Generational Equity in the Welfare State: Germany in an International Comparison
GENERATIONAL EQUITY IN THE WELFARE STATE:
GERMANY IN AN INTERNATIONAL COMPARISON
Co-sponsored by United States Studies and West European Studies
June 8, 2009
Christoph Conrad, Visiting Scholar, Minda de Gunzberg Center for European Studies, Harvard University, and Professor of Contemporary History, University of Geneva, Switzerland; commentator Mitchell Orenstein, S. Richard Hirsch Associate Professor of European Studies, Johns Hopkins University School of Advanced International Studies
What does "generational equity" mean in the context of government-provided pension systems? Where does the concept come from? Can it serve as a useful guide for policy makers? Two distinguished scholars of social welfare institutions addressed these issues in a discussion focusing on contemporary German old-age policy in comparative perspective.
To put the issue in its historical context, speaker Christoph Conrad traced the "career" of generational equity as a concept in public discourse. Pressure groups in the United States introduced the concept in the mid-1980s, he said, as part of their attack on social insurance programs for the elderly, embodied most vividly in the image of the "greedy geezer." Such rhetoric soon diffused to Germany, where it became especially prominent in the early twenty-first century. Part of its success derived from its congruence with arguments for sustainability made by environmental activists, Conrad added.
While generational equity did not make sense in terms of the transfer of resources from one age group to another, Conrad said, it was useful as a means of comparing the costs and benefits that the German government has conferred on different demographic cohorts. Like many developed nations during the twentieth century, Germany has experienced cycles of population expansion and retraction. Some inequality between generational cohorts may be inevitable, he said, but the government should make sure that its policies do not exacerbate these differences.
Commentator Mitchell Orenstein urged greater attention to causal explanations of changes in social insurance policies. He focused attention on a puzzle that Conrad had mentioned earlier, namely, how was it that radical reforms in old-age support had erupted after more than a century during which policies developed under Bismarck persisted more or less unchanged? Furthermore, reform, when it did occur, came from an unlikely source—the Social Democratic Prime Minister Gerhard Schroeder, whose constituency had important investments in maintaining the status quo. Why? Orenstein agreed with Conrad that demographic and fiscal considerations did not provide a full explanation for the timing or sources of reform. He suggested that international policy discourses, especially the rise of neoliberal ideology in the late twentieth century, might supply a promising avenue for future research, but that more specificity was required to determine causality.
Drafted by Michael Easterly.