First very preliminary draft – comments welcome

Retrenchment or social investments? The Great Recession, the European Union and Policies of

Austerity in EuropeJon Kvist

Centre for Welfare State ResearchUniversity of Southern DenmarkESPAnet 10th Annual conference

Edinburgh University 6-8 September 2012

Abstract

This paper argues that the agenda and policies of European welfare state reforms have changed fundamentally within the last dozen years. The paper offers a framework for macro-comparative analysis of social investments and returns. Using this framework the paper examines current developments in EU strategies and national welfare reforms undertaken and scheduled in view of ageing populations, the debt crisis, EU general demands and country specific recommendations. The analysis concerns reforms of early childhood education and care, life-long learning and active labour market policies as well as pension reforms. Based on up-to-date material from national experts and reports in these three areas the comparative analysis shows that most countries see different types of reforms. Permanent austerity, stagnation of productivity growth and ageing population is likely to further the direction of reforms, if, and when the economic crisis is over. The Nordic social investment model with an extensive childcare and early childhood education, free tertiary education and life-long learning and active labour market policies, and active ageing is no longer the blueprint for the European social model and national welfare reforms. The social costs of the crisis are likely to be long-lasting in terms of greater generational imbalances and less competitive and socially cohesive populations.

Introduction

Unprecedented welfare reforms have taken place over the last 12 years. The type, pace and scope of European welfare reforms intensified first towards expansion and most recently towards retrenchment and restructuring. Albeit varying widely between countries, most countries undertook the ambitious agenda in part formulated by the European Union (EU) of so reforming national welfare policies – a catch term for social, labor, family, education, health and tax policies – as to make more citizens active, active in production and active in reproduction. From 2000 to 2008 the agenda was one of consolidation of social insurance and in many countries also of expansion of services, albeit in childcare, employment services, long-term care and health services. However, this development may have come to an abrupt halt, at best, when the crisis hit Europe in 2008. In many countries the agenda of consolidation and expansion was even replaced by an agenda of retrenchment of both social insurance and services as governments try to balance budgets.

In the first expansionary period the rationale and policies of the Nordic welfare model was one source of inspiration. Especially elements of EU strategies to some extent reflected the Nordic welfare models aim of enabling individuals and groups to realize their full human potential, in particular that of participating in the labor market. The rationale is that participation is good both for the individual and for the community. Many policies aim to get people into work through formation, maintenance and utilization of skills. Children and youth, parents, employed and unemployed, sick-listed persons and persons with disabilities as well as migrants and immigrants are all legitimate target groups for such policy measures. Policies should not only ameliorate problems once they have occurred but also try to prevent such problems from happening in the first place. Many structural factors are significant for the individual’s life chances by shaping the conditions for his or her choices and adjustments. Basic conditions include when one was born, where one was born and who one’s parents are, conditions over which no person has any influence. In a EU context such concerns have resulted in policy recommendations of activating policies, including policies reconciling work and family life, flexicurity and pension reforms.

Historically social investments in welfare reforms have been left to national governments. The EU regulatory framework mainly regulated the coordination of migrant workers social rights and equal treatment but was often pushed forward by the European Court of Justice to gradually encroaching on mainland welfare state territory (Pierson and Leibfried 1995, Kvist and Saari 2007, Martinsen 20XX). In general, however, social investment goals and policies were left to national governments and in the EU to open methods of coordination on employment, education and social inclusion and social protection (de la Porte and Jacobsson 2012).

Today social investment goals and policies are to a certain extent reflected in the current EU2020 strategy of “Smart, sustainable and inclusive growth”. Four of the five headline targets relate to a social investment strategy when broadly defined, i.e.: Employment (75% of the 20-64 year-olds to be employed); Research & Development (RD) (3% of the EU's Gross Domestic Product (GDP) to be invested in R&D); Education (reducing school drop-out rates below 10%, at least 40% of 30-

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34–year-olds completing third level education), and; Poverty/social exclusion (at least 20 million fewer people in or at risk of poverty and social exclusion). These goals have been translated into indicators and into national targets. As part of the European Semester countries write national reform programs about how they meet previous years goals and work towards new ones.

At the same time as EU and national policy agendas became more ambitious in terms of social investment there has also been a marked shift in the EU coordination of economic policies brought about by the great recession.1

Many countries had bad public finances before the crisis, and few are not challenged today. Table 1 shows the development in the government deficits and debt as percentage of gross domestic product (GDP) in the EU countries where the Stability and Growth Pact (SGP) defines 3% deficit and 60% debt as the thresholds for good public finances. In 2000 using these criteria as yardsticks Greece, Portugal and Hungary had problems on both accounts and six more countries had larger debt, namely Italy, Belgium, Germany, Finland, France, Malta and Austria. As the crisis hit the number of countries with deficits above 3% of GDP immediately rose to twelve in 2008 over 22 countries in 2009 and 2010 and down to 17 countries in 2011.

---- TABLE 1 IN HERE - Government deficit/surplus and debt ----

Historically, many countries ran even large deficits and debts, but this is no longer feasible. Today, financial markets have repeatedly punished governments and countries not seen to be economically sustainable, politically reliable, or both by not buying their bonds. This pushes up interest rates up to high levels, what is known as the ‘sovereign risk premium’. In some countries the sovereign risk premium is formidable and may especially in situations of high public debt endanger the national economy.

The fear of high sovereign risk premiums, bankruptcy, EU country specific recommendations or direct requirements by international loan agencies make national governments put welfare reforms on the agenda in two ways that were unthinkable just a few years ago. First governments engage in EU coordination of finance policies that has earlier been seen as sacrosanct to national governments, namely that of tax and spending. Through still harder versions of the open method of coordination (OMC) with country specific recommendations and through crisis packages stipulating reform demands in exchange of financial assistance. With the Financial Act there are stricter limits on national public finances for the 25 of the 27 EU countries that signed the Act. To some extent the EU has taken action and diminished the problem of the sovereign risk premium by agreeing on the Financial act. However, with the Financial Act signatory countries also oblige themselves to stricter 1 We use the term ’great recession’ and ’crisis’ interchangeably. The term ‘crisis’ has many different meanings in academic disciplines and subject matters. We use ‘crisis’ in a Schumpeterian sense to mean exogenous chock, although we are acutely aware that many of the causes for the crisis are endogenous as private or public indebtedness, demographic changes and lack of earlier reforms of pension and labour markets.

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public finance criteria. The Stability and Growth Pact (SGP) criteria of debt of 60% and deficit of 3% of GDP are turned into, respectively, 60% but with a automatic mechanism of getting 1/20 off of the excessive debt pro anno, and 0.5% of GDP with the possibility of fines imposed by the European Court of Justice. Also independent monitoring of policies and collection of national statistics.

