The political economy of the third age
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Population Ageing
Redistribution
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Click to increase image sizeClick to decrease image size 0034-6764/86/1001–178/$1.50/0. Notes 0034-6764/86/1001–178/$1.50/0.
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For the last decade, numerous scholarly works have centered on the question of whether states increase their spending on welfare to cushion their citizens from losses arising from globalization -- the compensation hypothesis. However, research has so far overwhelmingly focused either on the macro or the micro level of the proposed relationship. In this paper we go one step further by explicitly accounting for the combination of responses of individual citizens and country-specific characteristics in a hierarchical model framework. We first analyze whether individuals living in countries that face relatively more pressure from globalization do indeed show a more negative attitude towards increased internationalization. In a second step, we then shed light on the question of whether countries with more extensive welfare policies are successful in shielding their citizenry from the winds of globalization. In contrast to theoretical expectations, our results do not lend support to the conjecture that increasing globalization causes concern to individuals in European countries. However, as predicted by standard trade theory, those individuals who are winning from trade do indeed perceive globalization as something positive especially if they live in very open countries. As far as the nexus between welfare policies and individual contentment is concerned, our results suggest that if nation states compensate their citizens they become indeed more likely to see globalization in a positive light.
Contentment
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We argue that the Swedish welfare state has demonstrated its resilience to globalization and neoliberalism because of two of its organizational features: 1) it gives the middle class a stake in its maintenance; and 2) it promotes distributional and procedural justice that translates into middle class support. Change in the direction of a liberal or residual welfare state is highly unlikely. However, the Swedish welfare state is far less resilient with respect to change reflecting a shift to a work-related welfare state. Those features are already present to a much higher degree than is generally acknowledged. These changes will not necessarily result in lower female participation in the labor market or the dismantling of welfare services, i.e., the establishment of a conservative welfare state. But they will affect the more vulnerable groups in the labor market, including young people, immigrants, and single parents.
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We propose a positive theory that is consistent with two important features of social security programs around the world: (1) they redistribute income from young to old and (2) they induce retirement. We construct a voting model that includes a political campaign' or debate' prior to the election. The model incorporates single-mindedness' of the groups that do not work: while the workers divide their political capital between their age concerns' and occupational concerns', the retired concentrate all their political capital to support their age group. In our model, the elderly end up getting transfers from the government (paid by the young) and distortionary labor income taxes induce the retirement of the elderly. In addition, our model predicts that occupational groups that work more will tend to have more political power. The opposite is true for non-occupational groups (such as the elderly). We provide some evidence that supports these additional predictions.
Political capital
Capital (architecture)
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Abstract. Matching panel data drawn from the National Longitudinal Survey of Youth 1979 to the state-level index of economic freedom published in Economic Freedom of North America 2010, this study establishes an empirical relationship between wages at the individual level and the degree of state economic freedom. In OLS models, a one standard deviation improvement in the state economic freedom score is found to increase wages by 2.5 percent. Models that control for both person-specific and state-level fixed effects reveal a wage increase of more than 8 percent. Significant variation in wage gains is found across the different areas used to construct the economic freedom measure as well as across broad worker characteristics like race and schooling level.1. IntroductionPerhaps the most famous and persuasive exposi- tor of the idea of limited government as an economic policy position was Adam Smith. From his seminal analysis of political economy in the Wealth of Nations comes the rudimental idea that an excessive degree of government intervention in an economy would negatively impact its performance. This general pol- icy prescription stemmed from his belief that the effort of every individual to better his own condition, the key behavioral sine qua non support- ing his analytical conclusions, would operate to its greatest positive societal effect when individuals are left to pursue their own economic interests within what he termed a of natural liberty. Smith's ideal would offer only limited scope for government intervention in economic affairs.1 In his own words:All systems either of preference or of re- straint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must al- ways be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society (Smith, 1981, p.687 [IV.ix.51]).Within such a system the self-interested behavior of individuals, motivated by a desire to better their own condition and channeled through competitive markets, would tend to produce a socially-desirable outcome: maximum output of the goods and ser- vices desired by consumers and economic growth over time. More to the point, the system would op- erate most effectively when markets are freed from state interventions that alter their natural workings and lessen their competitive properties. Conse- quently, a general policy of secure property rights and limited government intervention in markets (i.e., greater economic freedom) would best position societies to take advantage of the economic potential of market-channeled self-interested behavior by safeguarding the freedom of resources to move readily to their most highly valued uses.There is a growing literature that explores the re- lationship between economic freedom and prosperi- ty across countries. Cross-country studies have typ- ically focused attention on aggregate variables of economic performance such as rates of economic growth. For example, Sturm and De Haan (2001), Cole (2003), and Gwartney (2009) have offered em- pirical evidence showing that countries with greater economic freedom have greater rates of economic growth than countries with lower levels of economic freedom. More recently, Cebula and Clark (2012) show that, for OECD nations over the period 2004- 2008, growth in per capita real GDP is an increasing function of at least seven of the ten indicators of economic freedom computed annually by the Herit- age Foundation's Index of Economic Freedom. …
Economic interventionism
Real wages
Sine qua non
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ABSTRACT The concept of welfare generation and the idea of possible conflicts between generations have been discussed frequently in the context of pension systems. In order to form interest groups that could engage in such a conflict, the generations in question would have to form clear collectives with strong agendas. This article shows that the concept of generation is rather vague and that it is not possible to define a generational collective characterised by its experiences with and attitudes towards the welfare state or the pension system. Pensioner cohorts have so far been identified mainly on the basis of financial transactions. If other resources and characteristics are taken into account, the seemingly clear-cut differences between generations get blurred. Apart from these external factors, there is also no evidence to be found for specific generations perceiving themselves as winners or losers, nor do they show an outspoken conflict potential that would mark them as actors in generational disputes.
