Chapter 6 - More, but Different, Social Spending in Rich Countries since 1914

Summary

Since 1914 rich countries have shifted their social spending missions, away from anti-poverty policies and mass schooling and toward subsidies to the elderly. Over r4ecent generations, this mission shift has probably compromised both income equality and income growth. The global mission shift toward public pensions may have been due in large part to improvements in life expectancy, which allowed longer life past work and contributed to political “gray power.” The inference about gray power springs from the fact that public pension spending rose even per elderly person, and not just at the rate of population aging. Its per-person generosity rose faster than the rise in educational spending per child of school age. The rising demand for government pensions was probably linked, in addition, to a quiet global change in the role of intra-family transfers. Career and family developments may have raised public pressure for more government support of the elderly.