ABSTRACT:
If Europe wants to fulfill it’s Lisbon agenda of catching up with the United States, it must overhaul its pension systems and introduce some form or other of private pension funds, which are a major force in financing technological advance in the capitalist world economy today.
Our investigations clearly show that World Bank pension reforms are associated in a positive way with the rates of change of a country’s performance to the better. The time-series correlations for each country in the world system from 1980 onwards with economic growth (World Bank data series), unemployment (ILO data series), and economic inequality (Univer-sity of Texas Inequality Project) are neatly explained by our explanatory variables; the direc-tion of the influence of pension reform on the three dependent variables each time indicating that pension reform is compatible with economic growth, full employment and the redistribution of incomes.
The same positive effects are also at work in explaining economic growth, full employment and reductions of unemployment over time in Europe’s over 300 different regions. The Euro-pean regions, whose countries realized a three-pillar pension model, developed more rapidly and had – ceteris paribus – a better employment record than the non-reformers. Persistent non-reform, as the German example especially dramatically shows, can lead to a circulus vi-ciosus of stagnation and unemployment under the conditions of globalization.