Second, governments design reforms tax and spending policies are key to welfare reforms and measures that involved higher taxation and lesser social spending were largely seen as unpopular and therefore secure of fundamental reforms. Also countries outside the Financial Act are under a much stricter fiscal regime as they fear high sovereign risk premiums.

Most of the studies in a rapidly growing body of ’crisis literature’ assess the crisis’ direct socio-economic or macro-economic impact. The majority of studies investigating the socio-economic impact are thus concerned with the direct effects of the crisis from rising unemployment and its distribution in sectors of the labour market and in different socio-economic groups on age, gender, skills, and migratory status. So far few studies have examined the changes at policy level and analyzed their consequences. In this paper we thus examine what may be called second-order or indirect effects of the crisis, i.e. how the crisis create policy responses that in turn have effects on individuals.

In particular this paper attempts to help clarify whether on-going policies constitute retrenchment or social investments – a dismantlement or development of the European social. To serve that purpose the paper has a theoretical and a empirical aim. Theoretically, the aim is to provide a conceptual framework for comparative macro-analysis of social investment policies and returns to better evaluate whether current cuts and policy reforms constitute retrenchment of social investment policies that may be detrimental also for future generations of Europeans. Empirically, the aim is to examine whether EU policy strategies and current welfare reforms follow a social investment approach. The focus is not so much on how much national governments are cutting or saving as part of austerity packages but rather what policies or austerity amounts to, retrenchments or social investments. We define retrenchment as policy changes that cut social expenditures in the short to medium term with no regard to skill formation, maintenance or utilization. We define social investments as policy changes bringing about mainly more or better creation, maintenance or use of skills.

In the next section, Method and data, we describe, first, the design of the study involving comparisons of social investment policies and returns over time of EU strategies and cross-nationally in three stages of the life course, and, second, the rationale for choosing nine indicators on social investments in children and youth, prime aged and older people to provide a valid and robust picture of recent policy trends. In the following section we set out the social investment approach as a framework for analysis. This framework is then applied in three sections each analyzing social investment policies in one stage of the life course, i.e. childhood and youth, prime age and old age. Finally, we discuss whether current policy developments indicate a development or a dismantlement of a Social Europe based on social investment strategy by comparing findings

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from the three analysis and situate these in the current European economic and demographic context.

Method and data

We investigate the nature and scope of recent EU strategies and reforms in Europe by comparing the situation and developments cross-nationally in the 27 EU member states. To examine whether the ageing populations and, especially, the great recession has a role in changing the nature of policies in austerity we compare the situation before and after the great recession which we for the sake of convenience set to start in 2008. Only by comparing the situation in the period before and after the crisis can we establish whether the recent developments constitute a continuation or change of course.

We investigate the changing nature of welfare reforms and their social effects by establishing a framework for analyzing social investment policies over the life course, for more details see next section. This framework highlights different types of social investment policies as well as their associated social and economic effects or returns.

We make results more robust by comparing the results of the analysis of policies and return at the different stages over the life cycle under the social investment approach, i.e. childhood and youth, prime age and old age. When examining results from only one stage we risk that the findings cannot be inferred more generally to recent reforms. The three stages also allow us to study policy issues that are at the core of the EU strategies dominant in the first half of the 2000s and in EU 2020. All the three stages encompass both benefits in kind and benefits in cash.

We use EU policy documents from the European Council and the European Commission to investigate whether the dominant discourse after 2000 promoted a social investment approach de facto although perhaps phrased and framed differently. To assess whether actual policy recommendations are expressions of cuts or investments we investigate the country specific recommendations in connection with national reform programs of the EU2020 strategy as well as the country specific recommendations that are part of the Excessive Deficit Procedure (EDP) under the SGP or Memorandums of Understanding (MoUs) linked to financial assistance packages given by the troika of the European Commission (EC), European Central Bank (ECB), and the International Monetary Fund (IMF). We use policy and statistical information from national experts, embassies, Eurostat, the EC as well as from national and international agencies to examine recent national policy changes and socio-economic development.

Measures of expenditures, outcomes and policy design each have their own particular advantages and drawbacks for the study of policy change and its effects. However, in times of crisis many of such conventional measures of social policy reforms and effects are of little use. Social expenditures as a share of gross domestic product (GDP) is a particularly bad measure in a time of crisis. The nominator, social expenditure, may rise because of higher unemployment and not better social policies or wellbeing. The denominator, GDP, may decrease because of worsened

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economic situation. In fact, there was a steep 6.5 % rise from 2008 to 2009 in per capita social protection expenditure that matched a 6.1 % drop in EU27 GDP (Eurostat 2012, Statistics in focus 14). What is more expenditure data also informs little about policy effects like the benefit adequacy and incentives or distributional outcome (Stiglitz et al. 2010).

Unfortunately, many outcome indicators are also ill-suited to study policies and their effects of crisis. First of all, many indicators have a time lag between policy change and effect and between the occurrence of phenomena and reporting. Secondly, many outcome indicators are conflated because they do not only measure effects of policy change but also other aspects like the effects of the economic crisis. Most measures of inequality are relative to a standard that is moving. When the economy goes astray the economic situation may deteriorate both for the population in target but also the general population and hence negative effects may not show up in the relative measures.

We have selected ten indicators to measure whether the social investment approach is gaining or loosing ground. The indicators have been chosen to see whether the EU is delivering on its promises of social progress by adopting a social investment approach or is just paying lip service. The indicators provide information on different aspects of the social investment approach such as skill creation and formation and skill maintenance and utilization in different life course stages.

There are three indicators for each life stage, two of which are on social investment policies and one indicator is on social investment returns or outcomes, see Table 2.

----- TABLE 2 – Indicators on social investment policies and return -----

We focus on benefits in three life course stages that serve to create, maintain and utilize skills. Child family policies may not only enhance gender equality and boost female labor supply without eroding fertility, but also prevent future social inequalities through stimulation of childrens’ social and cognitive skills and thereby contribute to a better economic foundation of future European societies. Life-long learning and active labour market policies may maintain skills and reskill workers to better match of labor demand and supply in a labour market with changing skill demands and thereby help reduce exclusion from and segmentation in the labor market. Pension and long-term care for the old aged may encourage more elderly being active in the labor market for a longer part of their lives and to use their resources also in retirement.

