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Starts by discussing the perennial welfare state crisis, making the point that the contemporary crisis differs notably from its forebears. Rigidity is an endogenous symptom of the crisis, and the various symptoms include demographic ageing, and the growing risks of poverty and social exclusion (which spring from the malfunctioning of the labour market and the family). The aim of the book is to come to terms with the new political economy—the post‐industrial economy—that is emerging. To do this it pursues a set of interlinked arguments: the so‐called welfare state crisis, in which debate has been too focused on the state, when it should be on the interaction between the component parts of contemporary welfare regimes such as labour markets, the family, and the welfare state itself; the fact that the real crisis of contemporary welfare regimes lies in the disjuncture between the existing institutional construction and exogenous change; and the fact that the emerging risks of post‐industrial society come primarily from the revolution that is unfolding in both labour markets and households. Four phenomena form the unifying theme of the book: equality, risks, jobs, and the new political economy. Risks and jobs are dealt with in separate chapters; the introduction discusses equality and the new political economy.

Explores the themes of what follows. It argues that the welfare state literature of the past quarter century has been big on crisis theories of the welfare state and much weaker on facts. The chapter suggests that, in order to say something meaningful about the future of the welfare state, we need to test crisis accounts, such as those built around globalization and population ageing, with facts drawn from comparative analysis to establish which are myths and which are realities.

Examines the supposed threat to the future trajectory of social spending posed by population ageing. An initial focus is on the contrast between the sense of crisis characterizing popular and governmental accounts with the more measured analysis of demographers and economists. Later sections examine a variety of welfare state programmes for the old and show that expenditure trajectories are only marginallyinfluenced by demographic considerations, but that what really influences expenditure outcomes is the differential generosity of pension provision in different families of nations. Differential generosity is also shown to be a further factor influencing aggregate patterns of social expenditure.

This chapter discusses social citizenship and identifies three main components: reciprocity (necessary to support horizontal redistribution), social inclusion (supporting vertical redistribution), and trust in institutions (vital to the political legitimacy of the enterprise). It reviews current challenges to the welfare state from population ageing, changes in family and household patterns and in the labour market, the growing assertiveness of citizens, and other factors, and briefly examines government responses in Europe.

The key issues addressed in this chapter are how to manage the transition to pension reform in Europe so as to satisfy principles of intergenerational equality and intra‐generational justice, while also contributing to the further democratization of retirement among men and women that has already started. The main sections of the chapter are: Managing the transition; The economics of ageing; Redesigning the retirement contract.

This chapter deals with demographic facts. Ageing trends are the result of two different and contrasted phenomena: the change from a high to a low fertility regime and the increase in longevity. The baby boom and subsequent fertility bust was a massive but transitory shock. In contrast, the smooth and steady increase in longevity does look like a permanent shock. The critical condition for these potential longevity gains to materialise in longer working lives is a dynamic equilibrium between the increase in life expectancy and the number of years in good health (the so-called ‘healthy ageing’ regime).

This is the third of three chapters on the sources of pressure on contemporary national welfare states, all of which seek to show how examining the sources of strain carries implications for identifying who is likely to fight with whom over what; the authors of the three chapters are not of one mind on this issue. Here, Pierson focuses on trends within affluent democracies that constitute potential sources of the strains usually attributed to globalization. Like Iversen in the previous chapter, he highlights the role of the shift from manufacturing to services, but rather than focusing on the disruption of employment, his concern is the shift in the workforce to activities where productivity improvements are more limited; the result has been slower economic growth, which generates fiscal strain for mature welfare states. This, for Pierson, is one of a series of ‘post‐industrial shifts’ that produce severe pressures on the welfare state — others include the maturation of governmental commitments, the transformation of household structures, and population ageing. All these shifts create intense fiscal problems; in addition, social change in a context where programmes are often slow to adapt generates mismatches between the inherited capacities of welfare states and contemporary demands for social provision.

This chapter examines the impact of ageing societies on families based on empirical evidence from Europe, North America, and Australasia. It identifies three broad roles for families: as mechanisms for intergenerational support, intergenerational transfer, and intergenerational solidarity. It argues that more heterogeneous forms of family are emerging, with their own sets of roles and relationships influenced by demographic, social, and cultural changes.

Intergenerational tension and solidarity has been present in American family structures even before the Civil War. Kin ties remain transient and malleable. Americans still act as if they believe that they are part of one happy family, with many pretending to believe that blood is thicker than water. This chapter begins with a discussion on the history of the American family. It highlights developments that have altered the context in which general relations develop, and reviews some consequences of population ageing on domestic politics.

This chapter examines the availability and supportive functions of extended kin relationships in later life, drawing on the results of the Berlin Ageing study. It is shown that in addition to close family, distant relatives are an important resource of social functioning in later life. Extended kinship activation is associated with reduced risk of loneliness, regardless of whether relatives were involved in specific functional transactions.

This chapter examines the impact of contemporary American family structure on the ageing process. It is shown that mature Americans will have increasingly heterogeneous family histories and statues. Thus, the importance of family to the ageing experience will increase.

This concluding chapter contributes to the discussion in two ways. First, it presents a ‘grand view’ in which it discusses the various components of productivity in detail, and then looks at long-term historical developments where changing economic structures are taken into account. Second, it presents results from an empirical analysis in which it considers both the ‘extensive margin’ of productivity (absenteeism at an individual level) and the ‘intensive margin’ of productivity (productivity conditional on being present at work at a group level or firm level).

This chapter focuses on one fundamental aspects of an ageing population — how to pay for old age, individually and collectively. It also presents a study of the history of old age support in the UK and US and concludes that despite the quite different beginnings of the public pension and social security systems, government policy in both countries has become similarly locked in to a set of institutional arrangements which were devised to respond to immediate social and economic problems, but which have acquired a rationale and a dynamic of their own.

This chapter examines the major consequences, especially economic consequences, of population ageing. It shows that population ageing not only opens a demographic window for economic development by providing the first demographic dividend, but also has the potential to provide a second demographic dividend because changes in age structure influence the processes that lead to the creation of wealth. Such dividends could play a crucial part in China's future economic development.