Exploring a blind spot in comparative pension reform research: Long‐term trends in non‐contributory pensions in Europe

Over the past two decades, pension reforms have been high on the agenda of social policy makers in Europe. In many countries, these reforms have resulted in less generous public pensions. At the same time, minimum income protection for older adults has received attention from policy makers, but much less so from social policy researchers. Therefore, this study explored how benefit levels of non‐contributory minimum income schemes for older adults evolved from 1992 to 2012 in 13 ‘old’ EU member states. Building on two cross‐national longitudinal datasets with comparative data on minimum income protection in Europe, the study shows that over the past 20 years, the erosion of the principal safety net of last resort for older persons has been limited. Moreover, a substantial number of European countries have pursued a deliberate policy of considerably increasing minimum income benefits.     

Changes in the taxation of private pensions: Macroeconomic and welfare effects

This paper provides an applied general equilibrium analysis of several alternative taxation regimes applying to private pensions. The analysis focuses on the implications of this and other pension tax regimes for intergenerational equity, national living standards, labour supply, saving and social welfare. The method of analysis is simulation of an open economy overlapping generations CGE model. The model is calibrated to Australia and is used to examine the decision, announced by the Australian Government in its 2006 Budget, to exempt from tax all superannuation (the Australian term for superannuation) benefits received by recipients over 60 years of age.     

The redistributive effect of public and private social programmes: A cross‐country empirical analysis

A function of many national social protection systems is to substantially redistribute income. However, the size and nature of social protection programmes are changing. In a number of countries there has been a shift from public towards private social protection arrangements, with the latter substituting for, or complementing, public programmes. Developing earlier work, this present article analyses the redistributive impact on income of public versus private social protection programmes. Using recent data from the Organisation for Economic Co‐operation and Development, we find a strong positive relationship between public social expenditures and income redistribution across countries. For private social expenditures, we find a weak, but statistically significant, negative relationship with the level of redistribution. In countries where a larger share of total social expenditure is accorded to private arrangements there is less income redistribution. We conclude that the choice between the relative weight of public and private provision of social protection affects the redistributive impact of the welfare state.     

A comparative study of the relationship between pension plans and individual savings in Asian countries from an institutional point of view

Hur MH. A comparative study of the relationship between pension plans and individual savings in Asian countries from an institutional point of view Int J Soc Welfare 2010: 19: 379–389 © 2009 The Author, Journal compilation © 2009 Blackwell Publishing Ltd and the International Journal of Social Welfare. This study identifies various saving plans used as alternative pension plans in Asian countries and examines the extent to which these saving plans contribute to their pension schemes. Data were collected from six Asian countries: China, Hong Kong, Japan, Korea, Singapore and Taiwan. The comparison concentrates on an examination of differences and similarities in individual countries' privately managed pension schemes and saving plans. This study suggests that a pension system does not have to be a privately managed plan to encourage individual savings. A critical point for individual savings was avoiding a defined benefit plan. On the basis of these findings, a typology of relationships between second and third pillars and provident funds and incentive systems for individual savings was developed.     

The effects of social and political openness on the welfare state in 18 OECD countries

Studies examining the relationship between globalisation and the welfare state tend to focus on the effects of economic dimensions of globalisation, the extent to which a country is part of the world market. Globalisation also has social and political dimensions and the effects of these on welfare states – in terms of social security transfers and generosity – are studied in this article. Data from the KOF Index of Globalisation , the OECD Historical Statistics and the Comparative Welfare Entitlements Dataset are used to analyse the effects of social and political openness on the welfare states of 18 countries of the Organisation for Economic Cooperation and Development between 1970 and 2000. The analyses show that social security transfers and generosity have increased less in countries with the highest increase in social openness and that the welfare state is not affected by political openness.     