The social investment approach to welfare reform

The new turn in early 21st welfare reforms reflect to a large extent, we will argue, a Nordic perspective on welfare policies as not only being about expenditures and compensation, but also investments in human capital and risk-promoting measures (Kvist, Fritzel, Hvinden and Kangas 2012). By whom, where and when you are born matters for your life chances. This implies a loss of human capital among those unfortunate to be born with a socially less privileged background, in economic dire times, in areas of social or economic disarray, or, as is often the case, in a combination of the three. Reducing social inequalities may in many

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instances be cost effective, i.e. there is not a trade-off between equity and efficiency (Esping-Andersen 2009, Stiglitz 2012).

There are two constitutive dimensions to the social investment strategy, the inputs or social investment policies and the outputs or the returns of social investment policies, see Figure 1. A third dimension relates to the mechanisms, mainly on the micro-level, through which policies creates the skill and their best possible usage. The social investment strategy takes into account that human capital is produced over the life cycle by families, firms and various state interventions.

The social investment approach therefore spans a range of policies over the life cycle, see Figure 1. In early childhood childcare and pre-school education make up an important part of social investment as succeeding policies rests on the cognitive skills learned in these formative years. For youth primary, secondary and tertiary education provides general and more specific skills. Two distinct policy packages targets prime age adults. The first package of childcare and social care serves to allow carers to partake in the labour market. The second package of life-long learning and active labour market policies updates skills to accommodate changing labour demands. In old age various policies under the term active ageing aims to enable the elderly make to use their resources and skills in the labour market and in society more generally.

Figure 1. A life course perspective on social investment policies and their returns

Rate of return

Cognitive Social Cognitive Returns

Qualifications

Participation in labour market

Early childhood education and care Parental leave and family allowances

Reproduction

Participation in labour market

Participation in labour marketHealth and self-caring

Policies

Primary and secondary education

Care for children and elderly

Tertiary education, life-long learning, ALMP

Home help, health care

Life course

Childhood Youth Prime age Old age

Both the scope and type of returns on social investment policies differ over the life course, see Figure 1. As for other investments the rate of return tend to be larger the longer the span to benefit from investments.

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For example, childcare may give larger returns than rehabilitation of older workers. In the early years returns are mainly cognitive and social in nature and the size of the return is vast as there are many years in which yields can be made. Formal qualifications are acquired in the educational system and for adolescents in parallel with vocational training systems in most countries. Care for children and elderly does not per se give new qualifications to prime age adults with care dependent children and elderly, but allows these traditional carers to reconcile family life with work and thereby provide returns in terms of both production and reproduction.

Finally, Figure 1 shows the dynamic nature of the social investment strategy. Skills acquired in one stage of the life course gives the fundament for the further formation of skills or their use in the next stage of the life course (reference to Heckmann). With early cognitive skills the fundament is established for learning over the rest of the life (reference). The cognitive and formal qualifications acquired during childhood and youth hopefully meet skill demands in the labour market where returns are also given a monetary form in terms of revenue to the exchequer and various insurance and saving schemes. Encompassing labour markets and active ageing policies contributes to fewer early exits and better health status among elderly reducing the need and costs of social care and health care.

In the next three sections on respectively, childhood and youth, prime age, and old age, we use this framework to analyse developments of, first, EU policy strategies and, second, national policy reforms.

Childhood and youth

Skills are created both by family and societal institutions. Children benefit from their families and hence policies to allow child-parent interaction are important. Policies supporting family investments in children’ cognitive and social skills are chiefly parental leave and child family allowances, but they will not be touched upon here (in this version of the paper). Instead we focus on state subsidized investments in children where childcare and early education guaranteed by the state is important for the creation of human capital (Heckman REF).

At the Barcelona 2002 Summit the EU Member States agreed to ‘remove disincentives to female labour force participation and strive, taking into account the demand for child care services and in line with the national patterns of childcare provision, to provide childcare by 2010 to at least 90% of children between 3 years old and the mandatory school age and at least 33% of children under 3 years of age’ (European Council 2002). This line of thinking continues in the EU2020 strategy. The Education and Training 2020 strategy's headline target is to increase the share of children participating in pre-primary education (measured as those between 4 years old and the age for starting compulsory primary education) to at least 95% in 2020.

The effects are mainly social and cognitive in nature laying the ground for future learning. Because skill demands are increasing and because skill formation is dynamic with any learning starting and taking into account

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the cognitive capacity at the level, the importance of childcare and early childhood education cannot be overestimated.

From the adoption of the Barcelona target in 2002 on childcare coverage, it took a little time to get comparable statistics based on EU SILC. Table 3 shows the development between the start of the time series in 2005 and 2010 for children that are cared for formally for more than 30 hours per week when they are aged 3 to minimum compulsory school age.

---- TABLE 3 - Formal childcare for children ----

Childcare increased almost everywhere in the 2000s. Two countries stand out. Late comer Germany expanded full-time coverage from 26 percent in 2005 to 46 percent in 2010 whereas Greece early experienced a marked drop from 34 percent in 2005 over 26 percent in 2008 to 22 percent in 2010. Belgium, Bulgaria and Latvia also see a marked decrease after the financial crisis.

Many countries recorded a conversion from part-time to full-time care as well. Although doubling its coverage from 7 percent full-time coverage to 15 percent, the Netherlands is together with Ireland the only EU countries that have less than 20 percent full-time coverage. Both countries still have significant part-time coverage (Eurostat 2012, Formal childcare). Denmark and Sweden were the only countries meeting the Barcelona target of 90% childcare coverage with Estonia at 84% getting close. However, many countries are catching up rapidly (although the highest increases are reported in countries where data is deemed as unreliable).

Whereas childcare coverage so far does not show dramatic downslides except in four countries – Belgium, Bulgaria, Latvia, and Ireland - it must be recalled that childcare coverage only measures but one dimension of social investment. The coverage rate does not say anything about the distribution of childcare. In general one can expect returns of childcare for all children, but the largest returns for the public exchequer may be in investments for children from dysfunctional families that are a determinant for child participation in crime and other costly pathological behaviors (Heckman and Masterov 2006).

Also coverage does not show anything about the quality of formal childcare services where expansion is likely to have taken place in recent years on the backdrop of higher child-to-staff ratios.

As local governments often responsible for formal care arrangements are squeezed financially and unable to resort to debt financing as stricter fiscal monitoring is installed as part of the financial pact then childcare is likely to be targeted for reforms. Local governments may ask for higher user fees, close down programs or lower quality so that childcare becomes inaccessible or unattractive. In all cases the social impact will affect less privileged groups more than privileged groups.

Table 4 shows the share of the population aged 4 to the age when the compulsory education starts who is participating in early education. This indicator measures the Education and Training 2020 strategy's headline target to increase the share of children participating in pre-primary education to at least 95% in 2020.

