bureau in Stockholm in 1996, theInternational Social Security Association under the author's presidency launched what became known as the Stockholm Initiative, under the title "The social security reform debate: In search of a new consensus". The objective was to bring together the often contrasting views of national and international experts involved in the social security reform debate, in a first phase with particular regard to public pensions. A broad consensus emerged among specialists about the need to balance social goals and macroeconomic requirements when designing and implementing reforms. This article reviews the background to the Initiative, outlines its achievements and surveys the issues which need to be faced.     

Postretirement earnings relative to preretirement earnings: gender and racial differences

As the social security program comes under increasing financial pressure in the coming decades, the federal government will encourage elderly people to continue to work. Data from the Social Security Administration indicate that earnings are already a sizable component of retirement income. But there is public concern about how women and minorities will fare economically in this changing policy environment. To what extent can women and minorities keep earning money after they reach retirement age? This article presents the results of a study that investigated the postretirement earnings, relative to the preretirement earnings, of women and minorities, and compared the results with those for men and whites. The major finding, based on regression analyses, was that women's postretirement earnings, relative to their preretirement earnings, were greater than those of men. Furthermore, the regression results indicate that nonwhites' postretirement earnings could not be predicted by their preretirement earnings or by any of the independent variables used in the study, including age, gender, education, marital status, number of children, occupation, and preretirement earnings.     

An Enhanced Macroeconomic Approach to Long-Range Projections of Health Care and Social Security Expenditures as a Share of GDP

An enhanced two-sector economic growth model is created to project health care and Social Security expenditures as a share of GDP in the United States. Parameters used in the economic simulation model are based largely on consensus views in the literature. The main advantages of an economic model over the more commonly used actuarial models are: (1) explicit specification of underlying fundamental structures, (2) ability to investigate relationships in the entire economy, and (3) a fuller scope provided for policy analysis. Under the base model assumptions, that is, a continuation of current conditions for the production of, demand for, and financing of health care services, the economic model projects that the health care sector consumes 15.8 percent of national output by the year 2000 and 27.1 percent by the year 2040. The annual rate of increase in per capita consumption (less health spending) (“adjusted consumption”) falls from 1 percent in 2000 to 0.6 percent in 2025, and then increases to 0.8 percent in 2040, as the rate of increase in spending on health care for the elderly, and the capital investment required to support such spending, flow and ebb with the passing of the baby boom generation. Over the whole projection horizon, government spending on the health care of the elderly increases from a projected 3.8 percent of GDP in 2000 to 9.2 percent in 2040. Social Security expenditures for the elderly are projected to increase from 3.9 percent to 6.3 percent over the same period. More widespread HMO coverage is shown to lead to some small improvements in adjusted consumption. Over the long horizon, improved efficiency and productivity in the health sector and lower Social Security benefits assumed to cause an increased rate of savings and investment, however, actually cause the rate of growth in health spending to increase and adjusted consumption to decline, ceteris paribus. By contrast, an increase in sensitivity to health care prices leads to dramatically improved results, both in higher adjusted consumption and better finances for government programs of health care for the elderly.     

Socioeconomic status and the dynamics of preferences for income inequality in the United States, 1978–2016

Although considerable evidence indicates that public preferences for income inequality and redistribution vary across socioeconomic groups (i.e., occupation and income), much less is known about the temporal dynamics of these preferences. The purpose of this study is (a) to examine whether the attitudinal distance between managerial/professional workers and unskilled manual workers has changed (converged or diverged) over time and to (b) explore the reasons for and implications of the dynamics of preferences in the past several decades. Using data from the General Social Survey 1978–2016 (23 time‐points; N = 27,211), this study finds that the influence of occupational class has lost some of its significance in shaping public preferences for income inequality and that the declining effect of occupation can be explained in part by the attitudinal convergence between better‐ and less‐educated citizens. Findings suggest that proequality coalitions across educational boundaries play a remedial role in bridging the occupational divide over government redistribution in the United States.     

Privatization, provision, and targeting: Trends and policy implications for social security in the United States

This paper examines several important trends in the changing structure of social security in the United States and their impact on the elderly in different income groups. These trends involve the shifting public/private mix of retirement income, the declining replacement rates of public benefits, and reforms for targeting benefits by age. An analysis of these trends suggests that (a) social security will provide declining economic support for those most in need; (b) middle- and upper-income groups will have a diminished stake in social security, reducing the programme's political base of support; (c) increasing reliance on occupational pensions will heighten the need for greater public regulation of private schemes; (d) an unplanned two-tiered system of pensions will emerge, with the first tier consisting of a whittled-down version of social security to provide a predominant source of retirement income for low-income wage earners and the second tier consisting of private pensions for middle- and upper-income groups.     

Employers and the Management of Retirement

In the UK early withdrawal from the labour market is seen as a risk and a cost, worsening the dependency ratio, raising public and private pension costs and threatening additional welfare expenditure over the longer term. Explanations of the retirement process have focused on the welfare state and the impact of pensions and other social security policies. This paper argues that a missing actor in these accounts is the employing organization. Early retirement in the UK has been predominantly driven by the labour requirements of employers rather than state policies to encourage older workers to take early retirement. There is a case for arguing that significant change in retirement behaviour in the UK will come primarily from the modification of employers’ policies. This research is a case study of three employers: one public‐sector and two commercial. It examines the dynamics of the retirement decision. This paper reports the public‐sector case. The findings indicate that employers, in order to reduce their pensions liabilities and stem the cost of early retirement, are trying to regain control of the retirement process. The employees interviewed felt they experienced little choice concerning their retirement, had limited knowledge of the options open to them and found pensions complicated and confusing.