In: Binstock, Robert H. / George, Linda K. (Eds.): Handbook of Aging and the Social ... In: Bengtson, Vern L. / Schaie, K. Warner / Burton, Linda M. (Eds.): Adult.
1 Martin Kohli (Bremen International Graduate School of Social Sciences, Bremen, Germany & European University Institute, Florence, Italy)
Cleavages in Aging Societies: Generation, Age, or Class?1
To appear in Bernd Marin (Ed.): The Future of Welfare in a Global Europe Farnham: Ashgate, 2015
Abstract What major conflicts are likely to emerge in aging societies, and thus, what basic cleavages can we expect? Age groups and generations are important dimensions of social inequality. They might be assumed to become the primary lines of societal division and conflict as societies age. However, there are mediating institutions in the realm of politics and families that have so far kept these conflicts at bay. On the other hand, class conflicts may rise again as old age will be increasingly marked by the ‘vertical’ divisions of income, wealth, occupational status or education. In this chapter, I first discuss the salience of age and generational conflicts and the difference between them. I then analyze what social inequalities along the age and generation lines have developed, how these inequalities translate into political divisions, and why they usually do not manifest themselves as open conflicts. I also examine the emerging class inequalities and conflicts, and conclude by asking how the two lines of conflict, generation/age and class, are likely to shape the future of aging societies.
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This chapter builds on a number of preceding papers in which the arguments presented here have gradually taken shape (Kohli, 2010, 2012, 2014). I am grateful to Daria Popova for preparing some of the data of section 4, to Juliana Bidanadure and Rasmus Hoffmann for their helpful suggestions, and to the members of the MacArthur Foundation Research Network on an Aging Society for many stimulating discussions.
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1. Introduction
The implications of what is variously called “population aging” or “societal aging” – in order to distinguish it from the aging of persons and their bodies – have become one of the key topics of research and public debate. In the present chapter I focus on an issue in this context that has received little attention so far: what major conflicts are likely to emerge in aging societies, and thus, what basic cleavages we may expect.2
Age groups and generations are important dimensions of social inequality. They might be assumed to become the primary lines of societal division and conflict as societies age. However, there are mediating institutions in the realm of politics and families that have so far kept these conflicts at bay. On the other hand, class conflicts may rise again as old age will be increasingly marked by the ‘vertical’ divisions of income, wealth, occupational status or education..
In what follows, I will begin by discussing the salience of age and generational conflicts and the difference between them (Section 2). I will then examine what social inequalities along the age and generation lines have emerged (Section 3), how these inequalities translate into political divisions, and why they usually do not manifest themselves as open conflicts (Section 4). Section 5 will treat class inequalities and conflicts, and Section 6 will ask how the two lines of conflict, generation/age and class, are likely to shape the future of aging societies.
2. Old and new inequalities The ‘social question’ dominating the end of the 19th century in Europe was the integration of the newly emerging class of industrial workers, in other words, the pacification of class conflict. This was achieved by giving workers some assurance of a stable life course, including some protection from labor market risks and also the institutionalization of 2
The concept of cleavages is often used to denote socio-structural differences and divisions that manifest themselves in political behavior and conflict (e.g., Bonoli & Häusermann, 2009). Other authors give it a more encompassing meaning, that of a “combination of interest orientations rooted in social structure, cultural/ideological orientations rooted in the normative system, and behavioural pattern[s] expressed in organisational membership and action” (Bartolini, 2004:2), in other words, of a socio-structural and cultural division that is fully mobilized in terms of political organization and behavior. I follow here the latter approach.
3 retirement as a normal stage of life funded through public social security (Kohli, 1987). Over the 20th century, this was extended to other parts of the population as well, so that by the 1960s most advanced societies had a broadly inclusive welfare state in place that supported the ‘Fordist’ pattern of industrial relations and the life course (Mayer, 2001). At the beginning of the 21st century, class conflict seems to be defunct and its place taken over by generational conflict (Bengtson, 1993; Kaufmann, 2005). The new social question, so the argument goes, consists in maintaining a balanced ‘generational contract’ that protects the old and invests in the young while being financially sustainable and socially just (Albertini et al., 2007:319). This shift from class to generation is due both to the success of the welfare state, which has created age-graded claims and obligations and turned the elderly into its main clients, and to the demographic challenge of low fertility and increasing longevity.
Are we thus moving from class conflict to generational conflict? Such an assertion needs to be qualified in two ways.3 First, it should be noted that conflict or competition between young and old over scarce resources is by no means new; it is a common theme in historical and anthropological accounts of pre-modern societies as well (e.g., Foner, 1984). However, with the evolution of the modern welfare state the form and arena of this conflict have changed. Secondly, and more importantly for our present concerns, it remains essential to assess the extent of the generational cleavage per se and the extent to which it masks the continued existence of the class cleavage between wealthy and poor (or owners and workers). There are moreover other cleavages that are usually categorized as “new” dimensions of inequality (in distinction to the “old” ones of class), such as those of gender and ethnicity (or “race”). Emphasizing the generational conflict as the new basic cleavage in society tends to downplay other inequalities, and by this, turns into an ideology that functions as a way to divert attention from the problems of poverty and exclusion within generations, in other words, those based on class.
Age is today the foremost basis for public entitlements and obligations. Public redistribution over the life course has been one of the key elements of what I have called the institutionalization of the life course as a sequence of clearly delimited periods of life, each with its own profile of social roles and positions, of cultural expectations, and of legal obligations and claims (Kohli, 2007). As shown by life-course profiles of public benefits and 3
For the following arguments I rely on my more extensive discussion in Kohli (2006).
4 contributions, the elderly have become the main beneficiaries of such redistribution, mostly through pensions and health care (Lee & Mason, 2011). Children and adolescents are beneficiaries as well but to a lesser extent, mostly through education and family benefits, while those of working age are net contributors.
Before the introduction of retirement pensions, old age could generally be equated with poverty. In the 1950’s, large parts of the developed world still manifested a concentration of poverty among the elderly. Through the expansion of the welfare state this has been gradually mitigated. The welfare state now supports the ‘dependent’ periods of the life course (children/youth and old age) through the contributions and taxes of the ‘active’ population. This is most obvious in the case of pay-as-you-go (PAYG) pension systems where retirement pensions are financed through the simultaneous contributions of those in the labor market.4 Education and family benefits are today increasingly important, but overall public redistribution is still largely skewed in favor of the elderly.