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---- TABLE 4 – Participation in early childhood education ----

Despite few countries meeting the Barcelona target the social investment approach is to some extent present in the EU2020 strategy. The new strategy changed the age group from 3 years to 4 years of age and the title changed from ‘childcare’ to ‘early childhood education.’ However, the result is a watering out of the ambitious level of the EU social investment strategy as micro-level research has that, as a rule of thumb, “the earlier interventions are made, the better results” (Heckman and Masterov 2006). The less ambitious measure make many countries with familialistic traditions and orientations in policies look better. Former outliers, Ireland and the Netherlands, are now firmly in the group with coverage rates above 85% and where the Dutch rate meets the EU2020 goal of 95% coverage. The EU27 has moved clover to its goal from 85.2% in 2000 to 92.3% in 2010. The largest increases are found in Cyprus, Latvia, Lithuania, Finland, Poland, Germany, Sweden and Portugal. Only Malta and Estonia see marked reductions in the first crisis years from 2008 to 2010.

The returns on childcare and early childhood education are cognitive and social in nature. The return may be measured by indicators on skills as in PISA (CHECK) or school drop outs. For youth the EU2020 headline target on education is indeed to reduce school drop outs and to increase the share of youth in education. Between 200X and 200Y school drop outs fell by xx percentage in the EU 27 (Eurostat 2012, REF). Here we focus on youth in danger of being marginalized from economic and social life as the crisis has been particularly hard felt by youth. The youth unemployment rate rose from 15.5% to XX% between 2008 and 2011 (EUROSTAT 2012 REF). The inactivity rate rose from 55.6% to xx.yy%. If youth went into education this would be consistent with the social investment approach. However, this is only the case for some (see next section). For EU27 the share of 15 to 24 year olds neither in education, employment or training rose by 2.8 percentage points from 2008 to 2011, see Table 5.

---- TABLE 5 – Young people not in employment, education or training ----

The crisis had a dramatic impact on youth becoming more excluded from society. Although we have no comparable data for the period prior to the crisis Table 5 shows a marked increase for youth not in employment, education nor training in almost all countries. The PIIGS countries (Portugal, Italy, Ireland, Greece and Spain) are worst off followed by the United Kingdom and the Baltic countries. About one of four youth are now out of work in Bulgaria, Italy, Greece, Ireland and Spain. Germany, and to a lesser extent, Slovenia, Austria and Sweden, are the only countries reporting a decrease. With one in six youth out of work, education and training the EU social investment strategy has along way to go. Only five countries - The Netherlands, the Luxembourg, Austria, Denmark and Slovenia – have less than one in ten youth out of work, education and traning.

Prime age

For adults of prime age two types of social investment policy packages are discernible. The policy package concerned with reconciling work and

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family life is in part covered by the analysis of childcare above, since childcare is an important element in this package.

In this section we focus on the second policy package for adults directed at their further education, namely tertiary education, life-long learning and active labour market policies. Tertiary education concerns creation of human capital. The EU2020 strategy has a target of 40% taking a university education with considerable variation in national targets varying from 26 percentages in Italy to 60 percentages in Ireland. Table 6 shows wide cross-national differences in the extent to which tertiary education has been achieved with only one in five having a university degree in Italy and Romania compared to one in two in Ireland.

Almost all countries have expanded tertiary education markedly. Seventeen of the EU27 countries have double-digit increases with Luxembourg, Poland and Ireland standing out with more than 20 percentage point increases, see Table 6 for the development in tertiary education from 2000 to 2011. Only five countries have small increases: Greece and Austria from a low level, Lithuania and Finland from a high level and Germany from a medium level.

---- TABLE 6 - Tertiary educational attainment ----

The expansion in tertiary education continued after the crisis in 2008. There is a standstill or a slight reduction in only seven countries. This rise may come as little surprise considering youth have a strong incentive to take further education in times of economic crisis and lack of demand on their labour. Having qualifications is indeed a necessary part of a social investment strategy but is not sufficient for the returns to materialise. For that also a demand for qualifications is needed.

Life-long learning aims to up- and re-skill workers in view of changing labour markets and technologies. For life-long learning the EU2020 strategy has a target of 15 percentage receiving training over a one-month period. Only six countries meets the target now, see Table 7. Almost one in three Danish workers receive training, one in four Finns and Swedes, one in six Dutch, Slovenians and Brits. With less than one in ten workers receiving training there are ten countries that are far from the target.

---- TABLE 7 - Life-long learning ----

Country developments for life-long learning are very diverse. There are no signs of life-long learning progressing along a similar trajectory as we have seen for the other policy programmes. In other words, there has been no sign of life-long learning becoming a part of a European social investment strategy prior to the crisis nor are there any shared crisis response in life-long learning policies.

---- TABLE 8 – Fertility rates ----

Demographic changes are taking place at a unprecedented level. Ten years of incremental increases of fertility in most EU countries were abruptly stopped and in some cases reversed in 2008. Fertility is driven to a large extent by economic developments, as well as policies like leave schemes and child family allowances (OECD 2011).

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Old age

The social investment perspective in old age is about maintaining and using skills the skills of elderly most notably in the labour market but also in society more generally. In this regard pension reforms and other reforms making working life longer vis-à-vis time spent in retirement are key for the use of skills. Long-term care and especially activating policies for elderly are important for the maintenance of skills, not only occupational, but also physical and psychological skills or health to reduce costs of social services and health care.

Old age pensions make up the biggest single expenditure item in all EU 27 countries. With ageing populations it is no surprise that pension reform is crucial for the sustainability of the European social model. Although there is no quick, cheap and effective way of safeguarding the European welfare states, a second best solution seem to be a rise in retirement ages of those already in work. Quick to the extent changes are made to come into effect fast. Cheap in that it requires legal change and no larger investments in skill formation or maintenance. Effective in that public finances are improved both in less expenditure on pension and in more revenue in taxation and social security contributions. On this background it may come as less of a surprise that pensioners, especially coming pensioners, are bearing the costs of this in the name of ‘sustainability’.

The challenge of ageing populations predates the great recession. Many European countries were discussing especially old age pension reforms already in the early 1990s and in fewer countries like Germany and Sweden also deciding on pension reforms. In 2001 the Stockholm European Council decided on a strategy on how to cope with the economic challenges linked to an ageing population. The Council (2001) encouraged Member States to:

reduce debt at a fast pace; raise employment rates and productivity, and; reform pensions, health care and long-term care systems.

