Reforming pensions is one of the biggest challenges of the century. All OECD countries have to adjust to the ageing of their populations and re-balance retirement income provision to keep it adequate and ensure that the retirement income system is financially sustainable. Demographers have been warning us for some time that ageing is looming and that when it strikes populations and workforces will rapidly age. But many governments preferred to ignore the call for reform and cling to the hope of postponing solutions beyond the next election or claiming that rather painless remedies could be found. Immigration of younger workers, more women in work and higher productivity were put forward in the hope that more painful solutions could be avoided. All of these factors can certainly help to cope with ageing and especially with the financing of pensions but the increases necessary to compensate for ageing are so large that one cannot rely on them alone. Most OECD countries have realised this and have undertaken numerous reforms during past years. But pension reform is a difficult task. It involves long-term policy decisions under uncertain conditions and often the likely impact of these decisions on the well-being of pensioners is not spelt out clearly. More than most other areas, pension reform is a highly sensitive topic. Not only does it lead to heated ideological debates, but it makes people protest in the streets, and even forces governments to retreat from needed reforms.
As people working on pension reforms around the world, we at the OECD Secretariat are asked time and again for the “right” solution to the problem. Which country does it the best way, which country is doing the worst job, which systems are the most generous, will it be possible to reform without increasing pensioner poverty, and will countries be able to
pay for the promises they are making?
There are no simple answers to these questions. National retirement-income systems are complex and pension benefits depend on a wide range of factors. Differences in retirement ages, benefit calculation methods and adjustment of paid-out pensions make it very difficult to compare pension policies across countries. Another problem is that life expectancies at retirement differ from one country to another, which means that some countries will have to pay pensions for a much longer period of retirement than others. As a result national debates are often full of misleading claims regarding the generosity and affordability of other countries’ pension arrangements.
International comparisons to date have focussed mostly on the fiscal aspects of the ageing problem. But much less attention has been paid to the social sustainability of pension systems and the impact of reforms on the adequacy and distribution of pensioner incomes. But these aspects are also crucial if countries want to attain the dual objective of promising
affordable pensions and preventing a resurgence of pensioner poverty.
This report presents the first direct comparison of pension promises across OECD countries. It provides a novel framework to assess the future impact of today’s pension policies, including their economic and social objectives. It takes account of the detailed rules of pension systems but summarises them in measures that are easy to compare. Pension benefits are projected for workers at different levels of earnings, covering all mandatory sources of retirement income for private-sector workers, including minimum pensions, basic and means-tested schemes, earnings-related programmes and defined
contribution schemes. Another novelty is the inclusion of the large effects of the personal income tax and social security contributions on living standards in work and in retirement: all indicators are presented gross and net of taxes and contributions.
The framework can be used in different ways. As it is flexible to changing assumptions, the impact of policy reforms and economic developments on pension entitlements can be simulated. It can provide answers to questions such as what would happen if a country switched from wage to price indexation of pensions, or changed the benefit accrual rate. It can also inform on the impact of changes in economic growth, interest rates, wage growth or inflation on pensions of future retirees. The OECD will use the framework to monitor pension reforms in member countries by updating this report regularly. This report is the first in a biennial series which will be produced in co-operation with the European Commission.
Public opinion on pensions is changing. People are realising that a shrinking number of young workers will have trouble paying for more and more pensioners. Time has come to open a frank debate among all members of society and address the question of how the cost of ageing should be distributed in each society. Our publication aims to contribute to this
debate by shedding more light on the social and economic implications of pension reform.

https://mpra.ub.uni-muenchen.de/10907/1/MPRA_paper_10907.pdf

Pensions at a glance: public policies across OECD countries

This paper examines changes in unionization that have occurred over the last decade or so using individual level micro data on many countries, with particular emphasis on the United Kingdom, the United States and Canada. I document an empirical regularity not hitherto identified, namely the probability of being unionized follows an inverted U‐shaped pattern in age, maximizing in the mid‐ to late 40s in 34 of the 38 countries I study. I consider the question of why union membership seems to follow a similar inverted U‐shape pattern in age across countries with such diverse industrial relations systems. I find evidence that this arises in part because of cohort effects, but even when cohort effects are removed a U‐shape remains.

International patterns of union membership

Canada: A land of missed opportunity for addressing the social determinants of health

Recently, theories and research in the new field of ‘emerging adulthood’ have indicated that young people may currently view adulthood based on individualistic criteria and not according to the passing of one or another of the transitions many sociologists use to frame the analysis of youth. Based on qualitative interviews conducted with 25–29 year olds in the province of Quebec, Canada, this article analyses how self-conceptions of adulthood are constructed. Findings show that, contrary to the results from the field of ‘emerging adulthood’, the young adults who were interviewed refer to adulthood in terms of both individual qualities and transition markers. Then, by placing the interplay between these two dimensions into a larger socio-economic context, the article argues that attention needs be paid to transitions and changing social structures in research on youth biographies.

