THE ECONOMY to the test of
of population ageing are too often only considered in terms of pension system
and reforms to be launched in order to ensure their duration. This vision is too
simplistic. The problem of ageing affects all fields of our Society. Our way of
working, of organising our social life, how we cover social risks, how we
consider different age groups, the relationships between the generations, are
deeply transformed by population ageing.
The increase in
life expectancy together with population ageing is questioning the existing
cultural pattern of age organization and social time. This situation challenges
the respective role of each generation in our Society, their contribution to the
production of wealth and the transfer of resources. This situation also requires
a new kind of solidarity between generations.
France the negotiations about the
reform of the pension scheme are now beginning. But politicians and economists
have different opinions about the consequences of population ageing on the
future of the Social Security system.
consider the problem of pensions. Indeed, for them, a pension scheme is a
political choice which only involves the mechanisms of finance. To adapt pension
schemes to population evolution, they consider necessary and possible to play on
different leviers such
as: the contribution rate and the number of years, the raise and indexation or
even the decrease in pensions.
As far as economists are concerned – for example Jean Arthus, professor
at the Sorbonne and at the University Institution specialized in engineering -
every option, every political choice has foreseeable economic effects, above all
on savings and investments, employment and the labour market, and on the growth
and redistribution of income between social classes and generations. Population
ageing also has important effects on inflation, and financial profit.
The state of employment is as essential for the different generations as
their situation as regards the Social Security.
As for Anne Marie GUILLEMARD, sociologist and economist, member of the of
European Academy of Science, contrary to what is generally asserted,
« the real challenge posed by ageing is less a problem of pensions than
a problem of employment faced by workers who are getting
This is due to the fact that we always associate ageing with pensions, and
we forget a fundamental principle: the system of pension is based on a tacit
agreement between generations. This agreement not only takes into account how
the social time is divided during the lifetime but also the risks to be covered,
according to the age category, to ensure the payment of the pensions. However
today we face an upheaval of the whole organization of ages and social
Indeed, the reasonable organization of social time: training for young
people, lasting and secure employment, pension, is disintegrating because of the
effects of economic and social hazards (unemployment, outsourcing, to change
Finally in France, we can see, in the framework
of social care, a new social definition of ages. By reducing the age of
retirement, people leave the labour market earlier, which means that the social
time of a whole generation is increased. Indeed, this generation is already
considered old while still relatively young since it is earlier sent into
inactivity. And when quinquagenarians are dubbed “old workers”, the whole social
definition of age is being questioned, irrespective of demographic
We won't go over what has been said during the general assembly in
Albufeira; to cope with population ageing, capitalisation had qualities that
would not have repartition. Indeed capitalisation should accumulate reserves
that would protect pensions from economical risks. Taking a look at recent
events, it is obvious that it is not true. Capitalisation, as well as
Repartition, suffers from demographic and economic clash but through different
In France, we have a more cautious
position. We think that it is possible to combine both
Whatever pension scheme we chose, it will have consequences on savings
and investments. To award a pension is like giving a substitution income.
Whatever the channel used, Capitalisation or Repartition, it remains a money
transfer through time (savings or subscriptions). The two systems are based on
the production of wealth: payment of an income that partly finances the
pensions, or payment to a fund that ensures a pension complement. The concept of
savings (subscription or payment to a fund) though remains in both pension
So we observe that an increase in the subscription rate as well as too
much Capitalisation can lead to a decrease in purchasing power of working
people, thus slowing down economic growth, and/or provoking a transfer of
capital, prejudicial to investments.
solidarity between generations
debate between supporters of Capitalisation and supporters of Repartition is the
result of a cultural choice more than a real economic approach. Pension funds
(« pensuin fund ») are a typical ANGLO SAXON concept of Social
Security. The LATIN pattern remained rather reluctant to this individualistic
scheme, and preferred a system based on solidarity, either for ideological
reasons or because it is part of the cultural heritage.
During the General Assembly in Albufeira, the French delegation
affirmed its support to the Repartition system with, as a complement, a touch of
Capitalisation, under the concept of « pension savings » ('épargne
Because even if we are aware of the effects of ageing on social security
(pensions and health care system), we are still convinced that in our Society
which is losing its social references, we must maintain solidarity even if we
will have to adapt it.
Indeed, this solidarity between generations must evolve towards shared
efforts between working people and pensioners. We must establish a hierarchy
between those who pay and those who receive. We cannot close our eyes on this
reality or we will risk a generation clash.
The fact that AGE and YFJ (the European Forum for Youth) also asked the
President of the European Commission, M. Barroso, to include the concept of
solidarity between generations into the social agenda of the EU confirms us in
our opinion. The two European networks, which represent millions of young and
old citizens, think that some steps are essential to promote more solidarity and
ensure cooperation between generations.
AGE and YFJ
think that EU member states must integrate intergenerational solidarity into
their national programs of health care system reforms in order to create better
social cohesion and long lasting social patterns.
intergenerational solidarity will help both citizens and politicians to realize
the necessary changes to face the challenge of demographic change.
It is essential
to BRING TOGETHER YOUNG AND OLD PEOPLE to create a society for all
Jean Claude CHRETIEN -