Trend AnalysisSociology & Political Science
Aging Populations and the Fraying Intergenerational Contract
Pay-as-you-go pension systems were built on the assumption that each working generation would be larger than the retired generation it supports. Demographic inversion—fewer workers per retiree—is now undermining this contract across the developed world. Recent research reveals how different societies are renegotiating the obligations between generations.
By Sean K.S. Shin
This blog summarizes research trends based on published paper abstracts. Specific numbers or findings may contain inaccuracies. For scholarly rigor, always consult the original papers cited in each post.
Every modern welfare state rests on an implicit intergenerational contract: the working-age population funds pensions, healthcare, and social services for the elderly, expecting that the next generation will do the same for them. This contract was economically sustainable when dependency ratios were favorable—many workers supporting few retirees. Demographic transition has inverted this ratio across the developed world and increasingly in middle-income countries. Japan's old-age dependency ratio exceeds 50%. South Korea's total fertility rate fell to 0.72 in 2023—the lowest ever recorded for any country at the time. Italy, Germany, and Spain face similar trajectories.
The arithmetic is unforgiving. Fewer workers per retiree means either higher contributions from workers, lower benefits for retirees, longer working lives, or increased immigration. Each option redistributes costs between generations and creates political friction. The intergenerational contract that was implicit and unquestioned when demographics were favorable must now be explicitly renegotiated—and the younger generations being asked to fund increasingly costly pensions are simultaneously facing housing unaffordability, precarious employment, and climate costs that their predecessors did not bear.
Why It Matters
Gurín and Brandt (2024) examine intergenerational solidarity in South Korea—a country experiencing the most extreme demographic transition in human history. Using longitudinal data from the Korean Longitudinal Study of Aging, they analyze how the introduction of welfare policies has changed patterns of intergenerational solidarity within families. The study reveals a critical dynamic: while the normative dimension of intergenerational solidarity has profoundly changed—shifting from a dominantly filial piety-centric character to more complementary contract-based norms in which children, welfare state, and society all share responsibility—the functional dimension of solidarity (actual exchange of money and practical support) has not de-filialized. In other words, the expansion of the welfare state changed what Koreans believe they owe their parents, but actual family support practices have proven remarkably persistent.
South Korea's case is instructive because it compressed into decades a demographic transition that took Europe a century. The National Pension Service, established in 1988, is already projecting fund depletion by 2055. The generation that contributed to building the system may not receive the benefits it was promised. This creates a legitimacy crisis that pure demographic analysis cannot capture—it is fundamentally a question of social trust and perceived fairness.
The Science
The Welfare-Family Solidarity Nexus
Willems, Mortelmans, and Vercruyssen (2024) investigate a question with profound policy implications: do informal carers (family members providing unpaid care to elderly relatives) prefer more welfare state support? The findings challenge the simple assumption that expanding formal care replaces family care. Informal carers express complex preferences—they want more state support to complement their caregiving, not to replace it. But the nature of desired support varies: respite care (temporary relief from caregiving), financial compensation for caregiving time, and workplace flexibility are valued more than simply shifting the elderly relative into institutional care.
This finding reveals the emotional and relational dimensions of intergenerational solidarity that economic models miss. Family caregiving is not merely a labor supply question—it is embedded in relationships of obligation, affection, guilt, and reciprocity. Welfare state design that ignores these relational dimensions will either fail to reduce caregiver burden (if it provides the wrong type of support) or create unintended consequences (if it disrupts caregiving relationships that both parties value).
Generational Fairness Perceptions
Aslan and Karadeniz (2025) analyze a specific flashpoint in intergenerational solidarity: the reaction of young Turkish workers to early retirement policies that allow older workers to exit the labor force with full benefits funded by younger workers' contributions. In Turkey's PAYG system, each generation's pensions are financed by the contributions of the current working population. The study reveals significant resentment among younger workers who perceive the intergenerational transfer as unfair—they are funding retirement benefits at ages and replacement rates that will not be available to them when they retire.
This perception of generational unfairness is not unique to Turkey. Across OECD countries, younger workers face a combination of later retirement ages, lower replacement rates, and higher contribution rates than the generation they are funding. The sociological challenge is that this perceived unfairness erodes the social legitimacy of pension systems, potentially undermining the political support necessary to sustain them.
A Life-Course Perspective
Giarelli (2025) proposes a life-course approach to intergenerational fairness that moves beyond the snapshot comparison of current workers versus current retirees. The European analysis demonstrates that intergenerational fairness cannot be assessed at a single point in time—it must account for the lifetime opportunities, risks, and costs that each generation faces. Today's retirees may receive generous pensions, but they also lived through periods of lower economic growth, fewer educational opportunities, and different health risks. Today's workers face worse pension prospects but enjoy higher baseline living standards, better health outcomes, and longer life expectancies.
