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Generational Inequalities and Welfare Regimes

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  • Louis Chauvel
  • Martin Schr der

Abstract

This paper uses a new age period cohort model to show that among cohorts born between 1935 and 1975, cohorts born around 1950 are significantly above the income trend in most countries. However, such inequalities between generations are much stronger in conservative, continental European welfare states, compared to social democratic and liberal welfare states. As we show, this is because conservative welfare states expose some cohorts to high youth unemployment and make lifetime earnings dependent on a favorable entry into the labor market. We thus demonstrate that conservative welfare states have put the burden of adjustment to the post-1975 economic slowdown on birth cohorts that could not get stable jobs before 1975, while similar cohort inequalities are much weaker in liberal and social democratic welfare states. In these latter two welfare regimes, the burden of adjustment to the post-1975 economic slowdown was not put on the shoulders of some cohorts relative to others. Our analysis is the first to show which welfare regimes are more conducive to such inequalities between cohorts and what mechanisms lead to these material cohort inequalities.

Suggested Citation

  • Louis Chauvel & Martin Schr der, 2014. "Generational Inequalities and Welfare Regimes," LIS Working papers 606, LIS Cross-National Data Center in Luxembourg.
  • Handle: RePEc:lis:liswps:606
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    2. Massimo Baldini & Giulia Mancini & Giovanni Vecchi, 2018. "No country for young people. Poverty and Age in Italy, 1948-2018," Department of Economics 0128, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    3. Octavio Nicolas Bramajo, 2022. "An Age-Period-Cohort Approach to Analyse Late-Life Depression Prevalence in Six European Countries, 2004–2016," European Journal of Population, Springer;European Association for Population Studies, vol. 38(2), pages 223-245, May.
    4. Maurizio Bussolo & Daniele Checchi & Vito Peragine, 2023. "Long-term evolution of inequality of opportunity: Educated parents still matter," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 21(2), pages 277-323, June.
    5. Hippolyte d’Albis & Ikpidi Badji, 2017. "Intergenerational inequalities in standards of living in France," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 491-492, pages 71-92.
    6. Bernhard Hammer & Michael Christl & Silvia De Poli, 2020. "Redistribution across Europe: How much and to whom?," Working Papers 593, ECINEQ, Society for the Study of Economic Inequality.
    7. Esa Karonen & Mikko Niemelä, 2022. "Necessity-Rich, Leisure-Poor: The Long-Term Relationship Between Income Cohorts and Consumption Through Age-Period-Cohort Analysis," Journal of Family and Economic Issues, Springer, vol. 43(3), pages 599-620, September.
    8. Bernhard Hammer & Sonja Spitzer & Alexia Prskawetz, 2022. "Age-Specific Income Trends in Europe: The Role of Employment, Wages, and Social Transfers," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(2), pages 525-547, July.
    9. Esperanza Vera-Toscano & Elena C. Meroni, 2021. "An Age–Period–Cohort Approach to the Incidence and Evolution of Overeducation and Skills Mismatch," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(2), pages 711-740, January.
    10. Andrew Bell & Kelvyn Jones, 2018. "The hierarchical age–period–cohort model: Why does it find the results that it finds?," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(2), pages 783-799, March.
    11. Hippolyte d'Albis & Ikpidi Badji, 2017. "Les inégalités de niveaux de vie entre les générations en France," PSE-Ecole d'économie de Paris (Postprint) halshs-01524882, HAL.
    12. Agnieszka Chło´n-Domi´nczak & Anita Abramowska-Kmon & Irena E. Kotowska & Wojciech Łatkowski & Paweł Strzelecki, 2019. "Welfare state and the age distribution of public consumption and public transfers in the EU countries," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 17(1), pages 071-097.
    13. Hippolyte d'Albis & Carole Bonnet & Julien Navaux & Jacques Pelletan & François-­charles Wolff, 2017. "Le déficit de cycle de vie en France : une évaluation pour la période 1979-2001," PSE-Ecole d'économie de Paris (Postprint) halshs-01599680, HAL.
    14. Esperanza Vera-Toscano & Elena C. Meroni, 2021. "An age–period–cohort approach to disentangling generational differences in family values and religious beliefs: Understanding the modern Australian family today," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 45(20), pages 653-692.
    15. Robert M. O’Brien, 2023. "Setting bounds on age, period, and cohort effects using observed data," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(3), pages 2841-2857, June.
    16. Ferdi Botha & Esperanza Vera-Toscano, 2022. "Generational Differences in Subjective Well-Being in Australia," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 17(5), pages 2903-2932, October.
    17. Hippolyte d’Albis & Carole Bonnet & Julien Navaux & Jacques Pelletan & François-Charles Wolff, 2017. "Lifecycle deficit in France: an assessment for the period 1979-2011," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 491-492, pages 47-70.
    18. Bettina Schuck & Nadia Steiber, 2018. "Does Intergenerational Educational Mobility Shape the Well-Being of Young Europeans? Evidence from the European Social Survey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(3), pages 1237-1255, October.
    19. Ke Meng & Shouhao Li, 2023. "Welfare Regimes and Intergenerational Social Mobility: An Institutional Explanation of the Great Gatsby Curve," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(1), pages 355-375, January.
    20. Hammer, Bernhard & Christl, Michael & De Poli, Silvia, 2023. "Public redistribution in Europe: Between generations or income groups?," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    21. Adrien Papuchon, 2020. "Have Young Adults’ Opinions on the Social Role of the State Changed since the 2008 Economic Crisis?," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 514-515-5, pages 175-198.
    22. Robert M. O’Brien, 2020. "Estimable intra-age, intra-period, and intra-cohort effects in age-period-cohort multiple classification models," Quality & Quantity: International Journal of Methodology, Springer, vol. 54(4), pages 1109-1127, August.
    23. d’Albis, Hippolyte & Bonnet, Carole & Navaux, Julien & Pelletan, Jacques & Wolff, François-Charles, 2015. "Le déficit de cycle de vie en France: une évaluation pour la période 1979-2011," CEPREMAP Working Papers (Docweb) 1513, CEPREMAP.
    24. Marta Escalonilla & Begoña Cueto & María José Pérez-Villadóniga, 2022. "Is the Millennial Generation Left Behind? Inter-Cohort Labour Income Inequality in a Context of Economic Shock," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(1), pages 285-321, November.
    25. Szymborska, Hanna Karolina, 2019. "Wealth structures and income distribution of US households before and after the Great Recession," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 168-185.

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