In this section I will briefly analyse to what degree the countries studied have adjusted their pension systems along the lines sketched above. I will begin by presenting a number of empirical indicators measuring the degree to which national pension policymakers have successfully addressed the short-term problems of public pension schemes. As pointed out above, governmental actors typically pursue at least three short-term goals in pension policy: the elimination or avoidance of fiscal imbalances within the public pension system, relief of the fiscal pressure on the state budget, and the stabilision of pension contributions in order to contain the growth of non-wage labour costs. Thus, in the short run, governments are primarily concerned with curbing the growth of pension outlays and – albeit to a lesser extent – stabilising or augmenting the revenue bases of the pension system.

To what degree have Austria, France, Germany, Italy, and Sweden accomplished the goal of containing pension costs in the 1990s? Due to the economic recession and the concomitant expansion of early retirement, pension outlays increased relative to gdp in the early 1990s. Thereafter, the pension expenditure ratio remained relatively stable in Austria, France, and Italy (see table 2.1). In Germany, pension expenditures increased by about 0.5% of GDP, whereas they fell by 1.5% of GDP in Sweden. At first sight, these figures suggest that governments have done relatively little to curb the growth of pension expenditures in the 1990s. This impression is quite misleading, however. A number of intervening factors have to be taken into account in order to assess the “real” magnitude of pension cutbacks on the basis of aggregate spending data. First, due to their increasing labour force participation, women have accumulated ever higher pension entitlements in recent years. Moreover, the share of people above 65 (and thereby the number of pension beneficiaries) increased between 1993 and 1999 by 1.1% in Sweden, 4% in Austria, 7% in Germany, 8.2% in France, and 12.3% in Italy. Obviously these trends had an expansionary effect on total pension outlays. Without this effect, the share of national income devoted to public pension benefits would have declined significantly in all of the five countries.