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Corresponding Author:
Luca Beltrametti, Department of Economics, University of Genoa, Italy

Coauthors:
Gianluca Cerruti, Department of Economics, University of Genoa, Italy

A Note on the Weak Political Support to Pension Reforms

Volume 75 - Issue 4 - Papers in memoriam of Amedeo Amato, November 2022
(pp. 429-446)
JEL classification: H55; H75; J32; J26
Keywords: Pension Reforms; Fairness; Sustainability; Political Support; Pay As You Go (PAYG); Defined Benefits (DB); Defined Contribution (DC)

Abstract

In the last decades, many advanced countries have implemented reforms that share the goal of making pension systems more sustainable, efficient and fair. These reforms have been spurred, first and foremost, by the aging of populations and the reduction in their growth rates, challenges that have become particularly compelling in the last decade, in the wake of the economic and financial crisis.

However, these reforms were not underpinned by strong political support and, after their implementation, many countries have partially reversed the course.

In this note, we investigate two possible interpretations of this lack of political support, either from a “political economy” perspective that analyzes the consequences of the aging of the median voter and by examining the shortcomings of the aforementioned reforms from the perspective of gender equality, the radical change in the allocation of risk from the State and firms against workers, and inequalities in life expectancy related to the socioeconomic conditions of individuals. The arguments are supported by data, both international and referred to the Italian context.

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Institute for International Economics of the Genoa Chamber of Commerce

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of the Genoa Chamber of Commerce