Scandinavian Working Papers in Economics

Institute for Futures Studies

No 2005:15: Generations at War or Sustainable Social Policy in Aging Societies?

Thomas Lindh (), Bo Malmberg () and Joakim Palme ()
Additional contact information
Thomas Lindh: Institute for Futures Studies, Postal: Box 591, SE-101 31 Stockholm, Sweden
Bo Malmberg: Institute for Futures Studies, Postal: Box 591, SE-101 31 Stockholm, Sweden
Joakim Palme: Institute for Futures Studies, Postal: Box 591, SE-101 31 Stockholm, Sweden

Abstract: The demographic factors that helped trigger the debate about generations and equity will grow in importance, which is a straightforward prediction from the current age structures. This warrants further scientific inquiries. It is also likely to require new policies, or changes in the design of current policies. We argue that although life-cycle considerations have been essential for welfare state policy designs there has not been a corresponding interest for life cycle perspectives in the development of political theory. The shortcomings of both classical liberalism and Marxism can be related to their lack of a life-cycle perspective. In this context, the Myrdals’ argumentation in the 1930s for welfare state policies as a response to demographic challenges can provide guidance also for policy-making in the 21st century. What we argue is that a balanced population growth would reduce the distributive tensions between generations. There are policy options that should be part of a future oriented approach to changing population structures. To invest in human capital and to use migration as a way of increasing the labour force are good examples of investment policies for the future. Such policies boil down to increasing the number of future taxpayers and their productivity. What is warranted to succeed in this endeavour, is a balanced approach; a synthesis between the concern with the way that the welfare state supports different groups in society, on the one hand, and a realistic view of how society works, on the other hand.

Keywords: Intergenerational; justice

JEL-codes: J10

43 pages, December 9, 2005

Price: 25 SEK

Note: ISSN 1652-120X ISBN 91-89655-73-7

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