Do Transitions and Social Structures Matter? How ‘Emerging Adults’ Define Themselves as Adults

This paper examines changes in unionization that have occurred over the last decade or so using individual level micro data on twenty seven of the thirty OECD countries, with particular emphasis on Canada, the United Kingdom and the United States. Micro-data is also used to model union membership in a further eleven non-OECD countries. Union density is found to be negatively correlated with level of education in the private sector and positively correlated in the public sector. The probability of being a union member is found to follow an inverted U-shaped pattern in age, maximizing in Canada, the USA and the UK in the mid to late 40s. This inverted U-shaped pattern is repeated in a further thirty countries (Australia; Austria; Bangladesh; Belgium; Bulgaria; Chile; Czech Republic; Denmark; Germany; Estonia; Finland; France; Greece; Hungary; Ireland; Israel; Japan; Luxembourg; Mexico; Netherlands; New Zealand; Norway; Poland; Portugal; Russia; Slovak Republic; Slovenia; Spain; Sweden and Switzerland). I consider the question of why this inverted U-shape in age exists across countries with diverse industrial relations systems including early retirement and cohort effects.

/pdf/a-cross-country-study-of-union-membership-2ziimnrwbg.pdf

A Cross-Country Study of Union Membership

A paper presented at the December 2004 conference "Labor Market Developments in the United States and Canada since 2000," cosponsored by the Federal Reserve Bank of New York, the Canadian Consulate General in New York, the Centre for the Study of Living Standards, and the New York Association for Business Economics.

Are Good Jobs Disappearing in Canada

Rene Morissette is with the Business and Labour Market Analysis Division; he can be reached at (613) 951-3608. Grant Schellenberg is with the Social and Aboriginal Statistics Division; he can be reached at (613) 951-9580. Anick Johnson is with the Input-Output Division; she can be reached at (613) 951-7211. All can be reached at perspectives@statcan.ca. Since the early 1980s, the proportion of Canadian workers belonging to labour unions has declined considerably. A striking aspect of this trend has been the extent to which it has affected some groups of workers more than others—in particular, men, younger workers, and those in goodsproducing industries.

Diverging trends in unionization

Using hourly wage data from the Labour Force Survey as well as previous household surveys covering the 1981-2004 period, we assess whether the relative importance of low-paid jobs and well-paid jobs has changed over the last two decades. Since it is unclear whether trends in wage levels obtained from all the aforementioned surveys are unbiased, we refrain from making definitive statements regarding the evolution of low-paid and well-paid jobs over the 1981-2004 period. When assessing whether well-paid jobs are disappearing in Canada, we focus our attention on recent trends, i.e. on changes in the fraction of jobs falling in certain (real) wage categories during the 1997-2004 period. We find little evidence that the relative importance of well-paid jobs - however defined - has fallen over the last two decades or since the second half of the 1990s. We also find little evidence that the relative importance of low-paid jobs, those paying less than $10.00 per hour, has risen during these two periods. We show, along with numerous previous studies, that the wage gap between young workers and their older counterparts has risen substantially over the last two decades but that the wage gap between university graduates and other workers has shown little change. More important, we show that, within age groups, wages of newly hired male and female employees - those with two years of seniority or less - have fallen substantially relative to those of others. Second, in the private sector, the fraction of new employees employed in temporary jobs has risen substantially, increasing from 11% in 1989 to 21% in 2004. Among employees with one year of seniority or less, the incidence of temporary work rose from 14% in 1989 to 25% in 2004. Third, pension coverage has fallen among men of all ages and among females under 45. Taken together, these findings suggest that Canadian firms (existing or newly-born) have responded to growing competition within industries and from abroad by reducing their wage offers for new employees, by offering temporary jobs to a growing proportion of them and by offering less often pension plans that guarantee defined benefits at the time of retirement.

In this study, we assemble a wide variety of data sets in an attempt to produce a set of stylized facts regarding offshoring and the evolution of Canadian employment in recent years. Our main finding is that, in almost all of the data sets used, there is, so far, little evidence of a correlation between offshoring, however defined, and the evolution of employment and layoff rates. While our analyses are fairly simple, they all suggest that if foreign outsourcing has had an impact on Canadian employment and worker displacement so far, this impact is likely to be modest and thus, unlikely to be detected either with industry-level or occupation-level data.

Anick Johnson

Papers

Are Good Jobs Disappearing in Canada

Diverging trends in unionization

Are Good Jobs Disappearing in Canada

Offshoring and Employment in Canada: Some Basic Facts

Offshoring and Employment in Canada: Some Basic Facts