ABSTRACT
Pension systems play a central role in welfare states. Public pension plans were, in most advanced industrialized countries, the first social programmes to insure either workers or citizens against one of the major social risks in their lives and to cover a large proportion of the population and thus shaped the development of modern welfare states. In addition, since in many OECD countries pensions are the single largest social programme, accounting for more than 10 per cent of GDP, they are one of the main items in government budgets and a key driver of taxes and public expenditures. The role of pension systems will become even more important over the next fifty years, because public pensions are needed to prevent poverty and provide income security for retirees rapid population ageing will lead to a rise in pension expenditures and significant fiscal challenges for governments. The study of pensions thus helps us to gain insights into the emergence and change of welfare states, the politics of social policy and policy responses to population ageing.