This is the background on which the notion of the ‘coming generational storm’, as Kotlikoff & Burns (2004) have conjured it, has taken hold. For the last three decades the distribution of resources between young and old has usually been debated under the term ‘generational equity’ (cf. Williamson & Watts-Roy, 1999; Kohli, 2006). It refers to the claim that the elderly receive too high a share of public resources, and that this comes at the expense of the non-aged population, especially children and youth. By subsidizing the elderly instead of the young, so the argument goes, societies compromise their future. Again, this is not a new idea. It takes up the fear of population decline and societal senescence that came into prominence in some European countries in the late 19th century, such as in France after it had lost the 1870/71 war with Prussia (Teitelbaum & Winter, 1985). This fear is part of the undercurrent of geopolitical reasoning that has persisted up to today.
Still, the challenges to the generational contract are real and cannot be taken lightly. The demographics of population aging threaten the financial viability of public pension systems because the relation between the working-age and the retired population is getting less favorable. Globalization means that economies have become more open not only to trade but 4
Interestingly, the first project commissioned by Chancellor Adenauer for what was to become the West German pension reform of 1957, the ‘Schreiber Plan’, provided for a three-generation contract, with the contributions of the ‘active’ population financing public benefits for both children/youth and the elderly. Adenauer famously objected that this was not needed as “people will get children anyway”, and thus the project was reduced to a two-generation format.
5 also to capital flows; open economies compete for their productive investments and tax base (Scharpf & Schmidt, 2000). Some scholars speak of an inevitable transition from welfare states to investment states and even competition states (Vukov, 2014) where all social and economic policies are focused on creating a more investor-friendly environment. Benefits for the elderly obviously do not fit such an agenda.5
The generational equity debate claims to derive from principles of distributional fairness, but these claims do not hold up to closer analysis. In terms of legitimacy and distributional justice, public redistribution among age groups is (relatively) unproblematic because we can expect everyone to live through the different stages of life. This is the main implication of the position known as ‘complete lives egalitarianism’.6 Unlike gender or ethnic groups, age groups do not have a fixed membership but a regularly changing one where all individuals progress through the life course from one stage to the next according to an institutionalized schedule. Thus, differential public treatment of age groups is morally acceptable (cf. Daniels, 1988) if justified by the different needs that age groups have, or by reasonable political goals such as investing in human capital among the young or providing income for retirement among the elderly. There is one major problem here, however: the fact that people do not all live equally long (Lazenby, 2011). This differential longevity is socially stratified (Hoffmann 2008; Olshansky et al., 2012), and thus constitutes a massive social inequality in terms of benefit receipt that is compounded by demographic aging (see below, Section 5).
Intergenerational redistribution, on the other hand, is inherently problematic. ‘Generation’ can be defined at the kinship level, in terms of position in the family lineage, or at the societal level, in terms of being born in a given time period7 and thus sharing the same historical experiences (and the same social obligations and benefits) at the same ages. Thus, societal generations have a fixed membership, and there is no legitimization for an unequal treatment of them. One may ‘opt out’ of one’s generation in terms of attitudes and behavior, but one
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Generational equity seems to be especially at risk in pay-as-you-go (PAYG) pension systems because they allegedly would be more vulnerable to demographic changes than funded schemes. This idea has been sponsored by many powerful actors and has gained wide currency even though, as Barr (2002), among others, has shown, it is economically mistaken. Both PAYG and funding are ways of organizing claims on future output, so they are both adversely affected by a fall in output. Among the ten “myths” that Barr aims to dispel, the myth that “funding resolves adverse demographics” is his Number One. 6 See Bidanadure (2014) for a critical discussion of this view and of other approaches to justice between (coexisting) generations. 7 This is the concept of ‘birth cohort’. The concepts of ‘generation’ and ‘cohort’ are used as synonyms here. ‘Generation’/’cohort’ is also sometimes defined by reference to other important life course events such as graduation or marriage (for a broader conceptual discussion see Kohli, 2006).
6 cannot opt out in terms of public obligations and entitlements. The intergenerational sharing of burdens and rewards is just or fair to the extent that each generation can expect to receive the same treatment as the preceding and following ones while moving through the stages of life. Financing the elderly during one’s professional life through a pay-as-you-go system is not problematic as long as one can expect to have one’s own retirement funded by the next generation in the same way. Unfortunately though, this is rarely the case; generational differences are the rule rather than the exception. They are produced by historical watersheds as well as by incremental macro-structural, cultural and demographic change.
3. Social change and generational divisions
Historical watersheds such as wars, great economic crises or major systemic transitions change living conditions in a brief time span and thus affect the life chances of successive generations differently.8 The same is true for more gradual macro-structural changes, such as the major shift from agriculture to industry and services in advanced societies over the past decades. This shift occurred with greatest speed at the European periphery: in the Mediterranean countries, Scandinavia and Ireland. As an example, Finland experienced a massive contraction of agriculture (including forestry) during the life course of the current elderly. Its agricultural labor force decreased from 71 percent in 1920 to 46 percent in 1950 and eight percent in 1990. In rough measure this means that the majority of present Finnish retirees were born on farms – an experience which is not easily forgotten, and may be an explanation for the fact that in many European countries the political concerns of agriculture still enjoy a much higher public support than would seem warranted given the current size of this sector.
Cultural shifts such as those towards individualization as well as shifts in the institutional context of lives leading to new sets of age-graded experiences, obligations and entitlements also play a role. Foremost among the latter are the institutions of the educational system, the labor market and the welfare state. As to the educational system, the basic change has been the expansion of secondary and tertiary education and thus the prolongation of schooling. As
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With Karl Mannheim (1928), we may ask which life stages are especially open to the imprint of historical events, in terms of values and world views as well as in terms of subsequent social positioning. For Mannheim the most “impressive period” was that of adolescence, when individuals take conschious hold of the world in which they live. Later life-course scholars have usually favoured some earlier age (e.g., Elder, 1974).
