Reinventing the generational contract
The cohesion between generations in Western societies is assumed to be based on a contract of solidarity between generations. This uncodified generational contract encompasses, first, the so-called ‘welfare contract’ (Johnson et al. 1989; Laslett 1992), institutionalised primarily in the public pension system, and in Germany legally enforced in the principle of subsidiarity. The subsidiary function of societal or state activity vis-à-vis the initiative of individuals and families is derived from the nineteenth-century political economy of social Catholicism which was developed in opposition to state centralism and collectivism. The underlying promotion of self-help is also the official aim of the compulsory long-term care insurance, introduced in 1995 as the ‘fifth pillar’ of the German social insurance system. It provides social services or a substantially reduced care allowance to those who need long-term assistance in at least two routine activities of daily life, explicitly giving priority to prevention and rehabilitation over care provision and to home care over institutional care (Mager 1997). Second, the generational contract includes what Laslett critically calls the ‘procreative contract’ (1992: 27): parents care for their dependent children, who in turn are obliged to support them in old age. Yet, long-term care insurance is not discussed in terms of reinforcing the generational contract.