The OMC Social Protection advocates pensions systems to provide adequate, sustainable and modern benefits. Adequate means benefits preventing a life in poverty, sustainable means that the benefits are sustainable and modern that elderly people earn their own rights and not as dependents. However, the OMC Social Protection is a soft method of coordination and thus leaves governments to decide themselves how they try to ensure these goals.

The soft method of coordination also prevails in campaigns like when the European Union has designated 2012 as the European Year for Active Ageing and Solidarity between Generations which aims to:

help create better job opportunities and working conditions for the growing numbers of older people in Europe;

help them play an active role in society, and; encourage healthy ageing and independent living.

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Seen in a social investment perspective the OMC Social Protection and the promotion of active ageing and solidarity between generations argue for higher retirement ages which is in line with the idea of expanded the period of returns. But as mentioned earlier these are soft policy instruments.

However, harder versions of the soft method of coordination are paving their way into old age policies through the coordination of economic policies, see below.

Already before the crisis many countries like Sweden and Germany had adopted pension reforms. However, as part of the crisis response all countries have been recommended to adopt pension reforms or to advance their start. Table 9 shows that alone in 2010 and 2011 a series of countries decided to change their retirement age, make later retirement more attractive or to advance the start of already decided reforms. The policy focus at both national and the EU level has been in particular to rise de facto retirement by increasing retirement ages and by closing down early exit possibilities.

---- TABLE 9 – Pension reforms -----

The active ageing approach aims to enable elderly to take part in society through investments in their capabilities. Table 10 (not in this version of the paper) shows recent examples of policies in long-term care aimed at a more active life for elderly.

----- TABLE 10 – Long-term care -----

All countries have seen a rise of average exit ages. Before the crisis many countries had adopted pension reforms with higher retirement age, closed options of early exit or improved possibilities for employment for older workers. Table 11 shows the development in the average exit age from the labour force from 2001 to 2010. Even though there are still marked differences in the average exit age from 58.8 years of age in Slovakia to 64.4 years in Sweden all countries rise their average exit age in the period. This is independent of the starting point. The rise in Sweden from 62.1 years in 2001 to 64.4 years in 2010 shows that there is still large potential of rising the labour force participation in almost all countries.

---- TABLE 11 - Average exit age from the labour force ----

As pension reforms kicks becomes implemented in still more countries retirement ages are likely to increase, although dampered by possible rises in exit of old aged in other benefit schemes. Most notably the reaction in pension reforms has not been one of labour shedding by easier access to early exit schemes as was a dominant strategy in many countries in earlier crisis (Ebbinghaus 2006). The long term effect of the pension reforms will in most countries indeed be more sustainable pension system with later retirement on average for most coming generations of old age pensioners and with reduced generosity for some of these.

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Concluding remarks

Together ageing populations, the great recession and the EU Finance Act puts European national welfare reforms high on the agenda and with less room for discretion in public finance policies compared to earlier. Requirements to improve public finances, mostly framed in terms of reduced public expenditures, lead to welfare reforms. Social expenditure is the single-biggest expenditure item on national public budgets. Add health, education and labour market expenditures and there will be few countries that can leave their national welfare system unreformed. In this paper we have examined whether policy changes so far have amounted to retrenchment or social investments.

The analysis of social investments in childhood suggests that the crisis so far has not resulted in cuts in places in childcare or early childhood education when measured by their coverage rates. Five countries see large decreases in either childcare or early childhood education, but the general trend is one of expansion of coverage. The present evidence, however, does not allow us to assess the development in the quality of care and education. Quality is likely to have gone down in most countries as economic resources may have gone down at the same time as intakes of children went up. To the extent this is the case children are likely to obtain less social and cognitive skills thereby hampering their educational achievements and labour market performance later in life.

The analysis of social investments in youth showed that a large and growing share of European youth is not in employment, education or training. Germany and, less so, Luxembourg were the only two countries experiencing a falling share of youth becoming marginalized from society. In the most crisis ridden countries between one in five and one in four youth are neither using their skills in work or creating or maintaining their skills through education or training. This points towards a large share of a generation being lost.

The analysis of social investments in prime age indicates a marked increase of tertiary education in almost all countries both before and after the crisis occurred. Increasing shares of young people take tertiary education which means not only that the EU2020 strategy of 40% with tertiary education is likely to be met but also more people with more skills which bodes well for the future. However, the maintenance of skills through life-long learning does not follow a similar upward going trajectory as for tertiary education. Indeed large cross-national variation and divergent developmental trend point to no particular shared European strategy on the national level and it is very unlikely that the EU2020 target of 15% with life-long learning will be met.

The analysis of social investments in old age indicate that the crisis response in pension reforms differ from previous responses in economic downturns. Compensating losers of globalization with social benefits is no longer used. The analysis shows that the compensation strategy has been replaced by a social investment inspired approach already in the early 2000s at the EU level and that pension reform has or is about to be realized in all countries emphasizing and realizing later retirement.

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The three analyses indicate that the impact of the crisis differs across policies and life stages. In some cases the crisis seem to have little impact as in the continued expansion of childcare and early childhood education or even a positive impact as when more youth takes tertiary education. For youth and prime aged the crisis leads to a continuation, and in some countries even a stronger, polarization or dualization between low and high skilled youth as larger shares of youth dot not get work, employment and training and larger shares get tertiary education. For old age the crisis has led to pension reforms that unequivocally aims to higher retirement ages, which may have been on the agenda or adopted before the crisis, but which after the crisis has been tightened or advanced in time.

Even when the crisis resides its effects will continue to be felt for years to come in part due to the current policies of austerity. Our analysis points to two types of long-term effects, namely cohort effects and intergenerational effects. Cohort effects occur because the great recession combined with lower benefits, more ineffective employment policies and a large share of youth outside work, education and training make the young cohort poorer and with smaller life-income than would have been the case without the crisis. The implications are fewer returns on social investments in this generation and thus a worsening of the national public finances and social cohesion.

Intergenerational effects occur because the great recession and less favorable child family policies result in lower fertility and thus smaller future generations of potential workers laying the ground for intergenerational conflicts.

There are at least two sets of contextual factors having a great say on the impact of social investment policies, namely demographic and economic factors. Demographically we witness how the intra-EU migration from East to West since 2004 is increasingly supplemented by South-North migration. Especially youth moves from the South to countries with better employment prospects. Again those mobile tend to be among the best skilled leading to a depletion of skills in sending countries and more skills in the receiving countries. Put differently the social investments made in Southern parts of Europe makes returns in Northern parts of Europe. Migration highlights the importance of labour market developments.

Changes in the labour market have implications for skills policies. Already before the crisis new jobs were in many countries concentrated in high or low pay levels primarily in the service sector. The crisis led to marked destruction of medium-paid jobs in construction and manufacturing and new jobs were still more demanding. Increasing skill demands coupled with fewer investments in skills signals greater future inequalities and less competitive and socially cohesive societies.