7 to the labor market, it is often claimed that there is a generational shift from stable to precarious careers, which however shows considerable variation by country (e.g., Blossfeld et al., 2005). As to the welfare state, the most far-reaching claim is that of a generational conspiracy advanced by David Thomson (1989) for New Zealand, attempting to show that there was one generation which played the political system so well that it reaped all the advantages while both those living earlier and those living later had to pay for it. This generation first created a youth-centered welfare state with housing subsidies and benefits for young families and then, over its own life course, turned it into a welfare state for the elderly. This is a challenging assertion which has not found support for other countries so far but highlights the potential of welfare state interventions to create generational discontinuity.
Last but not least is demographic change. Richard Easterlin (1980) has offered a far-reaching model of economic cleavages among generations based on the demographic discontinuity of baby boom and baby bust. He argues that larger birth cohorts face more competition in schools, labor and marriage markets and will thus remain relatively disadvantaged during their entire life course. As a consequence, they also produce fewer children. For these smaller birth cohorts, the opposite holds, so that they will have more children again. This argument has not been corroborated in countries other than the U.S., but is an important reminder of how demographic and economic fortunes may interact with each other to produce cohorts with very different life chances.
How do these different life chances manifest themselves in terms of economic well-being? As a summary measure, we may examine the relative incomes by age groups in the mid-2000s and their changes from the mid-1980s for selected OECD countries.9 Results show that children and adolescents up to age 17 fare worse than the population of working age, and the elderly over 65 in most countries even more so. Among the latter, the ‘old olds’ (over age 75) are particularly disadvantaged.
A precise differentiation between life course (age) and generational (cohort) effects would require data over time for corresponding age groups and analytic models for separating age, cohort and period effects.10 The present data with changes from the mid-1980s to the mid-
9
See Kohli (2014) for details. Data refer to disposable incomes relative to population means. Incomes are equivalized, i.e., adjusted for household size. 10 See Chauvel & Schröder (2014) for a recent attempt to do this for the working-age population (ages 25-60). The authors show that, among the cohorts born between 1935 and 1975, those born around 1950 are better off
8 2000s can serve as a first approximation. As an example, the young adults from 18 to 25 have lost ground in most countries over these two decades. It is not clear, however, how much of this is due to the expansion of higher education and the ensuing later transition into the labor force, and how much to the changing conditions in the labor market itself. In terms of the latter, there are different cohort processes at play which may have contrasting effects. One is the rise in mean educational attainment for each younger cohort, the other, the rising precariousness of jobs and difficulty of entry into stable careers, particularly in countries with high youth unemployment.
A similar cohort argument applies to the ‘young olds’ (ages 66-75), which have seen their relative position increase in some countries but decrease in others. Their pensions may have benefited from higher labor incomes but suffered from the beginning process of pension retrenchment of public old-age security schemes. Indeed, the incomes of the elderly grew from the mid-1980s to the mid-1990s; however, this trend was reversed after the mid-1990s when pension retrenchment set in.
Another aspect of economic well-being is inequality within age groups and cohorts. One way to represent it is by the poverty rates, measured here as the proportion below 50 per cent of the median equivalised income. Comparing relative poverty between age groups and cohorts highlights the differential risk of being economically marginalized in different life stages or generational locations. For the total population, the poverty rate in the mid-2000s varied between 5 percent in Sweden and 17 percent in the US. In most countries both children and the elderly had higher poverty rates than the population of working age. In the majority of countries the elderly – especially those above 75 – were worse off than the children and adolescents (below 18); in Germany, Hungary and Italy the opposite held. 21 percent of children and adolescents and 27 percent of those over 75 in the US lived in relative poverty, as against four and ten percent, respectively, of the Swedish population.
This clearly shows that the welfare state makes a difference. It has succeeded in smoothing life time consumption chances, and thus in keeping economic divisions between age groups at bay, but differentially so in different countries. The stylized picture presented here shows a massive variation of relative poverty rates among nations and welfare regimes, and especially between the two welfare regimes at opposite ends, the ‘liberal’ (Anglo-Saxon) versus the than previous and later ones in most countries, and that the cohort differences are larger in the ‘conservative’ – especially the Mediterranean – welfare states.
9 ‘social-democratic’ (Scandinavian) regime. Children and the elderly fare much worse than the active population in the liberal regime but less so in the social-democratic regime. The ‘conservative’ regime of continental Western Europe and the ‘familistic’ regime of the Mediterranean countries are situated somewhere in-between.
As to change since the mid-1980s or mid-1990s, the poverty rates of children and adolescents have risen in most countries (Australia and the US being the exceptions), while the picture for the elderly is more uneven. In a longer perspective since 1970, relative poverty has remained stable or increased among children. It decreased among the elderly after the 1970s, but this trend has stopped in the mid-1990s; one can again detect some effects of recent pension retrenchments here (Liebig et al., 2004). Equality of economic resources is now under pressure both from the primary distribution of income on the labor market and from its redistribution through the welfare state. Increasing labor market inequality as well as welfare state retrenchment may come to deepen these economic cleavages even further.
This empirical picture suggests some policy consequences: to support children (and their parents) in order to bring their relative income up and their relative poverty rate down, so that their future life chances not be compromised. This is moreover essential for reducing inequalities among children by social origin. Given the accumulating evidence on the higher effectiveness of investing in early childhood as compared to later ages (Heckman, 2006; Lutz & KC, 2011), one may also argue that public investments should be targeted accordingly. The pro-elderly bias of public spending – especially pronounced in Southern European and some Eastern European countries – may be seen to threaten this goal (Vanhuysse, 2013). On the other hand, there is no reason to strip the elderly of their benefits considering that with their relative income situation they are even worse off than children. We may decide to invest more in children in view of the human capital of future cohorts of adults, but doing so at the expense of current cohorts of elderly people would violate the criteria of intergenerational equity.11
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It should be noted that – contrary to what the proponents of generational equity claim – investing in children and in the elderly is not a zero-sum game. At the aggregate level, there is a strong positive correlation between the two: countries that spend more on their elderly also tend to spend more on their children (Börsch-Supan, 2007).
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4. Towards generational mobilization?
