Grand Coalitions for Unpopular Reforms: Building a Cross-Party Consensus to Raise the Retirement Age

Martin Hering ()

Social and Economic Dimensions of an Aging Population Research Papers from McMaster University

Abstract: This article argues that an increase of the retirement age from 65 years to 67 or higher, which is the most unpopular pension reform measure, is politically feasible if the major parties build either a formal or an informal grand coalition. It argues further that institutional rules and agreed standards, especially the goals expressed in relation to pension policy, facilitate the formation of a grand coalition and increase the autonomy of governments vis-à-vis trade unions. Specifically, by restricting key policy instruments for responding to fiscal pressures, they lead political parties to consider the controversial option of raising the retirement age and to engage in a coordinative discourse about the necessity of this change and the limits of other reform options. This argument implies that the success of a retirement age reform does not depend on a negotiated agreement between a government and trade unions. By examining the agenda-setting and decisionmaking processes in Germany from the mid-1990s to 2007, this article shows that governments raise the retirement age only if they face constraints that rule out tax increases and benefit cuts and that they are able to enact even comprehensive retirement age reforms that increase not only the normal age but also the earliest eligibility age for both public and private pensions.

Keywords: welfare state; pension politics; retirement age; policy paradigms; institutional constraints; blame avoidance (search for similar items in EconPapers)
JEL-codes: D70 H53 H55 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-pbe and nep-pol
Date: 2008-10
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Persistent link: http://EconPapers.repec.org/RePEc:mcm:sedapp:233

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