References

De la Porte, Caroline and Kerstin Jacobsson (2012). Social investment or recommodification? Assessing the employment policies of the EU member states. In: Nathalie Morel, Bruno Palier and Joakim Palme (eds.), Towards

15

a social investment state? Ideas, policies and challenges. Bristol: Policy Press, pp. 117-152.

Ebbinghaus, Bernhard (2006). Reforming Early Retirement in Europe, Japan and the USA, Oxford: Oxford University Press.

European Council (2001) Council Conclusions Stockholm 2001.

European Council (2002) Council Conclusions Barcelona 2002.

European Council (2012) Conclusions June 28-29, Brussels.

Esping-Andersen, Gøsta (2009). The Incomplete Revolution: Adapting to women’s new roles. Cambridge: Polity Press.

Eurostat (2012). Various statistics. (to be referenced systematically when last references are made in main text).

Heckman, James and Dimitriy V. Masterov (2006). “The Productivity Argument for Investing in Young Children”, Early Childhood Research Collaborative Discussion Paper, August.

European Commission and Economic Policy Committee (2012). The 2012 Ageing Report: Economic and budgetary projectionsfor the EU27 Member States (2010-2060), European Economy Brussels: European Commission.

Kvist, Jon and Juho Saari (eds.) (2007). The Europeanisation of Social Protection. Bristol: Policy Press.

Kvist, Jon, Johan Fritzell, Bjørn Hvinden and Olli Kangas (eds.) (2012). Changing Social Inequality: Nordic welfare states in the 21st century. Bristol: Policy Press.

Leibfried, Stephan and Paul Pierson (eds.) (1995). European Social Policy: Between Fragmentation and Integration, Washington, DC: Brookings Institution.

Morel, Nathalie, Bruno Palier and Joakim Palme (eds.) (2012). Towards a social investment state? Ideas, policies and challenges. Bristol: Policy Press.

OECD (2011). Doing Better for Families. OECD: Paris.

Stiglitz, Joseph E., Amartya Sen and Jean-Paul Fitoussi (2010). Mismeasuring our lives. Why GDP doesn’t add up, New York: The New Press.

Stiglitz, Joseph E. (2012). The Price of Inequality: How today’s divided society endangers our future, New York: W.W.Norton.

Tables to be inserted

Table 1. Government deficit/surplus and debt, percentage of GDP, 2007-2011.

Deficit/surplus Debt

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2007 2008 2009 2010 2011

2007 2008 2009 2010 2011

EU 27 -0.9 -2.4 -6.9 -6.5 -4.5 59.0 62.5 74.8 80.0 82.5Belgium -0.1 -1.0 -5.6 -3.8 -3.7 84.1 89.3 95.8 96.0 98.0Bulgaria 1.2 1.7 -4.3 -3.1 -2.1 17.2 13.7 14.6 16.3 16.3Czech Republic

-0.7 -2.2 -5.8 -4.8 -3.1 27.9 28.7 34.4 38.1 41.2

Denmark 4.8 3.2 -2.7 -2.5 -1.8 27.1 33.4 40.6 42.9 46.5Germany 0.2 -0.1 -3.2 -4.3 -1.0 65.2 66.7 74.4 83.0 81.2Estonia 2.4 -2.9 -2.0 0.2 1.0 3.7 4.5 7.2 6.7 6.0Ireland 0.1 -7.3 -14.0 -31.2 -

13.124.8 44.2 65.1 92.5 108.2

Greece -6.5 -9.8 -15.6 -10.3 -9.1 107.4 113.0 129.4 145.0 165.3Spain 1.9 -4.5 -11.2 -9.3 -8.5 36.3 40.2 53.9 61.2 68.5France -2.7 -3.3 -7.5 -7.1 -5.2 64.2 68.2 79.2 82.3 85.8Italy -1.6 -2.7 -5.4 -4.6 -3.9 103.1 105.7 116.0 118.6 120.1Cyprus 3.5 0.9 -6.1 -5.3 -6.3 58.8 48.9 58.5 61.5 71.6Latvia -0.4 -4.2 -9.8 -8.2 -3.5 9.0 19.8 36.7 44.7 42.6Lithuania -1.0 -3.3 -9.4 -7.2 -5.5 16.8 15.5 29.4 38.0 38.5Luxembourg 3.7 3.0 -0.8 -0.9 -0.6 6.7 13.7 14.8 19.1 18.2Hungary -5.1 -3.7 -4.6 -4.2 4.3 67.1 73.0 79.8 81.4 80.6Malta -2.4 -4.6 -3.8 -3.7 -2.7 62.3 62.3 68.1 69.4 72.0Netherlands 0.2 0.5 -5.6 -5.1 -4.7 45.3 58.5 60.8 62.9 65.2Austria -0.9 -0.9 -4.1 -4.5 -2.6 60.2 63.8 69.5 71.9 72.2Poland -1.9 -3.7 -7.4 -7.8 -5.1 45.0 47.1 50.9 54.8 56.3Portugal -3.1 -3.6 -10.2 -9.8 -4.2 68.3 71.6 83.1 93.3 107.8Romania -2.9 -5.7 -9.0 -6.8 -5.2 12.8 13.4 23.6 30.5 33.3Slovenia 0.0 -1.9 -6.1 -6.0 -6.4 23.1 21.9 35.3 38.8 47.6Slovakia -1.8 -2.1 -8.0 -7.7 -4.8 29.6 27.9 35.6 41.1 43.3Finland 5.3 4.3 -2.5 -2.5 -0.5 35.2 33.9 43.5 48.4 48.6Sweden 3.6 2.2 -0.7 0.3 0.3 40.2 38.8 42.6 39.4 38.4United Kingdom

-2.7 -5.0 -11.5 -10.2 -8.3 44.4 54.8 69.6 79.6 85.7

Source: Eurostat (2012) Government deficit/surplus. debt and associated data.

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Table 2. Indicators of social investment policies and returns.

Childhood and youth Prime age Old agePolicy Childcare coverage Tertiary education PensionsPolicy Childcare and early

educationLife-long learning Long-term care?

Return Young people not in employment and not in any education and training

Fertility Average exit age

Table 3. Formal child care for children aged 3 years to minimum compulsory school age, child care 30 hours or more weekly, percentage of all children in the same age group, 2005-2010.

