Population &

Policy Compact
Policy Brief No. 18
October 2018

Preventing Inequalities in
Ageing Societies

Key messages: Author:

Hervé Boulhol
Inequality in old age is a reflection of individuals’ paths over their Pieter Vanhuysse
entire life course.
Younger generations in Europe today are likely to face higher Editor:
inequality in old age due to less stable labour market conditions and Daniela Vono de Vilhena
widening inequalities in the distribution of earnings and household
income.
The reduction of inequalities inside societies must be tackled by
measures addressing both intra-generational and intergenerational
inequalities.
In order to equalise life chances, state transfers for high quality
education and care for children (especially from disadvantaged
backgrounds) should increase substantially.
A well-designed policy package to combat inequalities should be
based on three pillars: Prevent inequality at early ages, mitigate
inequality among youth and adults, and tackle inequality at older
ages.

www.population-europe.eu
 Demographic Is
Introduction: Change
there and
a rising
Housing
risk of Julius Op de Beke (Socio-Economic Policy Analyst, DG
more unequal ageing? Employment, European Commission), Wim Van Lancker
(Assistant Professor in Social Work and Social Policy, KU
Intra-generational social inequalities are present among Leuven) and Daniela Vono de Vilhena (Scientific Coordinator
all generations. Different social classes coexist among and Research Scientist, Population Europe Secretariat /
children, adults and older people, and the promotion of Max Planck Institute for Demographic Research).
more equal societies for all age groups is often mentioned in
public discourses as a priority for modern societies. A more
nuanced issue is intergenerational inequalities, understood Intra-generational
Demographic Change unfairness
and Housing
in older
here as inequalities between age-groups: How they ages
develop throughout the life course, its consequences for
societies and how to prevent / mitigate them. In 2017, the Ageing is not a homogeneous process among the population.
Organisation for Economic Co-operation and Development It largely depends on the places where individuals live, their
(OECD) published a report entitled ‘Preventing Ageing lifestyle, educational level, occupation and health status.
Unequally’, referring to inequalities that are developed Consequently, when we look at a specific cohort, inequality
throughout the life course and materialised in old age. in old age will, to a large extent, reflect individuals’ paths
The report looks at both intra- and intergenerational over their entire life course. Inequality at older ages is
inequalities. The concern about the topic was derived from a major challenge for societies and there is no one-size-
the fact that despite the current generation of older people fits-all solution. The OECD report ‘Preventing Ageing
having on average higher income and lower poverty risks Unequally’ (2017) presents multiple forms of evidence
than previous ones in most OECD countries, this trend is on current inequality patterns at older ages. It shows, for
expected to change. Younger generations are likely to face example, enormous differences among 50-64-year-olds in
higher inequality in old age due to less stable labour market employment rates depending on educational attainment and
conditions and widening inequalities in the distribution of gender. In 2015, the average among the OECD countries
earnings and household income (OECD, 2017). for older people with no upper-secondary schooling was
51% for men and 36% for women, and 75% and 65% for
In March 2018, Population Europe organised a High-Level those with a tertiary education, respectively. The report
Expert Meeting chaired by Hervé Boulhol (Senior Economist also highlights the significant impact of poor health status
in the Directorate for Employment, Labour and Social on the age of retirement, the unequal access to health
Affairs at the OECD) and Pieter Vanhuysse (Professor of infrastructures and public transport services depending on
Comparative Welfare State Research at the Department of where individuals live, which is particularly problematic in
Political Science and Public Management and the Danish rural areas, and gender inequalities in daily informal care.
Centre for Welfare Studies of the University of Southern
Denmark, Odense). The experts discussed how governments
can better tackle inequalities in older ages as a current How can we better
Demographic Change
cope
andwith
Housing
inequalities
challenge, but also how to prevent unequal ageing among at older ages?
the future generations of retirees. Participants included
Marco Albertini (Associate Professor, Department of The OECD (2017) suggests focusing on promoting health
Political and Social Sciences, University of Bologna), Mikkel of the elderly, including through preventive programmes,
Barslund (Research Fellow and Head of Ageing Societies better access to information, integration and support of
Programme, Centre for European Policy Studies), David home and community care, enhancing job quality and
Eatock (Policy Analyst, European Parliamentary Research combating unemployment, particularly by removing
Service, speaking in a private capacity and not on behalf barriers to retain and hire older workers, promoting lifelong
of the European Parliament), Andreas Edel (Executive learning opportunities, reducing inequalities in old-age
Secretary of Population Europe / Max Planck Institute for pensions and improving the quality and coverage of long-
Demographic Research), Vitalija Gaucaite Wittich (Chief of term care.
the Population Unit, United Nations Economic Commission
for Europe), Axel Gosseries (Head of the Hoover Chair in At our Experts Meeting, Mike Mansfield stressed the
Economic and Social Ethics, UC Louvain), Jana Hainsworth importance of improving the health status of the population
(Secretary General, Eurochild), Mike Mansfield (Program at all ages. He indicated that in a survey conducted at the
Director, Aegon Center for Longevity and Retirement), Aegon Center for Longevity and Retirement, 39% of the
Rainer Münz (Adviser on Migration and Demography to the retirees interviewed affirmed they had to retire before they
European Political Strategy Centre, European Commission), had planned and the largest single reason for this was the

