1. Kenneth Nelson
Professor of sociology
Swedish Institute for Social Research (SOFI)
Stockholm University
Sweden

2. The Generational Welfare Contract
Driving forces
Demographic Economic Socio-political
Age-related social risks
Childhood Working-age Old-age
Welfare state institutional structures
(social citizenship rights)
The generational
welfare contract
Outcomes
(e.g. poverty, subjective well-being, trust, employment)

3. Ideal-typical configurations of three unbalanced generational welfare contracts
Pro-child
Pro-work
Pro-old

4. Ideal-typical configurations of the balanced generational welfare contract
Pro-child
Pro-work
Pro-old
Balanced

5. Ideal-typical configuration of four generational welfare contracts
Pro-child
Pro-work
Pro-old
Balanced
Our basic argument in this book is that
Balanced generational welfare contracts provide more extensive social citizenship rights for all age groups and encourage positive-sum solutions in generational politics; and
more extensive social citizenship rights contribute positively to various outcomes that we have reason to value.

6. Ideal-typical configurations of four unbalanced generational welfare contracts
Pro-child
Pro-work
Pro-old
Balanced
The generational welfare contract(s): income replacement in social insurance for
three age-related social risks (averages for 18 OECD countries, 1980–2010)
Pro-old Pro-work Balanced
The balanced contract includes Austria, Belgium, Denmark, Finland, France, Sweden and Norway.
The pro-work contract includes Germany, Japan, the Netherlands and Switzerland.
The pro-old contract includes Australia, Canada, Ireland, Italy, New Zealand, the United Kingdom and the United States.
Source: The Social Policy Indicators Database (SPIN), own calculations.

7. The Belgian generational welfare contract
Average
Source: The Social Policy Indicators Database (SPIN), own calculations.

8. Levels of income replacement
Balance and levels of income replacement in age-related social insurance;
country-fixed effects regressions for 18 OECD countries,
Levels of income replacement
Overall
Childhood
Working age
Old age
Balance of income replacement +
GDP per capita
(+)
(–)
Unemployment
Service sector employment
Old-age dependency ratio
Civilian labor force
Parentheses indicate insignificant associations.
Generational balance is measured by the inverted coefficient of variation (*100) of income replacement
in age-related social insurance.
The overall level is simply the average income replacement in age-related social insurance.

9. Social insurance and social assistance in 18 OECD countries 1990-2010.
Source: The Social Policy Indicators Database (SPIN), own calculations.

10. Contents Chapter 1: Introduction
Chapter 2: Three dimensions of generational justice
Chapter 3: The generational welfare contract
Chapter 4: Profiling the generational welfare contract
Chapter 5: Contracts against poverty
Chapter 6: Contracts for life satisfaction and happiness
Chapter 7: Contracts for trust
Chapter 8: Contracts for or against employment?
Chapter 9: Politics of generational welfare contracts
Chapter 10: The generational welfare contract on the agenda

11. Income replacement in social insurance and poverty in three age-related risk categories by type of generational welfare contract (country averages for the period 1980–2010)
Balanced Pro-work Pro-old
Income replacement in social insurance
Poverty rate
The balanced contract includes Austria, Belgium, Denmark, Finland, France, Sweden and Norway.
The pro-work contract includes Germany, Japan, the Netherlands and Switzerland.
The pro-old contract includes Australia, Canada, Ireland, Italy, New Zealand, the United Kingdom and the United States.
Source: The Cross-National Data Center in Luxembourg (LIS) and the Social Policy Indicators Database (SPIN), own calculations.

12. Income replacement in social insurance and poverty in three age-related risk categories by type of generational welfare contract (country averages for the period 1980–2010)
Balanced Pro-work Pro-old
Income replacement in social insurance
Poverty rate
The balanced contract includes Austria, Belgium, Denmark, Finland, France, Sweden and Norway.
The pro-work contract includes Germany, Japan, the Netherlands and Switzerland.
The pro-old contract includes Australia, Canada, Ireland, Italy, New Zealand, the United Kingdom and the United States.
Source: The Cross-National Data Center in Luxembourg (LIS) and the Social Policy Indicators Database (SPIN), own calculations.

13. Pathways between balance and overall level of income replacement in age-related social insurance and poverty (EU-at-risk-of) after confounding adjustment. Country-fixed effects structural equation model of 18 OECD countries 1980–2010
Balance of income
replacement
Overall level of
income replacement
GDP per capita
Poverty
Service sector
employment
Old-age dependency
ratio
Negative association
Positive association
The model includes the following confounding factors; the unemployment rate, GDP per capita,
the old-age dependency ratio, civilian labor force and service sector employment.
Only statistically significant paths are shown (cluster robust standard errors).

