Welfare regimes, social fluctuations and the generational gap

1. Welfare regimes, social fluctuationsand the generational gap • Compared cohort dynamics in France, Europe and the United states • Louis ChauvelSciences-Po Paris • Site : http://louis.chauvel.free.fr • chauvel@sciences-po.fr

2. Intensions : Answering this paradox : economic growth, but no sign of it in my “generational neighbourhood” Understanding how Welfare regimes can influence the distribution of resources between birth cohorts • Plan • Facts concerning the French generational fluctuations • A theory of generational dynamics • Welfare models and generational dynamics • The case of France as a typical corporatist model • Other trajectories in Europe

3. QUESTION : are there long term consequences of collective difficulties when entering labor market ? Risks of unemployment 12 months after living school  (%) 45% 40% 35% 30% 25% Male Female 20% 15% Cohorte 1959 10% 5% Cohorte 1953 0% 1970 1980 1990 2000 Source : Enquêtes emploi INSEE 1969-2002, archives Lasmas

4. 30% 25% 20% 1985 15% 2000 10% 5% 0% 20 30 40 50 60 70 80 • “Consumption” relative poverty rates by adult age groups (family budget 1985-2000) in France • Source: INSEE family budgets • Note: the definition of “consumption” poverty threshold is based on the European relative definition: people with standardized equivalent consumption adjusted for family size below 50% of the national median are poor. Each new generation enters with a stronger poverty rate, which increases progressively at any later age.

5. 4. The newer generations know no more improvement, when compared to their own parents • Intergenerational upward and downward mobility rate(male age 30-34 y.o.) • Source : Enquêtes Emploi 1982-2000, INSEE ; archives LASMAS-Quételet 60 50 down 40 immobile 30 up 20 10 0 • Sources : Enquêtes Emploi 1982-2002 – INSEE (origine : LASMAS IDL – CNRS) 1980 1985 1990 1995 2000 2005

6. 5. A major risk of dyssocialization • Evolution of relative suicide risk for two age groups (1965 and 1995) (per 100.000) • Source : Chauvel, 1997a²

7. Socialization versus individual and collective history • Life cycle and socialization • Primary and secondary socialization (Berger et Luckmann) • The « transitionnal socialization » • Long term impact of the « transitionnal socialization » : « scar effect » • History and the constitution of a Generationengeist and of a Generationenlage 16-18 y.o. • 25-30 y.o.

8. Interpreting the French case: • Esping-Andersen Typology of Welfare states: France = “corporatist-conservative” « welfare mix », stabilization of social relationsProtection of insiders (protected male workers) against outsiders • In case of economic brake : « Insiderisation » of insiders, already in the stable labor force and « outsiderisation » of new entrants • In France, young people can wait … decades Increasing poverty rates for young people, stable intracohort inequalities (after taxes and welfare reallocations) • Are other intergenerational compromise possible ?

9. Three modalities Esping-Andersen Typology of Welfare states : • Conservative model» (Continental Europe) : Preservation of (old) social equilibria, with social insurance excluding unemployed • Liberal model : (Anglo-saxon world) : Market as a central institution, residual welfare state against market failures HL0 : more intracohort inequalities HL1 : less intercohort inequality (competition between generations) • « Social-democrat » Model (Nordic Europe) : Citizenship and broad participation to discussions and bargaining around social reforms between social groups (gender, generations, etc.) for a long-term development HD0 : less intracohort inequalities HD1 : residual intercohort inequalities (compromise between generations)

10. International variations : • Three great models of evolution : • Continental and Mediterranean Europe (+ Japon) : protection of insiders against outsiders (new generations are facing major difficulties) • United States and anglo-saxon countries : the new generations, in the average, face difficulties, but higher inequalities imply a divergence between lowest and highest income groups and social classes • Northern Europe : Closer to a universalistic egalitarian equilibrium between age groups, genders and social classes (lower intra- and inter- cohort inequalities) • Emerging countries : • in fast growth countries (China, Taiwan ?, India, Central-Easter Europe) : new opportunities for newer cohorts, and higher inter- and intra-cohort inequalities to the benefit to young university graduates • in stagnation countries (Argentina, Northern Africa) : intergenerational inequalities and generational destabilization (inflation of diplomas and declining return to education)