Reforming Early Retirement in Europe, Japan and the USA by Bernhard Ebbinghaus
Reforming Early Retirement in Europe, Japan and the USA , by , 2006 , New York : Oxford University Press . Pp . xvii + 331 .
Reviewer: Norma L. Nielson, Chairholder in Insurance and Risk Management, Haskayne School of Business, University of Calgary, Canada
The author of this book, Bernard Ebbinghaus, is described on its jacket as a Professor of Macrosociology. Although my computer's spellcheck does not care for that term, it does provide a very accurate description of the perspective that permeates this book. For example, the book purports to examine both macro and micro views. However, the author defines these terms from an extremely high level with his macro view looking at global trends and national economies. His micro view, which differs considerably from how that term might be used by an economist, considers the role of the private sector in an extremely broad sense. In some instances he discusses the experience of a specific industry, but most discussions concerning the private sector role aggregate the impacts of all employer-sponsored benefit plans. The micro views presented in this volume do not examine data regarding individuals.
That said, the book is built on the extremely solid premise that both supply and demand matter. Separate chapters examine the pull factors generated largely (but not exclusively) by government policies and programs and the push factors generated largely by the need to maintain and enhance productivity in firms. Ebbinghaus explicitly examines whether early retirement serves primarily the interests of firms—at the public's expense. Although that is sometimes evident, he finds that the expansion of retirement at increasingly young ages in many countries is the result of unintended consequences of social policies for older workers. Following an extensive comparative-historical analysis of the evolution of early retirement, he rejects both the one-sided views put forth by authors who argue that the trends in early retirement are explained fully by the pull factors (e.g., the introduction of external incentives into the labor market that he calls “politics against markets”) and the views of other authors that push factors (e.g., firms' efforts to remove less productive workers from their workforce in a “politics for markets” explanation) fully account for the trend. Simply stated, his work strongly supports continued belief in the previously stated premise: that both supply and demand matter.
The overarching and well-supported conclusion is that it is the multiple pathways that have been created—separate policies designed to deal with unemployment, disability, and retirement—that played an integral role to the extraordinary expansion of earlier exits from the labor force. Furthermore, it is those multiple pathways that have made it extremely difficult for subsequent attempts to unwind that trend to produce any meaningful reversals.
This book is well researched and contains a wealth of global data. There are occasional instances where the reader will notice that the book is not written by a native English speaker, but these in no way limit the book's contribution. The policymaker looking for a simple solution will, however, be disappointed. Ebbinghaus concludes (p. 78) that “there is hardly a 'best solution' for all systems. Even if there were, each nation state will have to pursue a particular path given its different starting position.”