14. Life satisfaction and happiness in three age-related social risk categories by generational welfare contract around 2010 (averages of 18 OECD countries)
Life satisfaction Happiness
Balanced
Pro-work
Pro-old
The balanced contract includes Austria, Belgium, Denmark, Finland, France, Sweden and Norway.
The pro-work contract includes Germany, Japan, the Netherlands and Switzerland.
The pro-old contract includes Australia, Canada, Ireland, Italy, New Zealand, the United Kingdom and the United States.
Source: The European Social Survey and the World Values Survey.

15. Life satisfaction and happiness in three age-related social risk categories by generational welfare contract around 2010 (averages of 18 OECD countries)
Life satisfaction Happiness
Balanced
Pro-work
Pro-old
The balanced contract includes Austria, Belgium, Denmark, Finland, France, Sweden and Norway.
The pro-work contract includes Germany, Japan, the Netherlands and Switzerland.
The pro-old contract includes Australia, Canada, Ireland, Italy, New Zealand, the United Kingdom and the United States.
Source: The European Social Survey and the World Values Survey.

16. Multilevel logistic regressions of life satisfaction and happiness on the overall
level of income replacement in age-related social insurance in 18 OECD countries around 2010
Life satisfaction
Happiness
Model
S:I
S:II
S:III
H:I
H:II
Individual-level variables
V1. Childhood risk category –
(–)
(+)
V2. Old-age risk category +
V3. Male
V4. Couple
V5. Primary education
V6. Secondary education
Country-level variables
V7. GDP per capita
V8. WVS
V9. Overall level of income replacement
V1*V9
V2*V9
∆BIC
9.96
–2.27
–5.52

17. Multilevel logistic regressions of life satisfaction and happiness on the overall
level of income replacement in age-related social insurance in 18 OECD countries around 2010
Life satisfaction
Happiness
Model
S:I
S:II
S:III
H:I
H:II
Individual-level variables
V1. Childhood risk category –
(–)
(+)
V2. Old-age risk category +
V3. Male
V4. Couple
V5. Primary education
V6. Secondary education
Country-level variables
V7. GDP per capita
V8. WVS
V9. Overall level of income replacement
V1*V9
V2*V9
∆BIC
9.96
–2.27
–5.52

18. Social and political trust in three age-related social risk categories by generational welfare contract in 18 OECD countries around 2010
Political trust Social trust
Balanced
Pro-work
Pro-old
The balanced contract includes Austria, Belgium, Denmark, Finland, France, Sweden and Norway.
The pro-work contract includes Germany, Japan, the Netherlands and Switzerland.
The pro-old contract includes Australia, Canada, Ireland, Italy, New Zealand, the United Kingdom and the United States.
Source: The European Social Survey and the World Values Survey.

19. Social and political trust in three age-related social risk categories by generational welfare contract in 18 OECD countries around 2010
Political trust Social trust
Balanced
Pro-work
Pro-old
The balanced contract includes Austria, Belgium, Denmark, Finland, France, Sweden and Norway.
The pro-work contract includes Germany, Japan, the Netherlands and Switzerland.
The pro-old contract includes Australia, Canada, Ireland, Italy, New Zealand, the United Kingdom and the United States.
Source: The European Social Survey and the World Values Survey.

20. Multilevel regressions of political and social trust on the overall level of income replacement in age-related social insurance in 18 OECD countries around 2010
Political trust
Social trust
 Model
P: I
P: II
S: I
S: II
Individual-level variables
V1. Childhood risk category
(–) –
V2. Old-age risk category +
(+)
V3. Male
V4. Couple
V5. Primary education
V6. Secondary education
Country-level variables
V7. GDP per capita
V8. WVS
V9. Overall level of income replacement
V1*V9
V2*V9
∆BIC
–7.03
5.46
*p < 0.05, **p < 0.01 using cluster robust standard errors.

21. Multilevel regressions of political and social trust on the overall level of income replacement in age-related social insurance in 18 OECD countries around 2010
Political trust
Social trust
 Model
P: I
P: II
S: I
S: II
Individual-level variables
V1. Childhood risk category
(–) –
V2. Old-age risk category +
(+)
V3. Male
V4. Couple
V5. Primary education
V6. Secondary education
Country-level variables
V7. GDP per capita
V8. WVS
V9. Overall level of income replacement
V1*V9
V2*V9
∆BIC
–7.03
5.46
*p < 0.05, **p < 0.01 using cluster robust standard errors.

22. Labour force participation
Labor force participation and unemployment rates by type of generational
welfare contract in 18 OECD countries 1960–2010
Labour force participation
Total Male Female
Balanced
Pro-work
Pro-old
Unemployment
Total Male Female
Source: OECD.Stat.

