The Political Future of Social Security in Aging Societies
Doubts about the ability of industrialized countries to continue to provide a sufficient level of retirement benefits to a growing number of retirees has fueled much recent debate and inspired a variety of recommendations for reform. Few major reforms, however, have actually been implemented. In The Political Future of Social Security in Aging Societies, Vincenzo Galasso argues that the success of any reform proposals depends on political factors rather than economic theory. He offers a comparative analysis of the future political sustainability of social security in six countries with rapidly aging populations—France, Germany, Italy, Spain, the United Kingdom, and the United States. Using a quantitative approach, he finds that an aging population has political as well as economic effects: an older electorate will put pressure on politicians and policy-makers to maintain or even increase benefits.
Galasso evaluates how each country's different political constraints shape its social security system, considering such country-specific factors as the proportion of retirees in the population, the redistributive feature of each system, and the existing retirement policy in each country. He concludes that an aging population will lead to more pension spending; yet postponing retirement mitigates the impact of this, and may be the only politically viable alternative for social security reform.
About the Author
Vincenzo Galasso is Associate Professor of Economics at Bocconi University. He is Research Affiliate at the Centre for Economic Policy Research (CEPR), Research Fellow at Innocenzo Gasparini Institute for Economic Research (IGIER), and Associate Editor of the European Journal of Political Economy.
"I recommend the book for anyone interested in social security.... Galasso's presentation is outstanding with regard to the countries' institutional features, the demographic trends, and the history of social security. These narrative sections are comprehensive, detailed, and insightful.", Henning Bohn, Journal of Economic History
"There is a large literature dealing with the expected evolution of pensions, relying mostly on demographic and economic forecasts. The originality of Vincenzo Galasso's book is to argue convincingly that the future of social security and the success of long-overdue reforms depend largely on political factors. He reminds us that a successful reform must be not only economically sound but politically sustainable. This book is essential for anyone concerned with social security, pensions, and the possibility of reform."
—Pierre Pestieau, University of Li'ge
"Vincenzo Galasso has written a penetrating and thoughtful book on a topic of undeniable importance. Most studies of the future of social security focus on the burden that changing demographics place on the fiscal viability of social security systems. Galasso's analysis carries the argument to the logical next step by studying the impact of a graying population on the political support for social security reforms."
—Thomas Cooley, Paganelli-Bull Professor of Economics, New York University
Choice Outstanding Academic Title, 2007.