2005 2008 2010

EU 27 .. 43 45Belgium 48 74 63Bulgaria 531) 61 50Czech Republic 40 36 39Denmark2) 95 97 98Germany 26 36 46Estonia 69 84 86Ireland 14 13 17Greece 34 26 22Spain 40 45 50France 39 44 47Italy 70 72 70Cyprus 38 44 46Latvia 60 67 59Lithuania 46 55 58Luxembourg 113) 233) 37Hungary 49 52 65Malta 233) 49 49Netherlands 7 12 15Austria 16 20 26Poland 22 27 32Portugal 183) 69 68Romania .. 17 173)

Slovenia 67 72 77Slovakia 57 53 64Finland2) 69 73 73Sweden2) 95 97 97United Kingdom 24 20 22Sources: Eurostat (2012), Formal child care by duration and age group. Nordic countries: NOSOSKO (2009, 2011). Notes: 1) 2005. 2) Nordic information for 3-5 year olds. 3) Unreliable data according to Eurostat.

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Table 4. Participation in early childhood education, percentage share of the age group between 4-years-old and the starting age of compulsory education, 2000-2010

2000 2005 2008 2009 2010EU27 85.2 88.1 91.2 91.7 92.3Belgium 99.1 100.0 99.5 99.3 99.1Bulgaria 73.4 82.5 78.4 78.5 79.2Czech Republic 90.0 94.4 90.9 90.0 88.7Denmark 95.7 91.8 91.8 91.9 91.1Germany 82.6 86.6 95.6 96.0 96.2Estonia 87.0 98.7 95.1 95.7 89.8Ireland .. .. .. .. 85.4Greece 69.3 70.8 70.2 .. 73.5Spain 100.0 99.8 99.0 99.3 99.4France 100.0 100.0 100.0 100.0 100.0Italy 100.0 100.0 98.8 98.2 97.1Cyprus 64.7 74.7 88.5 86.4 87.7Latvia 65.4 87.7 88.9 89.6 87.4Lithuania 60.6 71.3 77.8 79.6 78.3Luxembourg 94.7 94.8 94.3 94.6 94.6Hungary 93.9 93.9 94.6 94.8 94.3Malta 100.0 94.4 97.8 93.9 89.0Netherlands 99.5 73.4 99.5 99.5 99.6Austria 84.6 87.5 90.3 91.3 92.1Poland 58.3 62.1 67.5 70.9 76.3Portugal 78.9 86.9 87.0 88.2 89.3Romania 67.6 81.2 82.8 82.3 82.1Slovenia 85.2 86.6 90.4 91.3 92.0Slovakia 76.1 79.7 79.1 77.9 77.5Finland 55.2 66.9 70.9 71.9 73.1Sweden 83.6 92.8 94.6 94.7 95.1United Kingdom 100.0 91.8 97.3 97.3 96.7Source: Eurostat (2012) Participation in early childhood education.

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Table 5. Young people aged 18-24 not in employment and not in any education and training, percentage share, 2008-2011

2008 2009 2010 2011EU 27 13.9 16.1 16.5 16.7Belgium 13.3 14.5 14.3 14.8Bulgaria 21.6 24.0 27.8 27.9Czech Republic 8.9 11.2 11.4 10.6Denmark 5.7 7.0 8.3 8.4Germany 11.8 12.1 11.4 10.2Estonia 11.1 19.4 19.1 14.7Ireland 17.4 23.1 24.0 23.9Greece 15.9 17.3 20.6 24.4Spain 17.0 22.6 22.4 23.1France 13.5 16.5 16.3 15.9Italy 20.7 22.4 24.2 25.2Cyprus 13.4 14.6 16.7 20.7Latvia 13.9 21.8 22.5 19.3Lithuania 12.3 16.9 18.2 16.8Luxembourg 8.6 7.5 6.9 6.5Hungary 15.3 17.9 16.5 17.7Malta 8.5 11.0 10.7 11.7Netherlands 4.6 5.6 5.8 5.0Austria 8.7 9.5 8.8 8.3Poland 12.3 13.8 14.5 15.5Portugal 12.7 13.9 14.8 16.0Romania 13.4 16.5 20.0 20.9Slovenia 7.9 9.2 8.9 8.8Slovakia 14.4 16.6 18.6 18.2Finland 9.9 12.9 12.5 11.7Sweden 10.7 13.1 10.6 10.3United Kingdom 15.4 17.1 17.7 18.4Source: Eurostat: Young people aged 18-24 not in employment and not in education by age and sex and NUTS.

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Table 6. Tertiary educational attainment, percentage share of age group 30-34, 2000-2011.

2000 2005 2008 2009 2010 2011EU27 22.4 28.0 31.0 32.2 33.5 34.6Belgium 35.2 39.1 42.9 42.0 44.4 42.6Bulgaria 19.5 24.9 27.1 27.9 27.7 27.3Czech Republic 13.7 13.0 15.4 17.5 20.4 23.8Denmark 32.1 43.1 39.2 40.7 41.2 41.2Germany 25.7 26.1 27.7 29.4 29.8 30.7Estonia 30.8 30.6 34.1 35.9 40.0 40.3Ireland 27.5 39.2 46.1 48.9 49.9 49.4Greece 25.4 25.3 25.6 26.5 28.4 28.9Spain 29.2 38.6 39.8 39.4 40.6 40.6France 27.4 37.7 41.2 43.2 43.5 43.4Italy 11.6 17.0 19.2 19.0 19.8 20.3Cyprus 31.1 40.8 47.1 44.7 45.1 45.8Latvia 18.6 18.5 27.0 30.1 32.3 35.7Lithuania 42.6 37.9 39.9 40.6 43.8 45.4Luxembourg 21.2 37.6 39.8 46.6 46.1 48.2Hungary 14.8 17.9 22.4 23.9 25.7 28.1Malta 7.4 18.4 20.9 21.0 21.5 21.1Netherlands 26.5 34.9 40.2 40.5 41.4 41.1Austria .. 20.5 22.2 23.5 23.5 23.8Poland 12.5 22.7 29.7 32.8 35.3 36.9Portugal 11.3 17.7 21.6 21.1 23.5 26.1Romania 8.9 11.4 16.0 16.8 18.1 20.4Slovenia 18.5 24.6 30.9 31.6 34.8 37.9Slovakia 10.6 14.3 15.8 17.6 22.1 23.4Finland 40.3 43.7 45.7 45.9 45.7 46.0Sweden 31.8 37.6 42.0 43.9 45.8 47.5United Kingdom 29.0 34.6 39.7 41.5 43.0 45.8Source: Eurostat (2012) Tertiary educational attainment.

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Table 7. Life-long learning, percentage share of 25-64 year old who received training in the preceding four week period, 2000-2011.