23. Labour force participation
Labor force participation and unemployment rates by type of generational
welfare contract in 18 OECD countries 1960–2010
Labour force participation
Total Male Female
Balanced
Pro-work
Pro-old
Unemployment
Total Male Female
Source: OECD.Stat.

24. Pathways between balance and overall level of income replacement in age-related social insurance and labor force participation after confounding adjustment. Country fixed effects structural equation model of 18 OECD countries 1985–2010
Balance of income replacement
Employment protection
legislation
Overall level of
income replacement
Labor force participation
Active labour market policy
Negative association
Positive association
The model includes the following confounding factors; the unemployment rate, GDP per capita,
the old-age dependency ratio, civilian labor force and service sector employment
Only statistically significant paths are shown (cluster robust standard errors).

25. Cumulative partisan cabinet shares (percentages)
Generational welfare contracts and cumulative partisan cabinet shares (percentages) in 18 OECD countries 1960–2010
Cumulative partisan cabinet shares (percentages)
Contract type
Country
Left
Confessional
Secular centrist/right
Balanced
Austria
52.4
42.6
5.0
Belgium
33.3
43.8
23.0
Denmark
44.4
0.7
54.9
Finland
36.3
0.3
62.8
France
27.7
6.1
66.2
Norway
70.7
6.8
22.6
Sweden
76.5
1.6
22.0
Average
48.7
14.5
36.6
Pro-work
Germany
28.7
48.8
22.5
Japan
2.7
0.0
97.3
Netherlands
23.7
52.6
23.8
Switzerland
24.3
28.4
47.3
19.8
32.4
47.7
Pro-old
Australia
34.9
65.1
Canada
100.0
Ireland
10.5
17.3
71.4
Italy
21.5
55.5
20.9
New Zeeland
38.6
61.4
United Kingdom
46.9
53.1
United States
21.8
10.4
67.4
The balanced contract includes Austria, Belgium, Denmark, Finland, France, Sweden and Norway.
The pro-work contract includes Germany, Japan, the Netherlands and Switzerland.
The pro-old contract includes Australia, Canada, Ireland, Italy, New Zealand, the United Kingdom and the United States.
Source: Korpi and Palme (2003) and the European Journal of Political Research (various years), own calculations.

26. Cumulative partisan cabinet shares (percentages)
Generational welfare contracts and cumulative partisan cabinet shares (percentages) in 18 OECD countries 1960–2010
Cumulative partisan cabinet shares (percentages)
Contract type
Country
Left
Confessional
Secular centrist/right
Balanced
Austria
52.4
42.6
5.0
Belgium
33.3
43.8
23.0
Denmark
44.4
0.7
54.9
Finland
36.3
0.3
62.8
France
27.7
6.1
66.2
Norway
70.7
6.8
22.6
Sweden
76.5
1.6
22.0
Average
48.7
14.5
36.6
Pro-work
Germany
28.7
48.8
22.5
Japan
2.7
0.0
97.3
Netherlands
23.7
52.6
23.8
Switzerland
24.3
28.4
47.3
19.8
32.4
47.7
Pro-old
Australia
34.9
65.1
Canada
100.0
Ireland
10.5
17.3
71.4
Italy
21.5
55.5
20.9
New Zeeland
38.6
61.4
United Kingdom
46.9
53.1
United States
21.8
10.4
67.4
The balanced contract includes Austria, Belgium, Denmark, Finland, France, Sweden and Norway.
The pro-work contract includes Germany, Japan, the Netherlands and Switzerland.
The pro-old contract includes Australia, Canada, Ireland, Italy, New Zealand, the United Kingdom and the United States.
Source: Korpi and Palme (2003) and the European Journal of Political Research (various years), own calculations.

27. Pathways between balance and overall level of income replacement in age-related social insurance and cumulative partisan incumbency after confounding adjustment. Country fixed effects structural equation models of 18 OECD countries b)
Left cabinet shares
Balance of income replacement
Overall level of income replacement
Confessional cabinet shares b)
Left cabinet shares
Balance of income replacement
Overall level of income replacement
Negative association
Positive association
The models includes the following confounding factors; the unemployment rate, GDP per capita,
the old-age dependency ratio, civilian labor force and service sector employment.
Only statistically significant paths are shown (cluster robust standard errors).

28. Conclusions
• Positive-sum solutions in generational politics are more likely
to be supported by the balanced contract.
• Social citizenship rights that are generationally balanced and
provide more evenly distributed protection across different stages
of life are advantageous for all citizens.
• The balanced generational welfare contract is not only associated
with increased welfare of all citizens, but inequalities are also reduced.
• Generational trade-offs in policymaking can thereby be reduced or
even avoided, leading to more just and equal societies.