You have worked extensively on pension reform and labour market policy. Why is intergenerational fairness such a pressing issue today?
Intergenerational fairness has become central because in the last 25 years or so demographic and economic – and recently also geopolitical - trends have altered the implicit social contract which governed the liberal democracies since World War II and which was based on the idea of both economic and social progress, based on rights, development, free (but regulated) market and the welfare state. Lower fertility rate (now in many EU Countries much lower than the 2.1 which more or less ensures the population stability; it is 1.15 in Italy as of 2025); longer life expectancy (a sign of progress requiring, however, adjustments in the length of working life to maintain financial security in old age) and lower productivity growth mean that younger generations have less opportunities and risk bearing disproportionate costs for promises made in the past. If we do not correct these imbalances, we undermine both equity and trust in public institutions.
Pension reforms are often politically sensitive. How can governments balance financial sustainability with social legitimacy?
While sustainability can be in contrast with “undue generosity” it is not opposite to social legitimacy. On the contrary, the two factor reinforce each other when policies are transparent and (possibly) gradual, as well as when citizens have enough financial education to understand the basic principle of a pension system and the necessity of adjustments when their foundations change. When the system is in danger of breaking down – as it is when its provisions and rules are not consistent with the underlying economic and demographic bases - Governments must clearly communicate the necessity of reforms, distribute restrictions fairly, and protect the most vulnerable. Credibility comes from consistency and transparency: frequent reversals erode trust far more than difficult but coherent reforms; incomplete and misleading communication distort people’s choices. Populism, on the other end, tend to shorten political horizons and to disregard economic-financial constraints.
You often highlight the importance of a life-cycle approach. What has this changed in how we design welfare systems?
A welfare system based on a life-cycle perspective implies that attention has to shift from isolated risks to the consequentiality of individuals’ life. More specifically, this means shifting from concentrating the financial support in retirement to helping people in adverse circumstances whenever they manifest and offer them chances for a better life since its beginning by trying to level opportunities. It thus encourages investment in the early stages of life - education, employability, and family support – which have great and possibly permanent consequences on later phases, while ensuring adequate preparation for retirement and good services in old age. In this perspective, welfare systems are also preventive and empowering and not just redistributive and compensatory for adverse occurrences in life. Living longer is not an “adversity” but financial fragility in old age is harsh.
In your experience in Italy, how closely linked are labour market policies and pension sustainability?
They are deeply and essentially interconnected. Pension systems depend on stable and adequate contributions, which in turn require high employment rates, especially among young people and women. Only a good labour performance and a well-designed pension system, consistent with the underlying demographic (i.e. the old age dependency ratio) and economic factors (i.e. the productivity growth rate) can provide good pensions. The rest, which is a necessary and equitable solidarity task, is redistributive, possibly from richer to poorer individuals/categories. Pensions that are systematically more generous than paid contributions imply either solidarity or privilege; while the first is socially justified, the second is not. Also because in a PayGo system comes at the expense of young and future generations. In Italy, weak labour market participation has historically strained pension sustainability. Without inclusive labour markets and adequate labour incomes, even well-designed pension reforms struggle.
Many countries face difficult choices. Where do you see the biggest trade-offs today: supporting families, inclusion in the labour market, or ageing-related needs?
The challenge is not so much choosing one priority over another but managing their interaction under constrained resources and trying to relax the constraints through productivity increase. Supporting education, improving its links with the labour market to facilitate transition from the first to the second, making labour policies more effective and the labour market less segmented, helping families and addressing ageing all matter. However, neglecting participation—particularly of women and youth—would be the most damaging, as it weakens both current growth and future welfare sustainability. Solidarity, as stressed before, is a necessary element of a pension design provided it is operative in the right direction, favouring the more fragile segments of the population, instead of granting privileges. Reforms can, in general, improve the trade-off frontiers by eliminating distortions and disincentives.
How can governments avoid policies that unintentionally increase inequality between generations?
By carefully assessing long-term distributional effects. This suggests avoiding legislating reforms in emergency circumstances, when they are clearly inevitable and there is little or no time for a democratic debate. Policies should avoid privileging current retirees at the expense of future ones, as is a political tendency in a period of population ageing. Automatic adjustment mechanisms, actuarial fairness, and linking benefits to contributions are essential, while ensuring protection to the unfortunate ones, possibly through tax and not contributions financing (the first are progressive while the second are proportional and load mainly labor income. As already said, equally important is investing in younger generations so they are not left with fewer opportunities and higher burdens.
Social services are often expected to respond to the consequences of these imbalances. What role should they play in supporting more equitable welfare systems?
Social services are crucial in mitigating inequalities that economic policies alone cannot completely address. Their role is not only reactive but also proactive in fostering equal opportunities and in avoiding the social exclusion of the older population. They should act as enablers—supporting labour market participation through active labour market policies; promoting long life learning; providing long ter care and assistance services to vulnerable people; preventing social exclusion and encouraging social interaction.
Europe is diverse in its social models. What can countries realistically learn from each other, and where are the limits?
Countries can learn principles—such as transparency, sustainability, and activation policies—but simply copy models risks inefficiencies and ineffectiveness. Social policies in Europe are under the subsidiarity principle, although much convergence has been achieved (for example through the “Open method of cooperation”) and by imposing fiscal constraints (i.e. the Maastricht Treaty and the Social and Stability Pact). Institutions are embedded in specific social, political, and cultural contexts. The limit lies in ignoring these differences; the opportunity lies in adapting good practices intelligently. The old taxonomy of Nordic, Continental, Mediterranean European countries has largely been surpassed.
Looking ahead, what is the biggest risk if we fail to address intergenerational inequalities?
The greatest risk is a breakdown of social cohesion. If younger generations perceive the system as unfair, they may withdraw their support—economically and politically; they can migrate or even isolate themselves (NEET). This could lead to lower growth or open decline, weaker institutions and increasing conflict between age groups (and possibly also within age groups). Luckily, there are still margins of action to avoid this tragic scenario.
Finally, what message would you like to share with social service leaders attending ESSC 2026?
My message is one of responsibility and vision. Social services are at the frontline of fairness. However, fairness has to be both within and between generations. This means activating policies that are not only compassionate but also financially sustainable, which essentially means “not at the entire/large expenses of young and future generations. Equity between generations is not automatic—it requires conscious design, courage in reform and a long-term perspective. I encourage particularly the young to imagine the society in which they would like to live and engage themselves to realize it, not to surrender to more myopic, egoistic or spineless mind-set.