What are the risks (or chances) that these economic divisions lead to a political mobilization along generational lines? For the time being they seem small. A mobilization would have to overcome two major difficulties. The first is that the temporal boundaries of societal (historical) generations or cohorts are inherently fuzzy; there is usually no clear criterion for when generations begin and when they end, and delimiting them is thus the result of an arbitrary decision by academic or political observers. This fuzziness does not facilitate the perception of a common destiny. The second difficulty is that generations are internally differentiated with regard to class, religion, ethnicity or gender, which undermines any attempt to establish a feeling of ‘being in the same boat’.
There is a range of historical examples where these difficulties have been overcome. Many major revolutions have been driven by youth movements. This has been the case for the French revolution of 1789 just as for the Bolshevik revolution of 1917, for the Fascist revolution in Italy just as for the National-Socialist revolution in Germany. Most of the leading cadres of the NSDAP, for example, were in their early or mid-thirties in 1933, and in their mid-forties when the ‘Thousand Years Empire’ came to its end twelve years later. The Italian Fascists in their anthem celebrated youth as the ‘Spring of beauty’ (‘Giovinezza, giovinezza, primavera di bellezza...’), and attempted to mobilize the young as the vanguard of cultural and political change, necessarily at war with the adult world (Wohl, 1979). The problem of internal differentiation was effectively countered by generational elites that succeeded in presenting themselves as carrier groups for the other social strata as well. In the past years the ‘Arab Spring’ has presented other examples for political mobilization along generational lines.
In current Western societies, however, the salience of age/generation conflicts is low – surprisingly so if one listens to the tone of the generational equity debate. There are four political outcomes that may be discussed as indicators of the potential for generational mobilization. The first is given by the divisions among age groups and/or cohorts in terms of political attitudes, for example, those concerning welfare state redistribution (e.g., Busemeyer et al., 2009; Hicks, 2001; Svallfors, 2008). A good comparative assessment of age-specific attitudes towards social policy issues is provided by the International Social Survey Program
11 (ISSP) with its special modules on Role of Government in 1996 and 2006 (for the latter see Figures 1-3). A standard question is whether one would like to see (much) more or (much) less or unchanged government spending on welfare domains such as pensions or education. Respondents are reminded that if they opt for “much more” this might require a tax increase to pay for it. Results are twofold: (1) Large majorities of all age groups are in favor of more or much more government spending – as opposed to less or much less – on pensions as well as on education (Figures 1 and 2). Contrasting retired people over 60 with all non-retired people, the net support – those opting for (much) more minus those opting for (much) less spending – is largely positive for both groups across both policy domains in all countries. (2) For pensions, the retired show somewhat more net support than the non-retired, while for education there is a modest difference in the opposite direction. There is thus a modest age (or cohort) effect in attitudes, but both pensions and education remain popular among all age groups. As to country differences, the largest support for spending (much) more on pensions – with more than 70 % in both groups – is found in the UK and Ireland where the public pension level is especially low. There is no country in which those opting for (much) less spending make up more than 10 % for pensions and more than 11 % for education. Lest we should think that popular opinion is always in favor of spending more on welfare programs, there is a counterexample: support for spending on unemployment insurance is much lower, and many countries show a net negative attitude (Figure 3).12
A second indicator is voting preference (e.g., Goerres, 2009; Campbell & Binstock, 2011). In the ten last US presidential elections, “all age groups except the youngest (ages 18-29) distributed their votes among candidates in roughly the same proportions” (Campbell & Binstock, 2011:268). Age differences have thus been negligible. Much more important are period effects, which either favor the Democrats or the Republicans and which have a strong impact on the young generations because first-time voters are especially sensitive to period effects and, as a cohort, tend to retain their original voting decision for the rest of their life course. In his comparative analysis of party choice in Britain and West Germany, Goerres (2009: 94) also found “almost no evidence for a life-cycle [age] effect in voting patterns”, e.g., in terms of economic or status quo conservatism. Generational differences are again the dominant sources of the observed differences between age groups, but even these have 12
There are also survey results on more specific policy options, such as how to construct the public pension program. A Eurobarometer survey of 2001 demonstrated that increasing the age of retirement was highly unpopular – again across all age groups (Kohl, 2003). It comes therefore as no surprise that policies to increase the retirement limit of pension schemes have met with strong public protest in several countries.
12 become less important over time. The current economic and social crisis in some countries may, however, herald a change in this pattern. A case in point is Italy where in the 2013 parliamentary election there were for the first time some signs of a ‘youth vote’, with almost half of those aged 18-24 voting for the new protest party headed by Grillo, compared to onefourth overall (Albertini et al., 2013).
A third indicator is provided by voting on specific policy measures, such as in Switzerland or in the U.S (which has frequent issue voting at the state and municipal level). For Switzerland, Bonoli & Häusermann (2009) show that there are some age effects when comparing national votes on ‘young’ issues such as education or maternity benefits with ‘old’ issues such as pensions. In the U.S., municipal referenda on education usually show no age effect as such but some effect of having school children resident in one’s home (Binstock, personal communication).
The fourth indicator is political participation (Campbell & Binstock, 2011; Goerres, 2009). The elderly have an increasing weight in elections and referenda not only because of their increasing demographic share, but also because they have a higher voting participation rate than the young. A similar pattern emerges for party membership (Kohli et al., 1999). The ageing of party members and party elites is uneven. In Germany, e.g., the Greens have long been a one-generation party which has aged with its core generation. Their elites are now approaching retirement. The post-socialist PDS has been mostly a party of retirees, but since the formation of the Left Party there has been some infusion of younger members as well. All parties except the Greens are faced with a higher membership among retirees than among the active population.
But party membership does not necessarily translate into political power. In the German case there exists a paradox of representation (Kohli et al., 1999): The elderly have a much lower representation in parliament and government than their population and party membership share, and since the 1960s – a period of sustained population aging – the mean age of the members of the Federal Parliament has even decreased somewhat. Non-traditional political participation (such as in demonstrations or civic movements) among the young partly makes up for their lower voting participation and party membership. Among the elderly it is still low but growing, and we may assume that these new forms of old-age activism will gain in importance with the aging of the 68ers.
