Pension Systems
The Political Future of Social Security in Aging Societies
Vincenzo Galasso
The MIT Press
Winner of the "Outstanding Academic Title" award, as featured in Choice Magazine January 2007 issue
Read about this book:
Rivista di politica economica (marzo-aprile 2007)
Journal of Economic Literature, V 174 ol. XLVI (March 2008)
Description:
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.
Endorsements:
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 Liège
"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