A precarious welfare (2002)

Macroeconomic sustainability and infra and intergenerational redistributive effects are the most difficult variables to assess when analysing pension reform policies. It is not easy to reconcile equity and sustainability of the social security system in the light of demographic and employment trends that cannot ensure the necessary balance between contributions and benefits. Moreover, demographic decline and population ageing constitute an explosive combination that could undermine the intergenerational solidarity model due to unsustainable pension commitments in terms of cost and duration.

An additional factor is the rapid changes in the labour market and the so-called occupational nomadism of an increasing proportion of workers, who are obliged to constantly change production sectors and activities throughout their working lives. This will make it increasingly challenging to achieve regular and continuous working careers in social security contributions. In this sense, there is a clear need to rethink the traditional social security mechanisms and institutions if we want to ensure adequate coverage for the younger generations, avoiding that the increased flexibility in the labour market translates into a precariousness of rights or even their denial.


The future of welfare: is it still possible to balance equity and sustainability of the welfare system?

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