The life-course framework reveals that intergenerational comparison is more complex than populist narratives suggest. The analysis also points toward structural asymmetries that life-course complexity cannot fully explain away—patterns such as housing wealth concentration among older cohorts, the disproportionate climate burden falling on younger cohorts, and pension systems built on demographic assumptions that no longer hold.
Demographic Pressure Across Countries
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| Country | Old-Age Dependency Ratio (2025) | Projected (2050) | Total Fertility Rate | Key Policy Response |
|---|
| Japan | 52% | 75% | 1.20 (2023) | Immigration liberalization, robot caregiving |
| South Korea | 27% | 72% | 0.72 (2023) | Pension reform debate (depletion by 2055) |
| Italy | 40% | 63% | 1.18 | Gradual retirement age increase |
| Germany | 36% | 54% | 1.38 (2023) | Immigration + delayed retirement |
| Turkey | 15% | 32% | 1.51 (2023) | Early retirement backlash (Aslan & Karadeniz, 2025) |
| United States | 29% | 40% | 1.62 | Social Security trust fund depletion by 2034 |
| China | 22% | 46% | 1.0 | One-child policy reversal (too late for demographic momentum) |
What To Watch
The next decade will determine whether aging societies can renegotiate the intergenerational contract through democratic deliberation or through fiscal crisis. Watch for South Korea's pension reform outcome—the country's extreme demographic trajectory makes it a test case for whether democratic societies can impose near-term costs on current retirees and workers to ensure long-term sustainability. Also monitor the political salience of intergenerational fairness as a voting issue in Europe, where youth-oriented parties are beginning to frame pension reform, housing policy, and climate action as generational justice issues rather than technical fiscal questions. The deeper sociological question is whether societies can maintain solidarity across generations when the material basis of that solidarity—a favorable dependency ratio—has disappeared.
Every modern welfare state rests on an implicit intergenerational contract: the working-age population funds pensions, healthcare, and social services for the elderly, expecting that the next generation will do the same for them. This contract was economically sustainable when dependency ratios were favorable—many workers supporting few retirees. Demographic transition has inverted this ratio across the developed world and increasingly in middle-income countries. Japan's old-age dependency ratio exceeds 50%. South Korea's total fertility rate fell to 0.72 in 2023—the lowest ever recorded for any country at the time. Italy, Germany, and Spain face similar trajectories.
The arithmetic is unforgiving. Fewer workers per retiree means either higher contributions from workers, lower benefits for retirees, longer working lives, or increased immigration. Each option redistributes costs between generations and creates political friction. The intergenerational contract that was implicit and unquestioned when demographics were favorable must now be explicitly renegotiated—and the younger generations being asked to fund increasingly costly pensions are simultaneously facing housing unaffordability, precarious employment, and climate costs that their predecessors did not bear.
Why It Matters
Gurín and Brandt (2024) examine intergenerational solidarity in South Korea—a country experiencing the most extreme demographic transition in human history. Using longitudinal data from the Korean Longitudinal Study of Aging, they analyze how the introduction of welfare policies has changed patterns of intergenerational solidarity within families. The study reveals a critical dynamic: while the normative dimension of intergenerational solidarity has profoundly changed—shifting from a dominantly filial piety-centric character to more complementary contract-based norms in which children, welfare state, and society all share responsibility—the functional dimension of solidarity (actual exchange of money and practical support) has not de-filialized. In other words, the expansion of the welfare state changed what Koreans believe they owe their parents, but actual family support practices have proven remarkably persistent.
South Korea's case is instructive because it compressed into decades a demographic transition that took Europe a century. The National Pension Service, established in 1988, is already projecting fund depletion by 2055. The generation that contributed to building the system may not receive the benefits it was promised. This creates a legitimacy crisis that pure demographic analysis cannot capture—it is fundamentally a question of social trust and perceived fairness.
The Science
The Welfare-Family Solidarity Nexus
Willems, Mortelmans, and Vercruyssen (2024) investigate a question with profound policy implications: do informal carers (family members providing unpaid care to elderly relatives) prefer more welfare state support? The findings challenge the simple assumption that expanding formal care replaces family care. Informal carers express complex preferences—they want more state support to complement their caregiving, not to replace it. But the nature of desired support varies: respite care (temporary relief from caregiving), financial compensation for caregiving time, and workplace flexibility are valued more than simply shifting the elderly relative into institutional care.
