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Solidarity between generations: a link weakened by aging

The Observatory is studying the phenomenon of inequality

Pension fund deficit requires, solidarity between generations is severely tested.

The Observatory inequalities could not ignore the issue of solidarity between generations and organized a conference entitled "What forms of solidarity between the generations? ".

Solidarity between generations works well when there is a demographic balance between generations explains the Observatory of Inequalities. But mainly because of aging, this balance is threatened.

First, there is a growing imbalance between the active and retired. In 1961, there were seven people of working age for a retiree. Today the ratio is 4 people of working age for a retiree, and it will be 2 to 3 in many countries in 20-30 years. Pension payments will become an enormous burden for public budgets. To reduce this burden, the solutions are well known but are not easy to implement. This may include extending the working life (both through increasing the retirement age, as incentives to work longer - for example by encouraging employers to retain older workers to work ), increased the tax burden or to lower pension benefits.

The management of addiction, that is to say long-term care for the elderly is the second area weakened by the aging of the population. Today, 4% of the population 80 or older. In 2050, this share is expected to reach 10%. In OECD countries, it is families who provide most care for the elderly. But with the increasing number of elderly care, families will no longer be able to cope. Governments are thus required to compensate for the difficulties of families, either through financial aid for the elderly to receive home care, but also by investing in the creation of institutions for the aged, retirement homes , already lacking in many countries.

What solutions considered?
Three major routes would solve these problems. It should combine these solutions with the objectives of financial sustainability and adequacy of pension benefits. These three ways are:

- The lengthening of working life,

- Targeting a larger pension benefits on the most vulnerable,

- Diversification of revenue sources for the elderly.

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