The Future Of Retirement
Population aging has proceeded faster in other advanced societies than in the United States, although the aging of the post–World War II baby boom cohorts is increasing the U.S. rate dramatically at the turn of the twenty-first century. Early retirement in Europe was a response primarily to public institutions erected to control the age composition of the labor force, making room for younger workers (Kohli et al.). Since the 1980s, however, the fiscal burden of these regimes has motivated even the most advanced welfare states (e.g., Sweden, Germany, the Netherlands) to develop flexible extensions of disability and unemployment compensation policies to manage high unemployment among younger age groups and to introduce more privatized pension schemes, including defined contribution accounts following the U.S. model, in order to ameliorate the crisis of public pension financing (Esping-Andersen).
Some scholars anchor the crisis of the welfare state primarily in the changing family and economic stagnation following global restructuring. Esping-Andersen argues that the welfare state was constructed on three institutional foundations: family reciprocity, market distribution, and state redistribution. Family reciprocity refers to the nonmonetary exchange of goods and services in families on which welfare programs have been predicated. The existence of unpaid domestic work by family members, especially wives and children, has always been a presumption of welfare policies. Social Security policies in the United States, described earlier, exemplify this taken-for-granted aspect of welfare policies. Except in the most socially democratic states like Sweden, the breadwinner (single wage earner) model has linked the labor market and the family directly to welfare programs on the basis of the industrial nuclear family with a gendered division of labor (Ginn et al.).
However, the market has changed: the decline in wages or jobs for men’s and women’s increased labor force participation has changed economic roles in the family; structural forces have increased the demand for female labor and decreased the demand for male labor. The family, in turn, also has changed: declines in fertility, delays in marriage, the increase in divorce, childbearing out of wedlock, and geographic mobility away from families of origin have transformed the ‘‘family reciprocity’’ system. In the absence of the family’s capacity to absorb social risks related to the welfare of its members and of the labor market’s capacity to sustain full employment, the three-legged stool of the welfare state is collapsing and impelling changes in family and labor policies, including retirement policies.
Alan Walker has argued further, and cogently, that the future of retirement institutions is integrally connected with the health status of aging populations: ‘‘If the health of workers is maintained then they will be willing and able to extend their working lives’’ (p. 14). Recent trends in increased active life expectancy in the United States and other countries raise hopes along these lines. However, health status over the life course is also supported by the three-legged stool of the welfare state. Health disparities begin early in the life course and become accentuated with differential exposures to life course hazards and health maintenance systems. In the United States, where health and economic disparities are among the highest among advanced countries, the market dominates health care over the life course and is available primarily through employment. Those outside the insured employment system are disadvantaged and at risk of ill health (Landerman et al.). The price of formal care over the life course—from premature births through nursing home care at the end of life—is rapidly increasing. In a world of diminishing informal support, the future of health maintenance and productive aging is less hopeful.
Health insurance systems are confronting crises of financing similar to those facing pension systems. Responses to these crises are familiar: increased privatization and healthcare rationing. Privatization shifts the system to the market, where efficiency criteria operate against universal health delivery and equal opportunity.
In short, interdependent demographic, market, and state forces have produced highly diverse life courses in advanced societies, including variable retirement patterns. The United States perhaps has the most variable retirement patterns because of stronger market and weaker state policies. However, all countries face the challenges of population aging, global markets, increased inequality, and family transformation that will require new views of the life course and new institutions to reconstruct it.
ANGELA M. O’RAND
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