National pension systems and mass opinion: a case study of confidence, satisfaction and political attitudes in Norway

It is commonly assumed that popular support for national pension systems depends on widespread satisfaction with projected benefit levels among the working age population, and in particular that public support for the system will be jeopardised if the taxpayers do not feel confident about eventually receiving the promised benefits. On the basis of Norwegian survey data, two sets of questions are addressed in the article: (1) Is there a widespread lack of confidence in and satisfaction with the Norwegian National Insurance pension scheme? and (2) Is there an association between confidence and satisfaction and people's political attitudes towards the National Insurance pension scheme? Although we do not find any signs of a dramatic erosion of confidence towards the system, we do find that overall satisfaction with projected benefits is low among the working age population. Contrary to what one might expect, however, confidence and satisfaction from the point of view of individual interests appear not to be associated with a political preference for privatisation.     

The redistributive effect of social transfer programmes and taxes: A decomposition across countries

The aim of this article is to offer detailed information of the redistributive impact of social transfer programmes and taxes in 28 Member countries of the Organisation for Economic Co‐operation and Development, employing data that have been computed from the Luxembourg Income Study's micro‐level database. We find that welfare states on average reduce inequality by 35 per cent. Social benefits have a much stronger redistributive impact than taxes. As far as social programmes are concerned, public pensions account for the largest reduction in income inequality, although the pattern is diverse across countries. To a lesser extent, social assistance, disability and family benefits also contribute to smaller income disparities.     

Working life and retirement pensions in Spain: The simulated impact of a parametric reform

This article aims to offer an ex ante evaluation of the impact of a parametric reform of the Spanish pension system that would involve increasing the reference period used to calculate benefits, an approach proposed many times by various actors in the socio‐economic field. Such gradual change may be categorized as a non‐structural reform of the pension system. This contrasts with reforms of a structural nature that have been very popular in Latin America and elsewhere, involving the creation of defined contribution individual account schemes. As regards the parametric reform proposed in this article, the main findings indicate that it would have a small but negative impact on pension income for pensioners and would reduce income distribution.     

The welfare state as a context for children's development: a study of the effects of unemployment and unemployment protection on reading literacy scores

Data were analysed from the Organization for Economic Cooperation and Development (OECD) Program for International Student Assessment (PISA) to examine whether the relationship between parental unemployment status and child reading literacy is modified by the level of unemployment protection provided by the nation. The sample consisted of 61,946 children, nested in 3,918 schools among 17 market economies. The results of multi-level analyses indicated that, after controlling for a range of individual, family and school covariates, children with unemployed fathers in all countries had significantly lower reading literacy scores than those of employed fathers (β = −8.84, SE = 2.01). The contextual effect of unemployment protection was not significant after accounting for fathers' employment status (β = −18.63, SE = 16.26). However, there was a significant negative interaction between unemployment protection and fathers' unemployment, yielding the unexpected suggestion that, in countries with higher levels of unemployment protection, children with unemployed fathers fare worse, both in relation to children with unemployed fathers in lower protection countries, and in comparison with children with employed fathers (β = −26.96, SE = 8.08). Possible explanations are advanced for this result, including the potential for a 'discouraged child effect' arising from the potential association between unemployment protection and higher local unemployment rates (though unemployment rates at the national level were not significant).     

The impact of international migration on the public pension system: The case of Portugal

This article analyses the impact of replacement migration on the financial sustainability of the old‐age pension system in Portugal, a country with one of the largest ageing populations in Europe. We do this using demographic forecasts and prospective exercises for the evolution of the Portuguese economy. During the 2015–2060 period, our results evidence the positive impacts of international migration on old‐age pension system financial balances, reaching over 3 per cent of GDP after 2045. Moreover, even when taking into considering the low dynamics for the Portuguese economy, replacement migration is an important input to improve pension system financial sustainability.     