Policy Brief No. 18 | October 2018 www.population-europe.eu

retirees’ own poor health. Mikkel Barslund pointed towards via bequests, entrenching and exacerbating inequalities in
the potential in considering taxation, which is context (and the future.
age) specific, in order to prevent inequalities derived from
poor health status or unfortunate circumstances early in the
life course. Vitalija Gaucaite intervened by indicating that Investing
Demographicin children
Changetoday
and Housing
may prevent
over the last 10 years, the focus of discussions on ageing inequalities at older ages in the future
in international organisations moved from only addressing
social security and pension systems to the contributions of Pieter Vanhuysse presented brand new evidence on the
the elderly to societies, how to age healthier, how to adjust unequal distribution of resources among cohorts (Gál,
work environments, how to realise the silver economy Vanhuysse and Vargha, 2018). Data on public transfers in
potential, the role played by volunteering and caregiving, general – public policies financed by taxes and social security
and the specific needs of the most vulnerable groups. For contributions – shows an elderly bias in social spending
Julius Op de Beke, societies must ensure that childless throughout the European Union (EU). States tend to devote
individuals are not penalised at older ages for not having significantly more resources per capita to the old than to
family support networks. the young. However, public transfer data largely ignores
intra-family transfers of cash and time (the household
economy, which involves care). Once more complete data
The best way Change
Demographic to prevent
andinequalities
Housing at on the value of all forms of resources transferred across
older ages is to redesign policies to have generations is analysed, a radically different picture
a life course perspective emerges on what generations give to each other. By also
considering the transfers that families give, Vanhuysse and
Experts agree that inequalities inside societies must be colleagues concluded that European societies transfer more
tackled from a life course perspective: Policies towards the than twice as many per capita resources to children as to
youngest individuals should not be seen as competing with the elderly. However, most of these resources come from
those targeted at the elderly, as well-designed social policies parents, not states.
for the elderly are no substitute for effective early policies
for the young. Instead, as Pieter Vanhuysse pointed out, As Vanhuysse put it, Europe is a continent of pro-elderly
well-designed investment in the young can boost the fiscal welfare states embedded within societies composed of
foundations for elderly policies. Hervé Boulhol indicated strongly child-oriented families. So the key question is
that over the last 30 years, real income has grown faster why do states not take a greater role in helping families
for older age groups, and poverty risks have shifted from raise children? After all, children are also public goods.
the old to the young. This implies that young generations Their future taxes, innovations and other contributions
may not enjoy the same retirement situation like older will benefit all of society later, including people who do
cohorts. Consequently, there is a need for a life course not become parents. Since the start of the 21st century,
policy package based on three pillars: Prevent inequality politicians across the EU have increasingly proclaimed
before it builds up and compounds, mitigate inequality at state investment in human capital as the new social policy
young and adult ages, and tackle inequality at older ages paradigm. Yet despite much political rhetoric, actual state
(OECD, 2017). investment in children is still comparatively small, except
for Scandinavian countries. In the first decade of the 21st
For Wim Van Lancker, a life course perspective is key as century, state spending on early childhood education and
it shows how things change over time depending on the care averaged only 0.6% of GDP in the western EU Member
context of the welfare state. Processes should be monitored States, and 0.4% in eastern Member States (Vanhuysse,
by longitudinal data so states are able to invest in what is 2015).
really needed. Marco Albertini indicated that we need to look
at historical generations or birth cohorts, otherwise there is As Vanhuysse noted, since children are also ever scarcer
a risk of implementing policy changes that penalise the same public goods in ageing societies, the case is even stronger
people two times in their life course (as young adults and for much more state investment in their human capital.
pensioners). Axel Gosseries suggested that we need more However, solutions are far from straightforward. Experts
indicators that incorporate retrospective and prospective highlight different barriers. For Albertini, it is not likely
information at the same time for all generations when that the distribution of public investments in children and
studying intergenerational relations. Finally, David Eatock elderly will change in the short and medium term, and
noted the importance of intra-generational inequalities and the key challenge is to find a way in the actual system to
how these could be transmitted down the generations, e.g. keep the transfers to the elderly while changing the way

