Social Cohesion Thinking Lab Summit Policy Proposal

Promoting Intergenerational Equity

Intergenerational Transfers as a Means to Tackle Social Inequality


"matryoshka dolls" (CC BY-NC-ND 2.0) by Herbert Kajiura


Seven years after the global economic crisis, social inequality is rising in the vast majority of the EU member states. However, an orchestrated policy mix at the national level combined with anti-austerity interventions at the EU level could reverse these developments.


Seven years after the global economic crisis, social inequality is rising in the vast majority of the EU member states. Even worse, the social gap between the generations has widened considerably as pensions and benefits for older people did not shrink as much as labour incomes and opportunities for the younger population. Unemployment, precarity, poverty, public debt accumulation and limited access to quality social services constitute the basis on which the anti-establishment political behavior of the younger population is nurtured. However, an orchestrated policy mix at the national level combined with anti-austerity interventions at the EU level could reverse these developments.

As the EU and the Eurozone countries are locked up in another round of sluggish growth and stagflation, the ECB interventions should be complemented with emblematic investment plans in key areas such as digitalization, environmental measures, manufacturing, stronger domestic demand in high-surplus countries, relaxation of the Stability Pact terms and public debt sustainability. Direct intergenerational transfers, as the Youth Guarantee, require more funds and more inclusive implementation at the national level. Furthermore a more unified approach on the recognition of qualifications and the transfer of social security entitlements is necessary in order to increase labor mobility with security. The introduction of good governance principles, evidence-based policy-making and an overview of legislation on social policies by an ombudsman could control unfair transfers in favor of the older generations at the national level.

Brave reforms in pension systems towards models that reward labour and provide incentives to stay longer within the working life are required as the national demography becomes older. Arguably, investment in high quality early childhood education and provision of daycare and preschool facilities are necessary for younger couples as well as investment incentives targeted to employ young and poor unemployed people. As the ‘precariat’ is transformed into a class in itself with shared characteristics and vulnerable to the sirens of the extreme right, political institutions and parties are called to engage in an open and continuous debate with civil society and to lead by example in the fields of transparency and the inclusion of younger politicians in their ballots.