2000 2005 2008 2009 2010 2011EU27 7.1 9.6 9.4 9.3 9.1 8.9Belgium 6.2 8.3 6.8 6.8 7.2 7.1Bulgaria .. 1.3 1.4 1.4 1.2 1.2Czech Republic .. 5.6 7.8 6.8 7.5 11.4Denmark 19.4 27.4 29.9 31.2 32.5 32.3Germany 5.2 7.7 7.9 7.8 7.7 7.8Estonia 6.5 5.9 9.8 10.5 10.9 12.0Ireland .. 7.4 7.1 6.3 6.7 6.8Greece 1.0 1.9 2.9 3.3 3.0 2.4Spain 4.5 10.5 10.4 10.4 10.8 10.8France 2.8 5.9 6.0 5.7 5.0 5.5Italy 4.8 5.8 6.3 6.0 6.2 5.7Cyprus 3.1 5.9 8.5 7.8 7.7 7.5Latvia .. 7.9 6.8 5.3 5.0 5.0Lithuania 2.8 6.0 4.9 4.5 4.0 5.9Luxembourg 4.8 8.5 8.5 13.4 13.4 13.6Hungary 2.9 3.9 3.1 2.7 2.8 2.7Malta 4.5 5.3 6.3 6.1 6.2 6.6Netherlands 15.5 15.9 17.0 17.0 16.6 16.7Austria 8.3 12.9 13.2 13.8 13.7 13.4Poland .. 4.9 4.7 4.7 5.3 4.5Portugal 3.4 4.1 5.3 6.5 5.8 11.6Romania 0.9 1.6 1.5 1.5 1.3 1.6Slovenia .. 15.3 13.9 14.6 16.2 15.9Slovakia .. 4.6 3.3 2.8 2.8 3.9Finland 17.5 22.5 23.1 22.1 23 23.8Sweden 21.6 17.4 22.2 22.2 24.5 25.0United Kingdom 20.5 27.6 19.9 20.1 19.4 15.8Source: Eurostat (2012), Life-long learning.

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Table 8. Total fertility rate, number of children per woman, 2000-2010.

2000 2005 2008 2009 2010EU27 .. 1.51 1.60 1.59 ..Belgium 1.67 1.76 1.86 1.84 ..Bulgaria 1.26 1.32 1.48 1.57 1.49Czech Republic 1.14 1.28 1.50 1.49 1.49Denmark 1.77 1.80 1.89 1.84 1.87Germany 1.38 1.34 1.38 1.36 1.39Estonia 1.38 1.50 1.65 1.62 1.63Ireland 1.89 1.86 2.07 2.07 2.07Greece 1.26 1.33 1.51 1.52 1.51Spain 1.23 1.35 1.46 1.39 1.38France 1.89 1.94 2.01 2.00 2.03Italy 1.26 1.32 1.42 1.42 1.41Cyprus 1.64 1.42 1.46 1.51 ..Latvia .. 1.31 1.44 1.31 1.17Lithuania 1.39 1.27 1.47 1.55 1.55Luxembourg 1.76 1.63 1.61 1.59 1.63Hungary 1.32 1.31 1.35 1.32 1.25Malta 1.70 1.38 1.44 1.43 1.38Netherlands 1.72 1.71 1.77 1.79 1.79Austria 1.36 1.41 1.41 1.39 1.44Poland 1.35 1.24 1.39 1.40 1.38Portugal 1.55 1.40 1.37 1.32 1.36Romania 1.31 1.32 1.35 1.38 ..Slovenia 1.26 1.26 1.53 1.53 1.57Slovakia 1.30 1.25 1.32 1.41 1.40Finland 1.73 1.80 1.85 1.86 1.87Sweden 1.54 1.77 1.91 1.94 1.98United Kingdom 1.64 1.78 1.96 1.94 1.98 Source: Eurostat (2012) Total fertility rate.

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Table 9. Pension reform, 2008-2010 (incomplete, work in progress)

Bulgaria Increase of age to regular pension to 65 (men) and 63 (women)

Increase of age for minimum pension to 67 by 2021

Denmark Earlier start of increase of retirement age

Increase of age for voluntary early exit benefit from 62 to 64

Estonia Increase of pension age to 65 by 2026

Finland Age limit for part time pension increased from 58 to 60

Minimum age for unemployment early exit raised from 57 to 58

France Increase of age for full pension from 65 to 67 by 2023

Increase of minimum retirement age from 60 to 62 by 2018

Greece Retirement age 65 for both men and women

Increase of minimum age for retirement after 40 years of work to 60

Italy Faster increase of statutory retirement age for women in public sector to 65 in 2012

Ireland State pension age from 65 to 68 by 2028

Public sector retirement age to follow state pen

Latvia Increase from 62 to 65 by 2021

Romania Increase to 65 (men) and 63 (women)

Spain Statutory from 65 to 67 by 2020

Minimum and early ret. from 61 to 63

United Kingdom State pension age to 66 by 2020

Public sector from 60 to 65

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Table 10. Long term care (missing, work in progress)

Table 11. Average exit age from the labour force, 2001-2010.

2001 2005 2008 2009 2010EU27 59.9 61.0 61.4 61.4 61.5Belgium 56.8 60.6 .. .. ..Bulgaria .. 60.2 .. .. ..Czech Republic

58.9 60.6 60.6 60.5 60.5

Denmark 61.6 61.0 61.3 62.3 62.3Germany 60.6 .. 61.7 62.2 62.4Estonia 61.1 61.7 62.1 62.6 ..Ireland 63.2 64.1 .. .. ..Greece .. 61.7 61.4 61.5 ..Spain 60.3 62.4 62.6 62.3 62.3France 58.1 59.0 59.3 60.0 60.2Italy 59.8 59.7 60.8 60.1 60.4Cyprus 62.3 .. .. 62.8 ..Latvia 62.4 62.1 62.7 .. ..Lithuania 58.9 60.0 .. .. ..Luxembourg 56.8 59.4 .. .. ..Hungary 57.6 59.8 .. 59.3 59.7Malta 57.6 58.8 59.8 60.3 60.5Netherlands 60.9 61.5 63.2 63.5 ..Austria 59.2 59.9 .. .. ..Poland 56.6 59.5 .. .. ..Portugal 61.9 63.1 .. .. ..Romania 59.8 63.0 .. .. ..Slovenia .. 58.5 .. .. ..Slovakia 57.5 59.2 .. 58.8 ..Finland 61.4 61.7 .. 61.7 ..Sweden 62.1 63.6 63.8 64.3 64.4United Kingdom

62.0 62.6 63.1 63.0 ..

Source: Eurostat (2012) Average exit age from the labour force.

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