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Some proponents of generational equity argue that the window of opportunity for implementing reforms of the welfare state is closing because the older population increasingly dominates the political arena by its sheer voting weight. In a model for Germany, HansJürgen Sinn and Silke Uebelmesser (2002:155) predicted a point of no return when the power of the elderly would be such that they would be able to block any attempt at reducing their benefits. took into account both demography and age-specific voting participation. The authors projected the median age of voters and the ‘indifference age’ where one is affected neither positively nor negatively by a pension reform. Above this threshold people are more likely to profit from improvements in old-age security, below it they are more likely to have a negative pay-off with the costs outweighing the benefits. The assumption was that reform would be feasible only if the median voter favors it. The authors concluded that until 2016 a reform could still be democratically enforced because the median voter age would still be below the indifference age. In the authors’ view, 2016 would be ‘Germany’s last chance’; after that year it would be a gerontocracy, with no possibility of cutting old-age benefits anymore because the majority would be above the indifference age, and would thus vote for retaining or even expanding them. However, such a simple model of self-interest is far from reality. It presupposes that peoples’ votes are based only on their current individual interest position, that what matters to them in terms of interest is only pensions, and that voting shares fully translate into specific policies – all three of which are manifestly not the case (Kohli, 2006:466). A simple rational choice model which assumes that voters maximize their own perceived current interests does not provide a valid account of the act of voting, and the latter usually does not impact on a single political issue. As Tepe & Vanhuysse (2009) show, the policy results at the macro level disprove the gerontocracy model: While population aging since 1980 has increased overall pension macro-spending, it has also led to freezes or cutbacks in the generosity of individual pension benefits.
Given the divisions discussed above, why are age and generational conflicts in politics not more pronounced? One reason lies in the mediating function of political organizations such as parties and unions (Kohli et al., 1999). In the corporatist pattern of Germany, these organizations have created special groups for the elderly, just as for other long-neglected population categories such as women and the young. These special groups were set up as a form of internalized interest groups that would mobilize these population categories for the goals of the overarching organization. The groups moreover offer possibilities for
14 participation for elderly political cadres beyond the main organizational hierarchies. Those, e.g., who leave the Federal parliament having to hand over their mandates to younger colleagues can then take over functions in the ‘senior groups’. The idea is to appropriate the demands of these population categories by giving them a special organizational niche, thereby hoping that they will neither mobilize outside the party nor interfere with its core business. This is even more the case for the trade unions, where the dilemma is heightened by the fact that unions’ avowed purpose is focused on the working population. But unions also depend on their retired members for support and as a signal to their active members, and therefore offer them special groups for organizing within the union but again detached from its core business (Wolf et al., 1994).
The shifting generational agenda is mirrored by the weight of these special groups. In the German CDU/CSU, for example, the past years have seen a shift from privileging the young to aiming for a balance between the generations. In the build-up to the 2009 federal election, the heads of the Junge Union and Senioren-Union were therefore called upon to cooperate on an agenda of generational integration.
To the extent that these special groups are successful, age conflicts remain within the organizational fold of the parties and unions and do not manifest themselves on the open political market. The exceptions are the ‘grey’ parties, which have had some electoral success in some countries, e.g., in the Netherlands or Slovenia. But as with most one-issue parties, their success has usually been short-lived because other parties took up their issue or because they self-destructed over their own internal divisions. In Germany the only successful oneissue party so far has been the Greens, who have persisted by broadening their agenda.
A second reason for the low salience of age and generational conflicts is family relations and transfers. Classical sociological authors such as Emile Durkheim and Talcott Parsons assumed that societal modernization would inevitably entail families to shrink to the nuclear household and to lose their intergenerational depth, but this assumption has been thoroughly falsified (see Kohli, 1999). Today, families are the prototypical institutions of age integration. An example is given by Peter Uhlenberg’s (2009) analysis of data from the U.S. General Social Survey that asked adult respondents to identify up to five other adults with whom they had discussed important personal matters over the past six months. The results were clear: the discussion partners were either age peers or family members. No one under age 30 identified
15 any non-kin over 70 as a close discussion partner, and vice-versa. In other words, no members of distant generations and ages were mentioned except within the family.
These results are corroborated by data on emotional closeness between adult family generations across Europe (Kohli et al., 2010). The other side of the coin is a surprisingly low prevalence of intergenerational family conflicts (Szydlik, 2002). The evidence on financial and social support is even more telling. All studies show that in terms of inter vivos financial transfers elderly parents are usually net givers. Parental altruism in terms of an orientation towards the special needs of their children is strong, even though there may also be expectations of reciprocity. Inheritance is another major concern of the elderly, as even those with modest means usually want to leave something to their children.13
At the European level, this has been demonstrated by studies based on the Survey of Health, Ageing and Retirement in Europe (SHARE). It provides information, for a range of European countries, on those aged 50 or more who have given or received financial transfers (above the threshold of 250€) or social support across family generations over the past twelve months before the interview.14 That these elderly Europeans are net givers emerges clearly: In all countries they have given financial transfers much more frequently than they have received them. The same applies for social support, defined here as personal care, practical household help, help with paperwork, and grand-parenting. Looking after grand-children (without the presence of the parents) is included here as social support because it helps young parents (especially mothers) to reconcile parenthood and employment. This can be critical for the mother’s participation on the labor market, and thus for the decision to have children in the first place.
Figure 4 shows the variation among welfare regimes in the amounts of intergenerational support. This balance of giving and receiving combines financial transfers and social support; 13
There is a systematic difference between the generations here: parents have a stake in continuation by transferring their social, material and cultural capital to their children, while children have a stake in becoming autonomous. Both family sociology and evolutionary theory concur on this (Giarrusso et al., 1994; Low, 1998). It is often argued that this is a recent development. In the family of the 19th century, before the full onset of industrialization – so the usual argument goes – the elderly were supported by their children, and children were seen as insurance for old age. But this is less evident than it seems at first sight. A revisionist social history of generations now claims that parents have always given more to their children than vice-versa (e.g., Ehmer, 2000). 14 See Albertini et al. (2007) and Kohli et al. (2010) for a more detailed analysis. Figures 4 and 5 are based on SHARE Wave 1 (2004)., The SHARE data set is introduced in Börsch-Supan et al. (2005); methodological details are reported in Börsch-Supan and Jürges (2005).
