Social Security programs in post-industrial nations are facing the need for policy reforms. Fiscal shortfalls in current Social Security programs are a major driving force promoting these reforms. At the same time, changes in longevity and the nature of work and retirement also suggest the need for policy reform. This article begins with a broad overview of some of the policy innovations of the Europe Union as a whole, and then focuses more in-depth on policy reforms in three countries that exemplify Esping-Andersen's (1990) typology of welfare states: Sweden, Germany, and Canada. These three countries have passed policies that promote flexibility in retirement for older adults, including "gradual retirement", "partial retirement", and credit for caregiving activities. Keeping older adults in the labor force longer retains the tax base of contributors into Social Security as well as allowing those who want to stay in the labor force more choice. The reforms are discussed, along with their potential usefulness for future Social Security policy reforms in the United States.
Keywords: retirement, pension policies, pension reform
Both the demographic changes and the changing nature of our society and work emphasize the need to reshape our thinking about retirement. The word "retirement" used to refer to the abrupt and total transition from full-time employment to zero-employment, but the way that retirement is defined and experienced has been evolving in the United States and around the world. Now, "The concept of retirement is not easy to define--it could imply eligibility for benefits, withdrawal from the labor force, changes in lifestyle, changes in family or living situations, or some combination of these characteristics" (Wiatrowski, 2001, p. 3).
Increased longevity and population aging are global phenomena for developed and developing countries alike. Every month one million people turn 60 years of age (33,000 every day) and today ten percent of the earth's inhabitants are over the age of 60 (United Nations Population Fund, 1999). In addition, the widespread availability of better health care has improved the physical well-being of older adults (Research & Policy Committee, 1999; Steuerie, Spiro & Johnson, 1999). This paper will focus on the fiscal pressures on current Social Security systems in post-industrial nations resulting from the increase in longevity, the changing nature of work and retirement, and selected efforts to reform policies to promote flexibility.
In addition to demographic changes, the nature of work has become increasingly more technologically complex. In the 18th century, the United States and much of Europe had agricultural economies and the working classes were generally forced to work until they were completely disabled or deceased. In the 20th century, these countries became industrialized, and policies were established to provide for the economic needs of older adults (e.g., Social Security), which changed the nature of work and retirement. In the 21st century, the economies of developed countries have begun to move away from industry and toward an information-based economy that requires highly educated workers that are able to obtain and process information effectively. Informational jobs are generally less physically demanding, require continuous learning and skill acquisition, and offer greater options in terms of work hours and work location (international Labour Organization, 2000; Moore, 1996; Reday-Mulvey, 2000; Steuerie, Spiro & Johnson, 1999). Co-existing with the information-based industry are the retail and service industries, in which workers generally have jobs with less flexibility and more physical demands (Moore, 1996; Stewart, 2000). The Information Industry, and to some extent the retail and service industries, offer workers more work schedule and location flexibility than workers in industrial positions. …