Reforming the welfare state in times of grey majorities: the myth of an opposition between younger and older voters in Germany.
| Verfasser | Goerres, Achim |
| Posten | Essay |
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This article deals with the electoral dynamics of ageing democracies with a special emphasis on Germany. It is the attempt to uncover a myth and to offer a more balanced perspective on the issue. The majority of all votes are cast by citizens aged 50 and older, and the imbalance continues to grow in favor of older voters. Older voters--so the assumption goes--have different material interests than younger voters and will vote accordingly. Therefore, welfare state reforms that change the level of senior entitlements become difficult to put through. The quotation given above is an example of that myth being put to instrumental use. The president of the VdK, a German social interest organization representing many pensioners, threatened the government with the electoral power of his constituency in order to prevent changes to the pension system considered too harmful to this constituency. This myth is also accepted as a basic assumption in a growing body of alarmist literature (Kotlikoff and Burns 2004; Wallace 1999). In economic writings, the assumption is so widespread that full-scale projections are being calculated as to when the last opportunity will be for pension reforms (International Monetary Fund 2004; Sinn and Uebelmesser 2002: 165). According to Sinn/Uebelmesser, Germany's pension system will become impossible to reform in 2016. According to the International Monetary Fund, the year "when the last train departs for pension reform" will be 2010. In contrast to that line of research, this article rejects the simplistic notion that changing material situations over the life cycle determine voting choices.
Methodologically, this article has a modest objective. I will primarily use evidence from the German context to refute a deterministic hypothesis that "growing numbers of older people lead to electoral antagonism between younger and older voters." Germany may be seen as a representative case of populous countries with a large number of older people and an advanced welfare state. Subsequently, I suggest arguments and evidence why the hypothesis does not hold. (1)
I argue that electorates are ageing, but that there is little evidence for contrasting political preferences of younger and older people in electoral politics. There is no antagonism between young and old that is being played out in the party arena. At most, I find different preferences on specific policy bundles that are rarely subject to a popular vote. These findings do not mean that reforming the German welfare state is not difficult in times of demographic change. Costly programs have to provide for more and more citizens. Still, the reforms will not be more difficult because of an electoral antagonism between young and old.
Section 1 gives an overview of the arguments that welfare politics in "older" democracies are more difficult than politics in other contexts. Sections 2 and 3 present evidence to the contrary. Section 2 demonstrates that the differences in voting behaviors between young and old in Germany are due to generational differences and not to life-cycle interests. Section 3 argues why age is unlikely to cause a political cleavage, meaning a politicized conflict line, in any context. Section 4 concludes the article.
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The potential for electoral blockades by older voters
There is a seemingly simple argument floating around in the discussion about welfare states and their reforms in ageing democracies. Older democracies have more older voters, and these voters are very likely to vote. Thus, the "older" a democracy gets, i.e. the more older voters there are, the more difficult it becomes to reform any policy system in a way that would be detrimental to older people. The simple assumption behind this thesis is that all "older voters" want the same things and behave in a self-interested manner to vote against any changes of policies that do not benefit them--with self-interest being defined in the material sense. According to this notion, policies that lead to more disposable income are preferred over policies that lead to lower levels of disposable income. What voters want is important for policymakers who intend to reform the welfare state. Voters tend to be mobilized more by the threat of losing things that they are entitled to than by the possibility of gaining something if they actively fought for it (Campbell 2003b; Weaver 1986). Therefore, the electoral arena is important for welfare-state policies and politics. The argument certainly has some credibility. There are a number of factors that are conducive to believing that an ageing electorate will pose a problem to welfare-state reforms in Germany: (1) the relatively large numbers of older voters, (2) older voters as beneficiaries of the welfare state, (3) evidence for life-cycle interests manifesting themselves in political preferences.
The relative number of older voters is on the increase in Germany. Between 1990 and 2005, the number of voters aged 50 and older who actually cast their vote rose from about 21.7 million to 24.1 million. In relative terms, the proportion of total numbers of votes cast by voters aged 50 and older went from 46.2 percent in 1990 to 49.7 percent in 2005 (own calculations with data in Namislo, Schorn, and von Schwartzenberg 2006; Werner 2003). We are thus currently very close to having a "grey majority," i.e., a majority of older voters.
The International Monetary Fund (2004: 166) projected the year in which some advanced industrial economies will reach their respective grey majorities. It pointedly highlighted these calculation results by entitling them with "the last train for pension reform departs in ..." According to these projections, Finland and Switzerland will be the first to reach that point in about 2010. Germany, France, and the USA will follow in 2015. The last country to cross that line will be the United Kingdom in 2040. According to another projection, Germany's last chance for pension reforms will be in 2016 (Sinn/Uebelmesser 2002). Thus, older voters--if they behaved in a uniform manner--could indeed soon skew the political process in their favor in many advanced welfare states.
European welfare states support older people. Many welfare states target their programs and the taxes/contributions to residents (or citizens) by age. For example in Germany, state subsidies for children are paid until they turn eighteen or finish their education (with a maximum of 25 years of age). Retirees who are in the public health system get the same quality of medical aid, but only pay a contribution to the state health system that is proportionate to their income from pensions, which are lower than wages. Also, many public services are cheaper for senior citizens who are older than 60.
Germany has a relatively generous welfare system for older people compared with other OECD countries. Its public spending on older people, defined as those aged 65 and older, is 70.7 percent of GDP per capita, compared to 91.4 percent in Austria and 37.0 percent in Australia. The ratio of public health spending between older and younger people is comparatively balanced. In 1994, it was 2.7, compared with 8.9 in the United States (1987) and 1.7 in Portugal (1993) (Lynch 2006: chap. 2).
The underlying life-cycle logic of welfare states draws on ideas of intergenerational solidarity and a rigid assumption about distinct stages along the life cycle. First, there is the education phase, then a phase of work and taxpaying, and finally the phase of retirement and economic inactivity. One receives more from the system during times of relative economic need (young age and old age) and pays into the system when one is relatively more capable of doing so (middle-age, working age). This logic is founded on a stable balance between age groups across time. A cohort, a group of individuals born in the same period, should go through all three phases in their lives as welfare state citizens and experience the same burden and levels of benefits as preceding cohorts. In an ageing society, this set-up can no longer work. Many...
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