Research Political Sciences

Is Cutting Pensions a False Economy?

, by Ezio Renda
A new project by David Stuckler financed by the European Research Council will generate new evidence on the human costs of austerity measures in Italy and other European countries

David Stuckler, Professor at Bocconi's Department of Social and Political Sciences, has won an ERC Consolidator Grant from the European Research Council worth over €1.8m.

Many governments across Europe are seeking ways to save money in the aftermath of COVID-19. Faced with ageing populations, some governments are trying to reduce pension spending, by increasing pensionable ages and reducing how much money retired persons actually get.

But what if these budget cuts are worsening the health of older persons? Instead of saving money, what if they are simply dumping the costs onto the healthcare system?

So far governments don't have the data they need to answer these questions. A longstanding challenge is that data on the health system and pension system are kept in siloes and cannot communicate with each other.

Professor Stuckler's new ERC project sets out an ambitious research program that will create new data that will fundamentally change the conversation about how to promote healthier ageing and the role of the pension system.

The project will create new linkages in datasets on health and pensions systems in Italy and other European countries. These data will then be interrogated to understand what the consequences for health have been when governments in Italy, the Netherlands, and Greece have made deep budget cuts to the pension system. This new information will help governments to know the full consequences of their decisions, for both health and wealth.

These data come at a critical time. Older persons suffered extensively during the COVID-19. But even prior to the pandemic, life expectancy in older persons began to decline in the majority of EU countries.

ERC Consolidator Grants are assigned to researchers with 7-12 years of experience since completion of their PhD, a scientific track record showing great promise and an excellent research proposal. Younger researchers can apply for a Starting Grant and more experienced scientists can bid for an Advanced Grant.

Why Cutting Pensions Is a False Economy

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