16 each hour of social support has been calculated at a wage rate of 7.50 €. The overall picture confirms the evidence presented so far: Up to age 80 people are net givers; it is only after this age (and only in the Continental and Southern European countries) that they become net recipients.
The countries differ also in terms of parental transfer strategies (Figure 5). Co-residence of adult generations in the same household has become rare in the Continental and Nordic countries,15 but is still frequent in the Mediterranean regime where much intergenerational support occurs in the form of co-residence. Although it is difficult to precisely pin down the extent and direction of transfer flows within a household, there is indirect evidence that here as well parents are net givers. Conversely, parents give little financial support beyond the boundaries of the household in the Mediterranean regime, while this is the preferred support strategy in the Nordic regime. In a life-course perspective, the differences between North and South manifest themselves also in the age at which children leave the parental home (Figure 6). The Mediterranean countries are characterized by very late exit, which means that the highest rates of co-residence in the SHARE sample are found among the 50- to 60-year-old parents; but there are also very clear differences among the regimes for the over 80-year-olds. Only 2 % of the Swedes and 3 % of the Danes of that age live with an adult child in the same household, compared to 22 % of Italians and 32 % of Spaniards. The Nordic regime is thus much more individualized. While the Nordic countries offer good community services for the elderly and an extended sector of old-age homes, both of these are rare in Italy or Spain where everything depends on the family. Outside help is organized by the family as well, especially through the low-wage care work of immigrant women (Bettio et al., 2006). Figure 6 moreover shows that in the South, the home-leaving age has risen again for more recent female birth cohorts. This reflects not only the expansion of higher education coupled with the nearabsence of public support for students’ costs of living, but also the role of the family as a safety net in times of an increasingly difficult access to the labor market.
There are thus different regimes across Western societies with regard to links between adult family generations, but they all share a pattern of emotional and geographical closeness and of
15
This should not be interpreted to mean that there is complete residential separation between adult family generations. Among the full sample of Europeans above age 80 who have at least one living child, only 18 % live together with a child in the same household. But by extending the boundaries of ‘togetherness’ the situation turns out to be very different. If one includes parents and children living not only in the same household but also in the same house, the proportion rises from 18 to 29 %, and by including the neighbourhood less than 1 km away, to 49 %. 83 % have a child living not farther away than 25 km (Kohli et al., 2010:231).
17 strong financial and social support that flows mostly downward, from parents to their adult children. While we lack direct evidence, it seems fair to assume that this pattern contributes to the (so far) low urgency of generational conflicts in the minds of most people of all ages.
5. The come-back of class
Is class conflict really defunct? Thirty years ago, many scholars would have responded in the affirmative. The dominant discourse in the social sciences was indeed one of the end of class. Today, this discourse has in its turn become obsolete. It is widely acknowledged that class inequalities with regard to income and wealth within Western societies have considerably risen again, and there is increasing public attention to them, to the point that they are now broadly viewed as a major threat to social cohesion. It may be asked whether children or the elderly will be hurt more by this development. While labor market precarity leads to new poverty risks for young families, pension retrenchment leads to new poverty risks for the elderly, and people with precarious work careers will be especially at risk in old age.
Advantages and disadvantages accumulate over the life course (Dannefer, 2003; O’Rand, 2006). Differences among individuals thus grow stronger with age, and this is true for differences among social groups as well. Some of this is compensated through the intragenerational redistribution operated by public pension systems, but this effect is limited: Bismarckian systems link pension benefits to previous work incomes, and Beveridgean systems have low public pensions, with class inequalities being produced through occupational and private pension savings. As a consequence, a growing elderly population is likely to deepen class inequalities because important life course outcomes are socially stratified – income and wealth, morbidity and mortality, functional capacity as well as social participation and embeddedness. The class divide matters more in old age than at any other time of life, and it is amplified by welfare state retrenchment.
The mortality divide merits some further attention. Evidence on the social stratification of mortality has been slow to come but is now available for an increasing number of countries. For the U.S., a study for the year 2010 (Olshansky et al., 2012, see Table 1) shows that, among white men with less than 12 years of education, remaining life expectancy at age 65 is 14.8 years, while among those with more than 16 years of education it is 19.7 years – fully
18 one third higher. For white women, the respective numbers are 17.7 and 21.7 years. A study of German men based on the records of the pension system for the year 2003 provides similar results (Shkolnikov et al., 2007). What is more, this longevity gap seems to be growing. For the top half of U.S. earners, life expectancy at current normal age of retirement (67) is projected to increase by 11 years from the 1912 to the 1973 birth cohort (if the current trend persists), but for the bottom half it will remain unchanged (Baker & Rosnick, 2010).
This is especially worrisome in view of the wide-spread attempts to raise the public retirement age (Marin, 2013). Later retirement seems to be a good way to meet the challenges faced by current pension finances. Raising the age of exit from the work force and entry into the pension system has an impact on both sides: it increases the number of workers and decreases the number of pensioners. A 2010 Green Paper of the European Commission provides a graphic illustration of this impact. Assuming a mean age of 60 for the transition from work to retirement, the old-age dependency ratio (the number of persons in retirement age per person of working age) of 0.4 in 2010 in the EU-27 is projected to double by 2060 to 0.8. If over these 50 years the mean age for the transition will be raised by ten years, to 70, the old-age dependency rate will remain stable at 0.4.16
Later retirement would thus be highly effective. But it is also highly problematic. To begin with, it is thoroughly unpopular. It also creates additional poverty risks for those who are unable to remain in the labor force until the statutory pension age, be it for reasons of health, unemployment, or lack of skills. Moreover it creates a double burden for those (mostly women) who do unpaid care work for disabled family members or for grandchildren. And finally, it is inequitable in terms of differential longevity.
At equal retirement ages, people in the lower part of the stratification hierarchy enjoy their pension benefits for a considerably shorter period than those in the upper part. In other words, a pension system with undifferentiated age of access is regressive: it redistributes benefits from the bottom to the top. This also means that raising the retirement age indiscriminately would punish those at the bottom more than those at the top because it makes them lose a relatively larger part of their expected benefits or ‘pension wealth’ (Rosnick & Baker, 2012). 16
It should be noted that this is a simplified picture that takes into account only pure demography. The question then arises what proportion of the population of “working age” participates in fact in paid work. In this respect there is still a considerable “underuse” in terms of unemployment, women remaining outside the labor force, and elderly workers exiting before the statutory retirement age. Using this potential would mitigate the effect of population aging to a considerable extent.
