Populations are aging due to rising longevity and declining fertility, especially in the Western world, including the Netherlands and other European countries. This demographic shift means that people spend more years in retirement and draw pensions for longer, which puts financial pressure on pension systems. In response to this monetary challenge, many countries have reformed their pension systems by raising pension eligibility ages and limiting access to early retirement options, such as those based on unemployment and sickness. While these policy changes aim to promote longer working lives and ensure the sustainability of public finances, they also risk exacerbating social inequality in retirement.
Pension reforms can deepen existing inequalities in retirement because they usually overlook the diverse needs and life course experiences of individuals. This is a major concern, given that not
everybody is able to extend their careers to older ages (Hinrichs, 2021). Although some are forced to work longer out of financial necessity, it is not feasible for others to do so, as they endure more impactful events during their life course (Kuitto & Kuivalainen, 2021). Those in physically demanding jobs, who are generally lower-educated, are more prone to developing health problems and hence face barricades to working longer, tending to exit the labor market involuntarily (Visser et al., 2016). Persons with interrupted work histories or caregiving duties, mostly women, are more likely to have financial insecurity in later life, since they accumulate lower pensions over time (Frericks et al., 2009). These patterns highlight how retirement is not a uniform endpoint but the continuation of unequal and often gendered trajectories generated by cumulative (dis)advantages throughout the life course.
Social inequality in retirement not only arises from variations in individual biographies, but is also governed by past and current institutional arrangements of countries. Since each country’s social policies create exclusive circumstances for its subjects, the opportunities and constraints citizens encounter throughout their lives are shaped by where they live (Diewald, 2016). Countries provide various forms of social protection, ranging from education to childcare, housing to healthcare, and unemployment benefits to pensions. With monetary transfers, rights, and services, welfare states combat social inequality by promoting the well-being of all members of society at each stage of life, targeting especially those who are confronted with adversities like unemployment, disability, or poverty (Leisering, 2003). Pensions, in particular, are instrumental pillars of welfare states, with their generosity directly configuring the financial security of retirees. In the Netherlands, for instance, the universal and flat-rate state pension basically ensures that almost no one lives in poverty in old age. However, the design of welfare provisions can also reinforce inequality when they perpetuate assumptions that privilege continuous, full-time employment in conjunction with an intact, nuclear family constellation, which is a typical male life course (Sainsbury, 1999). Such policy designs risk underprotecting those, mainly women, whose trajectories feature care-related career breaks, parttime work, or union dissolution. On top of that, countries vary in the generosity of welfare provisions, with fluctuations within countries over the years (Scruggs & Ramalho Tafoya, 2022). This can alter workers’ retirement decisions and post-retirement comfort, depending on when and where they built their lives. This is because welfare regimes have the potential to regulate the relationship between life courses and retirement outcomes, narrowing the gap in cumulative (dis)advantages in more redistributive systems while reinforcing or hindering gender disparities therein (Sieber et al., 2020).