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Pension Systems after the Storm: France and the United Kingdom in a Comparative Analysis

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  • Christine Lagoutte
  • Anne Reimat

Abstract

All pension systems have been affected by the financial and economic crisis, although in different ways. This paper analyses the effects of the crisis on pension systems and the resulting responses and changes, and offers a theoretical interpretation of these responses. This interpretation focuses on the relationships between pension systems and broader socioeconomic institutional configurations, and between pension systems and other core, formative economic institutions, in order to explain the effects of the crisis, the nature of the reforms adopted by governments and the future outlook for pension systems. From this perspective, a comparative analysis of two pension systems with different approaches, the French system that relies heavily on social insurance and the primarily market-based British system, appears relevant in the interest of assessing how similar pressures and disruptions can produce different impacts and responses. The analysis shows that these pension systems’ responses to the crisis have preserved the main institutional features of each configuration, and even reinforce some of them. Nevertheless, it appears that both systems are converging toward an institutionalization of a twofold social welfare system. The French system attempts to preserve the pension rights of core-workers on a mandatory social insurance basis, while non-standard workers benefit from tax-funded social solidarity measures. In the British system, the State intervenes to both extend secure pension fund enrolment to low income groups and to reinforce safety nets for lower income retirees. Finally, the recent changes have not called into question the fundamental logic of either pension system, although concerns are on the rise in respect of their future adequacy and sustainability.

Suggested Citation

  • Christine Lagoutte & Anne Reimat, 2012. "Pension Systems after the Storm: France and the United Kingdom in a Comparative Analysis," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 9(2), pages 305-330, August.
  • Handle: RePEc:liu:liucej:v:9:y:2012:i:2:p:305-330
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    Cited by:

    1. Simplice A. Asongu, Nicholas M. Odhiambo, 2021. "Taxation, foreign aid and political governance in Africa," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 18(2), pages 217-249, December.
    2. Asongu Simplice, 2014. "Taxation, foreign aid and political governance: figures to the facts of a celebrated literature," Working Papers of the African Governance and Development Institute. 14/022, African Governance and Development Institute..

    More about this item

    Keywords

    welfare state; social security; pension systems; financial crisis; institutional interactions;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • P10 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - General
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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