Should the Economic Life Course be Redesigned? Old Age Security in a Time of Transition

Abstract

The last “great pension debate” in Canada came to an end in the early 1980s but is now about to resume. The terms of debate have changed significantly, however. As a contribution to the debate, this paper aims to identify emergent positions and the new social, economic and political conditions to which they are a response. “Conservative” strategies have emphasized privatization of the pension function and greater emphasis on providing income-tested benefits to the low income elderly. New “progressive” alternatives have advocated a redesign of the welfare state to allow for a more flexible model of retirement and the economic life course more generally. Each is a response to real changes in the fiscal capacities of governments, the conditions for successful economic performance and the distribution of economic risk among age groups. The empirical core of the paper uses data from the Survey of Consumer Finances to show how the age distribution of economic well-being has changed since the the 1960s when the current welfare state was designed. Our aim is not to resolve the debate but to set it in context and identify the main assumptions and models underlying alternative strategies for reform.