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While there is a vast and highly contentious literature devoted to understanding the economic, social, and political consequences of the welfare state, little attention has been paid to the fundamental question of whether social security programs actually improve the overall quality of human life. We attempt such an appraisal, using the extent to which individuals find their lives to be satisfying as an evaluative metric. Considering national rates of satisfaction in the industrial democracies from the 1970s to the present, we find that citizens find life more rewarding as the generosity of the welfare state increases, net of economic or cultural conditions. The implications for social policy are discussed.
Generosity
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High levels of economic inequality are associated with a wide range of negative social outcomes. Public opinion surveys, moreover, consistently show that a majority of people are concerned about existing levels of inequality (even as they tend to underestimate how unequal their own societies are.) Why then, have the citizens of many western democracies been so reluctant to support policies and parties that are committed to addressing inequality? This paper, situated in the context of an especially small, distant and open economy, explores the discursive practices of business lobby groups and, more specifically, those groups’ arguments against higher wages at the lower end of the earnings distribution. It argues that these practices simultaneously rely on and reinforce a broad acceptance of the proposition that the social institution of the market is an immutable force that powerfully constrains society’s ability to pursue greater equality. Introduction Inequality is a crucially important social issue. High levels of inequality have been shown to be correlated with a wide range of negative consequences, including the erosion of social cohesion and trust (OECD, 2011; Uslaner, 2008); reduced democratic responsiveness (Bartels, 2008), decreased levels of overall happiness (Layard, 2005) worse public health outcomes (Wilkinson, 1996) and sub-optimal economic performance (OECD, 2014). Given these effects on the lives of individuals, organisations and societies, it is imperative to understand how public and political discussion of inequality is shaped and structured. Despite seemingly cogent lines of argument against current levels of economic inequality, a puzzle persists. As Peter Taylor-Gooby (2013, p. 31, my emphasis) observes in the British context, ‘during the past thirty years, incomes have grown more unequal, a small group at the top has captured a much greater share of resources, and poverty has increased’ and yet ‘most people have become ... markedly less likely to want government to redistribute income or tackle poverty’. In this paper I explore this puzzle, asking what intervenes between people’s expressed preference for a more equal society (Norton & Ariely, 2011) and their disinclination to support measures designed to achieve this greater equality (Bartels, 2005; Skilling, 2013). Referring to the findings of interviews and focus groups conducted in 2014,
Legitimation
Social Inequality
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Preface - A New Division of the Life Course - How Long Can Anyone Go On Living - The Age of Britain as a Country: Britain be Your Age, First Adjuration - The Age of the Present British Population, with a Glimpse into its Future. Britain be Your Age, Second Adjuration - The Rectangular Survival Curve and the Secular Shift in Ageing - The Emergence of the Third Age - Hostile and Demeaning Descriptions of the Elderly - The Insufficiency of the Family Group, in the Past and in the Present - Retirement and its Social History: Kin and Collectivity in Support of the Old - The General Theory of the Third Age - The Obsolescence of the Educational System, and the University of the Third Age - The Burden of the Elderly and Paying for your own Third Age - The Responsibilities of Older British People - Bibliography - Index
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Pleasing Any of the People, Some of the Time: Perceptions of Redistribution and Attitudes to Welfare
HOW DO PEOPLE'S IDEAS ABOUT REDISTRIBUTION AND STATE welfare affect their political judgments? The issue is of interest for practical and theoretical reasons. A party which presents egalitarian redistribution as a central social-policy objective has been replaced in government by one which does not. Various writers suggest that a lack of popular support for redistribution contributed to this change, whether because the experience of economic decline undermines altruism; because there is an anti-welfare backlash at the level of ideology; or because the least redistributive welfare services benefit the better-off groups who are also more influential .Thus free sixth-form and university education, mortgage interest relief and occupational pension subsidy are favoured, whereas rent subsidy, low wage supplementation and unemployment benefit are not. Underlying these arguments is the suggestion that welfare programmes, to the extent that they are seen to contradict popular desires, will contribute to a generalized decline in support for government.
Redistribution
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