www.population-europe.eu Policy Brief No. 18 | October 2018

 the resources they receive are collected, for instance by Demographic change and housing
Policy Recommendations:
promoting employment among young adult workers.
-- The reduction of inequalities inside societies must be
Van Lancker added that we need to think in both directions: tackled by measures addressing both intra-generational
If children are currently receiving less resources from the and intergenerational inequalities.
states, the elderly are also receiving less intra-familiar -- In order to equalise life chances, state transfers for high
transfers. Jana Hainsworth stressed the complexity around quality education and care for children (especially from dis-
investments in children, as it goes beyond education: advantaged backgrounds) should increase substantially.
Ending child poverty implies reforming protection systems. -- A well-designed policy package to combat inequalities
Breaking inequalities in early childhood involves more should be based on three pillars: Prevent inequality at
than public investments. It also involves families and early ages, mitigate inequality among youth and adults,
private actors supporting families. Eatock concurred with and tackle inequality at older ages.
Vanhuysse in noting that the typically greater propensity
of older people to vote tends to give them increasing
political power in ageing societies. Any action to rebalance References
expenditure towards the young would require careful - Gál, R., Vanhuysse, P. and Vargha, L. (2018). Pro-elderly wel-
fare states within child-oriented societies. Journal of European
framing to convince older electorates of its merits.
Public Policy, 25(6): 944-958. Retrieved from http://dx.doi.
Hainsworth mentioned different interests of families org/10.2139/ssrn.2979171
depending on their socio-economic background: Middle and
- OECD (2017). Preventing Ageing Unequally. Paris: OECD.
upper classes often associate poor outcomes for children
Retrieved from https://doi.org/10.1787/9789264279087-en
with lower socio-economic groups with bad parenting,
which is linked to individual responsibility. This results in - Vanhuysse, P. (2015). Skills, Stakes and Clout: Early Hu-
less political support for efforts to address structural causes man Capital Foundations for European Welfare Futures. In B.
Manin, (ed.), The Future of Welfare in a Global Europe (pp.
of poverty and disadvantage.
267-296). Alderschot: Ashgate. Retrieved from https://ssrn.
com/abstract=2574845

Demographic
There are still Change
lots of open
and Housing
questions

There is no doubt that more investments in early

interventions are needed, however it is not easy to answer
the questions ‘how much should we invest’, and ‘on which
issues’. Van Lancker questioned whether investing in high
quality childcare will guarantee high returns for children
when they become adults. In his opinion, the key challenge
is to overcome structural barriers for accessing childcare:
In the majority of countries, disadvantaged children are
using much less childcare compared to more advantaged
children. This risks exacerbating rather than mitigating early
inequalities. Barslund added that Europe-wide solutions are
difficult to find. Incremental changes are successfully done Imprint
in contexts where policymakers know what is possible and Publisher: Max Planck Society for the Advancement of Sciences
on behalf of the collaborative network “Population Europe”
where they know how institutions operate, their historical
Technical Coordination: Aimie Bouju, Emily Lines
trends and narratives. Vitalija Gaucaite highlighted the Layout: The Brettinghams GmbH, Berlin
importance of thinking forward: We still do not know how Photo Credit (Cover Page): ©shutter_m – iStock
Print: Newprint blue GmbH, Berliner Str. 13-14, 10715 Berlin
the labour market will look in 30 years, and this may
ISSN: 2512-6164
change the way we think about preventing inequalities Contact: Population Europe Secretariat, Markgrafenstraße 37,
inside societies. 10117 Berlin, Germany
Phone: +49 (0)30 2061 383 30, Fax: +49 (0)30 2061 383 50
Email: office@population-europe.eu
Web: www.population-europe.eu

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Policy Brief No. 18 | October 2018 www.population-europe.eu