A conceptual approach to the creation of public–private partnerships in social welfare

All societies are confronted with complex, often difficult to overcome, challenges associated with changing population demographics. These challenges have placed increasing demands on society for social protection. Individual citizens, politicians, and scholars alike all are searching for the ideal configuration of the welfare mix, that is, a combination of various institutions that can offer the best possible combination of essential goods and services for everyone in every society. Key Practitioner Message: ● The organization of the public–private welfare partnership as viewed from a conceptual perspective; ● The unique contextual and contemporary social forces that shape public–private partnerships in modern welfare state practice; ● Contrasts in the origins and nature of public–private partnerships between two of the world's most populous countries whose histories, traditions, values, and norms differ fundamentally from one another. Even so, considerable learning regarding welfare state formation in different societies is possible through the application of the Public–Private Development Mix to the analysis of welfare state formation in these two contrasting societies.     

The challenge of pension reform in Georgia: Non‐contributory pensions and elderly poverty

Georgia's national social security system offers almost universal non‐contributory basic pension coverage. The basic pension has, to date, proved effective in dealing with old‐age poverty. But Georgia's fiscal constraints and ageing population also highlight the importance of improving the pension system, in order to ensure its sustainability. This article presents policy reform choices, which suggest that, in Georgia, pension reform might include increasing the statutory retirement ages and reducing the generosity of benefits through means testing. The case of the Georgian non‐contributory basic pension might hold value for some low‐ and middle‐income countries that are considering the implementation of, or expanding coverage under, a non‐contributory pension programme.     

The impact of child benefits on single mother poverty: Exploring the role of targeting in 15 European countries

Single mothers are vulnerable to living in poverty. The question of how to safeguard the economic status of single mothers in a context of increasing dual earnership is a crucial one. In the present study we addressed this issue by investigating the impact of child benefits on the poverty risk of single mothers in 15 European countries. We focused in particular on the design of child benefits and investigated whether targeting towards single mothers was associated with better poverty reduction. In doing so, we combined information on statutory child benefit entitlement with an empirical analysis of poverty reduction using survey data. We found that: (i) both spending effort and targeting are important to explain the effectiveness of child benefits in reducing single mother poverty; (ii) targeting is related to higher levels of poverty reduction independent of spending effort; yet (iii) it matters how targeting is done.     

The performance of the Australian welfare system in a time of neoliberal economic reform

“Neoliberalism”, both as a body of theory and as a set of policies and practices, is commonly seen as unsympathetic, even antagonistic, to the welfare state. In the period from the mid‐1980s to the global financial crisis of 2007–08, Australia underwent very considerable “neoliberal” economic policy reform. What happened to the Australian welfare system and to Australia's socioeconomic egalitarianism in this period? To shed light on that question three kinds of trend are tracked. The first is household taxes and social expenditure in both cash and kind, using fiscal incidence analysis where the main metric is “net benefits”. The second is economic inequality, as measured by the distribution of incomes and wealth. The third is the performance of the labor market, as measured by earned incomes and unemployment rates. The article concludes with an attempt to integrate the evidence collected from these three sources. The general conclusion is that the Australian welfare system did not follow the pessimists' predictions. The welfare system grew in size and redistributive quantum. Wage levels rose strongly, while unemployment rates fell. Overall, income inequality increased to a small extent, though mainly before the full economic reform process was in place, while wealth inequality changed little.     

One hundred years of money,welfare and death: mortality,economic growth and the development of the welfare state in 17 OECD countries 1900–2000

Kangas O. One hundred years of money, welfare and death: mortality, economic growth and the development of the welfare state in 17 OECD countries 1900–2000 Int J Soc Welfare 2010: ??: ??–??© 2010 The Author(s), Journal compilation © 2010 Blackwell Publishing Ltd and International Journal of Social Welfare. The article focuses on the role played by the welfare state vis‐à‐vis GDP in the increase of life expectancy in 17 OECD countries 1900–2000. The article shows that money matters, war kills and the welfare state is good for health. There is a curvilinear relationship between prosperity and longevity: after a certain level, the marginal utility of an extra dollar levels off. In the longer run, growth is a necessary but not sufficient condition. The welfare state plays its role, too. Bigger is better, be it with regard to social spending or the generosity or coverage of social protection. For the life expectancy of a population to increase, it is better to have broader coverage or universal access to care than to have more generous benefits, which are channelled to a limited circle of citizens. It is better to give adequately to all than lavishly to too few.     