19
The perception that later retirement is unfair in this respect may be a key factor in the public opposition to it. As Paul Krugman (2013) has noted, one argument for cutting Social Security in the U.S. is “that we should raise the retirement age (…) because people are living longer. This sounds plausible until you look at exactly who is living longer.” He goes on to ask whether we should not let janitors retire because lawyers are living longer. The new pension rules introduced by the German “grand coalition” of Christian Democrats and Social Democrats in early 2014, allowing workers with at least 45 contribution years to retire at 63 with a full pension, could be seen as an attempt to create a social differentiation of retirement ages along these lines. It seems, however, that they do not benefit those most in need but rather the male worker elite – a case of good intentions but problematic outcomes.
What should the policy agenda be in order to account for the issues discussed so far? Increasing the labor force participation of all groups at all ages up to the statutory retirement is now a broadly accepted proposition, while raising the retirement age beyond that threshold remains contentious and problematic. For both measures, however, a set of conditions needs to be met to make them effective and equitable, both in terms of individual preconditions and of policies to improve them. First on the list is elderly workers’ health and labor market access. In policy terms this requires health prevention, some measure of job security, and investment in life-long education and qualification. Pension rules need also provide security for those who for reasons of poor health or labor market position are nevertheless unable to work until the statutory retirement age, as well as for those who have been unable to assemble a sufficient contribution record due to precarious and/or interrupted work careers. Next comes accounting for competing obligations and activities, especially care work, along the lines of work-family reconciliation policies in earlier phases of the life course. And finally, pension rules should account for the inequality of remaining life expectancy.
This is a tall agenda, and several of these issues are only now being perceived and tackled by appropriate policies. What is already clear at this stage is that the agenda requires measures that are finely tuned to the existing social policy framework, so that there can be no one-sizefits-all solution. It is also clear that these measures need to be closely evaluated. The social sciences will be challenged into a better and more continuous assessment of policy outcomes.
20
6. Cleavages: Generations or class?
The generational divisions outlined in this chapter are sizable, and the current structural trends – demographic discontinuity, economic insecurity and welfare state retrenchment – are likely to deepen them. There is thus a considerable and increasing potential for generational mobilization. Nevertheless, the likelihood of a ‘war between the generations’ – be it in the form of a gerontocracy or of a youth revolution – for the time being is low. Generational mobilization is inherently difficult. Support for the public generational contract is still broad among all age groups. The age-integrative effects of family solidarity are strong, and political organizations also play a key mediating role.
Class divisions are on the rise, but at the same time, class mobilization seems to fade away. Class mobilization is still institutionalized in the systems of industrial relations as well as in most party systems. However, industrial relations are today characterized by weakening union power and weakening corporatist arrangements. Stable party attachments and traditional leftright cleavages in the political realm are weakening as well.
Will the increasing salience of class inequalities in aging societies change this picture? While class divisions take on added significance among the elderly, class mobilization is even more difficult among them because they have left the institutions of the world of work. However, as new cohorts with a stronger lifetime record of political activism grow up and enter old age, they will be more likely to remain active, especially if a large part of them will feel disadvantaged by the cutbacks in public pensions. Moreover, there may be new parties and social movements that take these issues on board. Instead of cancelling each other out, class and generational divisions may thus come to interact and create new cleavage lines.
21
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24 Kohli, Martin / Neckel, Sighard / Wolf, Jürgen (1999): Krieg der Generationen? Die politische Macht der Älteren. In: Niederfranke, Annette / Naegele, Gerhard / Frahm, Eckart (Eds.): Funkkolleg Altern, Bd. 2. Opladen: Westdeutscher Verlag, 479-514. Kotlikoff, Lawrence J. / Burns, S. (2004): The coming generational storm. Cambridge: MIT Press. Krugman, Paul (2013): Expanding Social Security. New York Times 23/11/2013. Lazenby, Hugh (2011): Is age special? Justice, complete lives and the prudential lifespan account. Journal of Applied Philosophy 28(4):327-40. Lee, Ronald / Mason, Andrew (Eds.) (2011): Population Aging and the Generational Economy: A Global Perspective. Cheltenham, UK: Edward Elgar. Liebig, Stefan / Lengfeld, Holger / Mau, Steffen (2004): Einleitung: Gesellschaftliche Verteilungsprobleme und der Beitrag der soziologischen Gerechtigkeitsforschung. In: Liebig, Stefan / Lengfeld, Holger / Mau, Steffen (Eds.): Verteilungsprobleme und Gerechtigkeit in modernen Gesellschaften. Frankfurt/M: Campus, 7-26. Low, Bobbi S. (1998): The Evolution of Human Life Histories. In: Crawford, Charles / Krebs, Dennis L. (Eds.): Handbook of Evolutionary Psychology: Ideas, Issues, and Applications. Mahwah, NJ: Erlbaum, 131–161. Lutz, Wolfgang / KC, Samir (2011): Global human capital: Integrating education and population. Science, 333, 587- 592. Mannheim, Karl (1928): Das Problem der Generationen. Kölner Vierteljahrshefte für Soziologie, 7, 157-185, 309-30. Marin, Bernd (2013): Welfare in an idle society? Reinventing retirement, work, wealth, health, and welfare. Farnham: Ashgate. Mayer, Karl Ulrich (2001): The Paradox of Global Social Change and National Path Dependencies: Life Course Patterns in Advanced Societies. In: Woodward, Alison / Kohli, Martin (Eds.): Inclusions and Exclusions in European Societies. London: Routledge, 89-110. Mirowsky, John / Ross, Catherine E. (1999): Economic Hardship Across the Life Course. American Sociological Review, 64, 548–69. OECD (2013): Income Distribution. OECD Social and Welfare Statistics (database). DOI: http://dx.doi.org.ezproxy.eui.eu/10.1787/data-00654-en (Accessed on 08 April 2015) http://stats.oecd.org.ezproxy.eui.eu/BrandedView.aspx?oecd_bv_id=socwel-dataen&doi=data-00654-en Olshansky, S. Jay et al. (2012) Differences in Life Expectancy Due to Race and Educational Differences are Widening, and Many May Not Catch Up. Health Affairs, 31, 1803-13 O'Rand, Angela (2006): Stratification and the life course: Life course capital, life course risks, and social inequality. In: Binstock, Robert H. / George, Linda K. (Eds.): Handbook of Aging and the Social Sciences (6th ed.). San Diego: Elsevier, 145-62.
