ABSTRACT
This chapter shows that the institutional arrangements for distributing social protection against the risk of income loss and income inadequacy are changing in mature industrial societies. This signals a major new development for evolution of the inter-generational contract. There is more to welfare than what the state provides and the exclusion of employment based occupational welfare from the system of accounting for total welfare spending leads to distortions in the understanding of laggard and leading welfare state countries. A long term perspective of accommodation is needed since an understanding of pension policy must take account of at least a 30 to 40 year time horizon from entry into labor market as a young worked to exit from work at the last stage of the working career. The welfare state crisis literature assumes that state is caught in a legitimacy crisis which inhibits its capacity to a flexible adaption to its changing environment without undermining its democratic mandate.
