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The liberalisation of the German social model: public-private pension reform in Germany since 2001

The liberalisation of the German social model: public-private pension reform in Germany since 2001
The liberalisation of the German social model: public-private pension reform in Germany since 2001
Some commentators view reforms to the German political economy since the 1990s as constituting a broad liberalization of a previously coordinated market economy (eg Streeck 2009). Others argue that by maintaining protection for core workers the reforms represent a dualisation rather than liberalisation (eg Palier and Thelen 2010). This debate has paid little attention to public-private pension reform since 2001. This paper argues that pensions have been a crucial component of the German social model since 1957 and demonstrates why comprehensive analysis of its development must consider them. After summarising how public and occupational pensions have supported core German workers since 1957, the paper calculates core workers’ projected net pensions and those of less privileged employees before and after recent reforms. On this basis, it concludes that pension reforms have created a system more characteristic of a liberal than a dualised political economy. Since the reform the projected pensions of today's young workers are closer to the poverty line and the gap between the projected benefits of core and peripheral workers has narrowed. Increasingly, as young core workers age, they will thus have less incentive to invest in employer specific skills, a development that threatens the model as a whole.
0047-2794
37-68
Bridgen, Paul
6a2060f6-cbab-47d4-a831-ff82350055c9
Meyer, Traute
ee469bf0-ab32-43ac-9f25-1261c24123fe
Bridgen, Paul
6a2060f6-cbab-47d4-a831-ff82350055c9
Meyer, Traute
ee469bf0-ab32-43ac-9f25-1261c24123fe

Bridgen, Paul and Meyer, Traute (2014) The liberalisation of the German social model: public-private pension reform in Germany since 2001. Journal of Social Policy, 43 (1), 37-68. (doi:10.1017/S0047279413000597).

Record type: Article

Abstract

Some commentators view reforms to the German political economy since the 1990s as constituting a broad liberalization of a previously coordinated market economy (eg Streeck 2009). Others argue that by maintaining protection for core workers the reforms represent a dualisation rather than liberalisation (eg Palier and Thelen 2010). This debate has paid little attention to public-private pension reform since 2001. This paper argues that pensions have been a crucial component of the German social model since 1957 and demonstrates why comprehensive analysis of its development must consider them. After summarising how public and occupational pensions have supported core German workers since 1957, the paper calculates core workers’ projected net pensions and those of less privileged employees before and after recent reforms. On this basis, it concludes that pension reforms have created a system more characteristic of a liberal than a dualised political economy. Since the reform the projected pensions of today's young workers are closer to the poverty line and the gap between the projected benefits of core and peripheral workers has narrowed. Increasingly, as young core workers age, they will thus have less incentive to invest in employer specific skills, a development that threatens the model as a whole.

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e-pub ahead of print date: 29 October 2013
Published date: January 2014
Organisations: Sociology, Social Policy & Criminology

Identifiers

Local EPrints ID: 353787
URI: http://eprints.soton.ac.uk/id/eprint/353787
ISSN: 0047-2794
PURE UUID: aac40041-93d1-4331-b701-4f34072b38b6
ORCID for Paul Bridgen: ORCID iD orcid.org/0000-0001-6039-3254
ORCID for Traute Meyer: ORCID iD orcid.org/0000-0003-0767-8351

Catalogue record

Date deposited: 18 Jun 2013 10:29
Last modified: 30 Jan 2020 01:30

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Author: Paul Bridgen ORCID iD
Author: Traute Meyer ORCID iD

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