Unequal Welfare States

Abstract

The financial sustainability of the ageing welfare states in Europe has
\nbecome a key policy issue recently. This study highlights a different aspect of
\nthe ageing process, namely its potential impact on income distributions. Since
\nolder people usually live on a lower income, their growing share in the
\npopulation could mean that income inequality and poverty rates will rise in the
\nyears ahead. To what extent this occurs, however, also depends on the future
\nshape of pension systems and other social security schemes.
\n
\nThe book seeks to provide an empirical assessment of the relevance of
\nwelfare institutions for income distributions over the coming decades. The main
\ncurrent European welfare state types are identified through an analysis of
\nquantifiable system characteristics. This is followed by an in-depth analysis
\nof future inequality, redistribution and poverty rates for six countries:
\nFrance, Germany, Italy, the United Kingdom, Denmark and the Netherlands.
\nTogether these countries represent not only the different 'welfare regimes',
\nbut also a large proportion of the population of the European Union.
\n
\nThe distributive forecasts are based on demographic projections and economic
\nmodelling of various policy strategies. The outcomes indicate a clear trade-off
\nbetween financial sustainability and distributive consequences. They also show
\nthat the policy reactions of the various governments will partly determine the
\nfinancial and social consequences of the ageing process.