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Rosnick, David / Baker, Dean (2012): The impact on inequality of raising the Social Security retirement age. Washington, DC: Center for Economic Policy Research. Scharpf, Fritz W. / Schmidt, Vivien A. (Eds.) (2000): Welfare and work in the open economy: From vulnerability to competitiveness. New York: Oxford University Press. Shkolnikov, Vladimir M. / Scholz, Rembrandt / Jdanov, Dmitri A. / Stegmann, Michael / von Gaudecker, Hans-Martin (2007) Length of life and the pensions of five million retired German men. European Journal of Public Health, 18, 264-69. Sinn, Hans-Werner / Uebelmesser, Silke (2002): Pensions and the Path to Gerontocracy in Germany. European Journal of Political Economy, 19, 153-158. Svallfors, Stefan (2008): The Generational Contract in Sweden: Age-Specific Attitudes to Age-Related Policies. Policy & Politics, 36, 381-396. Szydlik, Marc (2002): Wenn sich Generationen auseinanderleben. ZSE – Zeitschrift für Soziologie der Erziehung und Sozialisation, 22, 362-373. Teitelbaum, Michael S. / Winter, Jay M. (1985): The Fear of Population Decline. Orlando: Academic Press. Tepe, Markus / Vanhuysse, Pieter (2009): Are Aging OECD Welfare States on the Path to Gerontocracy? Journal of Public Policy 29, 1-28. Thomson, David (1989): Selfish Generations: The Ageing of the Welfare State. Wellington: Allen & Unwin. Uhlenberg, Peter (2009): Children in an Aging Society. Journal of Gerontology: Social Sciences, 64B, 489-496. Vanhuysse, Pieter (2013): Intergenerational justice in aging societies: A cross-national comparison of 29 OECD countries. Gütersloh: Bertelsmann Stiftung. Vukov, Visnja (2010): The rise of the competition state? Transnationalization and state policy in Eastern Europe. PhD dissertation, Florence: European University Institute. Williamson, John B. / Watts-Roy, Diane M. (1999): Framing the generational equity debate. In: Williamson, John B. / Watts-Roy, Diane M. / Kingson, Eric R. (Eds.): The generational equity debate. New York: Columbia University Press, 3-37. Wohl, Robert (1979): The Generation of 1914. Cambridge, MA: Harvard University Press. Wolf, Jürgen / Kohli, Martin / Künemund, Harald (Eds.) (1994): Alter und gewerkschaftliche Politik: Auf dem Weg zur Rentnergewerkschaft? Köln: Bund-Verlag.
26
Figure 1: Attitudes towards government spending on pensions
France USA Switzerland Germany Canada Australia New Zealand Japan Denmark Sweden Norway UK Finland Spain Portugal Ireland
retired not retired
0
20
40
60
80
100
Net public opinion, percent Note: Answers to the question “Listed below are various areas of government spending. Please show whether you would like to see more or less government spending in each area. Remember that if you say ‘much more’, it might require a tax increase to pay for it.” Percentages are those answering ‘more’ or ‘much more’ minus those answering ‘less’ or ‘much less’. Data source: International Social Survey Program (2006), own calculations
27 Figure 2: Attitudes towards government spending on education
Finland Japan France Sweden Denmark Canada Norway New Zealand Switzerland UK Australia Portugal Germany USA Spain Ireland
retired not retired
0
20
40
60
80
100
Net public opinion, percent Note: Answers to the question “Listed below are various areas of government spending. Please show whether you would like to see more or less government spending in each area. Remember that if you say ‘much more’, it might require a tax increase to pay for it.” Percentages are those answering ‘more’ or ‘much more’ minus those answering ‘less’ or ‘much less’. Data source: International Social Survey Program (2006), own calculations
28
Figure 3: Attitudes towards government spending on unemployment
New Zealand France Australia UK Sweden Denmark Norway Japan Switzerland Canada Germany USA Finland Portugal Spain Ireland
retired not retired
-60
-40
-20
0
20
40
60
Net public opinion, percent Note: Answers to the question “Listed below are various areas of government spending. Please show whether you would like to see more or less government spending in each area. Remember that if you say ‘much more’, it might require a tax increase to pay for it.” Percentages are those answering ‘more’ or ‘much more’ minus those answering ‘less’ or ‘much less’. Data source: International Social Survey Program (2006), own calculations
80
29 Figure 4: Balance of financial transfers and social support among adult family generations by age group and welfare regime 5.000 € 4.000 € 3.000 € 2.000 € 1.000 € 0€ -1.000 € -2.000 € Northern 50-59
60-69
Central 70-79
Southern 80+
Note: Respondents aged 50+ giving to and receiving from their non-co-residing children aged 18+; hours of social support converted into monetary units by a wage rate of 7,50 € Data source: SHARE 2004, release 2.0.1, own calculations
30
Figure 5: Transfer strategies by welfare regimes: Parent-child co-residence vs. monetary support
% parent-adult child co-residence
% given transfer to non-coresiding child
Nordic
4.7
21.0
Continental
11.3
15.5
Southern
30.7
8.2
Note: Respondents aged 50+ co-residing with or giving to a non-co-residing child aged 18+ From: Albertini & Kohli (2012) Data source: SHARE 2004 release 2.0.1, own calculations
31 Figure 6: Median age at leaving home for female birth cohorts 28 27 26 25 IT ES PT DE GB NO
Median age
24 23 22 21 20 19 18 1930/1939
1940/1949
From: Billari & Liefbroer (2010:65) Source: European Social Survey 2006
1950/1959
1960/1969
1970/1979
32 Table 1: U.S. life expectancy differentials at age 65 (2010)
Sex/Education
Whites
Blacks
Hispanics
Women,