The politics of safety net reform in Southern Europe during the Great Recession: Introduction to the regional issue

Southern European welfare states have developed relatively solid social insurance income maintenance programs, but have lacked effective means-tested benefit systems to address poverty and protect outsiders. Spain and Portugal are usually considered the two first countries to depart from the traditional path with the creation of minimum income schemes between 1988 and 1995. In the Spanish case, minimum income programs were established at the regional level and are very heterogeneous despite their institutional stability. The limited extent of these programs in most Spanish regions must be put in the context of national means-tested income support schemes in the fields of pensions and unemployment. The introduction of these programs in the 1980s was also a significant path departure. The combination of these programs has offered some income support to low income groups left unprotected by traditional insurance benefits, although in a patchy and limited way, especially as regards the working-age population. The social effects of the Great Recession, especially in terms of long-term unemployment, evictions and impoverishment, have reopened the debate on how to combat monetary poverty, which has been on the general election agenda since 2014–2015. Most regions have reformed their programs in different directions since 2008, under the contradictory pressures of growing demand and financial constraints. Such debate, however, has not been able yet to set a clear basis for a new development of anti-poverty income support policy.     

Poverty reduction effectiveness of public income transfers in South Korea in the wake of the global financial crises: a panel-data analysis

By using a longitudinal data-set from the Korean Labor and Income Panel Study, the present study examines the poverty reduction effectiveness of public income transfers in South Korea from 1998 to 2011. Findings indicate that the average poverty rate fell from over 20% between 1998 and 2000, to 14% from 2001 to 2006, rose to 17% by 2008, and declined to 15% in 2011. However, the poverty-rate reduction effectiveness continuously increased from 5.5% in 1998 to 32.8% in 2011. The poverty-gap reduction effectiveness also improved sixfold from 6.8 to 39.6% over the same period.     

The reform of the developmental welfare state in East Asia

This article examines social policy reforms in East Asia and whether the welfare states in the region became more inclusive in terms of social protection while maintaining their developmental credentials. It draws on findings from the United Nations Research Institute for Social Development (UNRISD) project on social policy in East Asia, covering China, Hong Kong Special Administrative Region of China, Japan, Malaysia, the Republic of Korea, Singapore, Taiwan Province of China, and Thailand. It shows that East Asian economies responded differently to the crisis in terms of welfare reform. While Singapore and Hong Kong maintained the basic structure of the selective developmental welfare state, Korea, Taiwan, and, to a lesser extent, Thailand implemented social policy reforms toward a more inclusive one. Despite such different responses, policy changes are explained by the proposition of the developmental welfare state: the instrumentality of social policy for economic development and realization of policy changes through democratization (or the lack of it).     

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

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.     

The political economy of changes in family and old‐age welfare policy spending: Analysis of OECD countries, 1998–2011

This study investigated whether in times of budget constraints and in countries with relatively large family policy spending, family policy has an advantage in the budget competition with old‐age expenditures, compared with countries with a lower level of family policy spending. We employed pooled time‐series cross‐sectional analysis of 24 OECD countries from 1998 to 2011. Our findings suggest that the initial level of family spending tends to moderate the crowding‐out effect of old‐age spending, indicating that the more mature a family spending policy is, the more it resists budget competition from old‐age policy. Furthermore, the size of government debt was found to have an insignificant effect on welfare budgeting. Our findings indicate that retrenchment in welfare spending for old age cannot be fully explained by budget constraints. Politics among interest groups associated with different welfare programmes can be an important determinant in explaining changes in spending on each welfare programme.