This finding reveals the emotional and relational dimensions of intergenerational solidarity that economic models miss. Family caregiving is not merely a labor supply question—it is embedded in relationships of obligation, affection, guilt, and reciprocity. Welfare state design that ignores these relational dimensions will either fail to reduce caregiver burden (if it provides the wrong type of support) or create unintended consequences (if it disrupts caregiving relationships that both parties value).
Generational Fairness Perceptions
Aslan and Karadeniz (2025) analyze a specific flashpoint in intergenerational solidarity: the reaction of young Turkish workers to early retirement policies that allow older workers to exit the labor force with full benefits funded by younger workers' contributions. In Turkey's PAYG system, each generation's pensions are financed by the contributions of the current working population. The study reveals significant resentment among younger workers who perceive the intergenerational transfer as unfair—they are funding retirement benefits at ages and replacement rates that will not be available to them when they retire.
This perception of generational unfairness is not unique to Turkey. Across OECD countries, younger workers face a combination of later retirement ages, lower replacement rates, and higher contribution rates than the generation they are funding. The sociological challenge is that this perceived unfairness erodes the social legitimacy of pension systems, potentially undermining the political support necessary to sustain them.
A Life-Course Perspective
Giarelli (2025) proposes a life-course approach to intergenerational fairness that moves beyond the snapshot comparison of current workers versus current retirees. The European analysis demonstrates that intergenerational fairness cannot be assessed at a single point in time—it must account for the lifetime opportunities, risks, and costs that each generation faces. Today's retirees may receive generous pensions, but they also lived through periods of lower economic growth, fewer educational opportunities, and different health risks. Today's workers face worse pension prospects but enjoy higher baseline living standards, better health outcomes, and longer life expectancies.
The life-course framework reveals that intergenerational comparison is more complex than populist narratives suggest. The analysis also points toward structural asymmetries that life-course complexity cannot fully explain away—patterns such as housing wealth concentration among older cohorts, the disproportionate climate burden falling on younger cohorts, and pension systems built on demographic assumptions that no longer hold.
Demographic Pressure Across Countries
<
| Country | Old-Age Dependency Ratio (2025) | Projected (2050) | Total Fertility Rate | Key Policy Response |
|---|
| Japan | 52% | 75% | 1.20 (2023) | Immigration liberalization, robot caregiving |
| South Korea | 27% | 72% | 0.72 (2023) | Pension reform debate (depletion by 2055) |
| Italy | 40% | 63% | 1.18 | Gradual retirement age increase |
| Germany | 36% | 54% | 1.38 (2023) | Immigration + delayed retirement |
| Turkey | 15% | 32% | 1.51 (2023) | Early retirement backlash (Aslan & Karadeniz, 2025) |
| United States | 29% | 40% | 1.62 | Social Security trust fund depletion by 2034 |
| China | 22% | 46% | 1.0 | One-child policy reversal (too late for demographic momentum) |
What To Watch
The next decade will determine whether aging societies can renegotiate the intergenerational contract through democratic deliberation or through fiscal crisis. Watch for South Korea's pension reform outcome—the country's extreme demographic trajectory makes it a test case for whether democratic societies can impose near-term costs on current retirees and workers to ensure long-term sustainability. Also monitor the political salience of intergenerational fairness as a voting issue in Europe, where youth-oriented parties are beginning to frame pension reform, housing policy, and climate action as generational justice issues rather than technical fiscal questions. The deeper sociological question is whether societies can maintain solidarity across generations when the material basis of that solidarity—a favorable dependency ratio—has disappeared.
References (5)
[1] Gurín, M. & Brandt, M. (2024). Intergenerational Solidarity in a Developing Welfare State: The Case of South Korea. International Journal of Social Welfare, 33(4), 12643.
[2] Willems, A., Mortelmans, D., & Vercruyssen, A. (2024). Welfare State Contract and Family Solidarity: Do Informal Carers Prefer More Welfare State Support? International Journal of Social Welfare, 33(4), 12685.
[3] Aslan, H. & Karadeniz, O. (2025). Early Retirement Practice in Turkiye and Young Generations' Reactions: An Analysis of Intergenerational Solidarity. MAKU IIBF Dergisi.
[4] Giarelli, G. (2025). Intergenerational Fairness and Ageing Styles in Europe: A Life-Course Approach. Social Sciences, 15(1), 2.
Aslan, H., & Karadeniz, O. (2025). Early Retirement Practice in Türkiye and Young Generations' Reactions: An Analysis of Intergenerational Solidarity. Mehmet Akif Ersoy Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 12(3), 997-1022.