[Longevity and Inequality] Social Policies Leave a Mark for Decades, but Not on Everyone Equally

Social policies shape earnings, retirement and health for decades
Effects differ by family background, occupation and institutions
Policymakers must ask for whom each policy works

Conference context

This article was adapted by The Economy Review from “Long-Term Effects of Social Policies over the Life Course: Lessons from SHARE,” a conference paper supplied by Guglielmo Weber of the University of Padova. Weber discussed the Survey of Health, Ageing and Retirement in Europe (SHARE) at the Inequalities in Longevity conference at Fondazione Giorgio Cini in Venice on 3–4 July 2026. This adaptation follows the submitted paper’s broader life-course perspective, examining how education, pension and family policies produce long-lasting and uneven effects across different groups.

A reform introduced at school age can shape earnings decades later. Pension eligibility rules can influence not only when people stop working but also their financial security and cognitive health. Maternity leave provisions can affect women’s attachment to employment long after childbirth. These consequences are easy to overlook when governments judge a policy only by its immediate purpose. They are also uneven: the same intervention may help some people much more than others, depending on their family backgrounds, occupations and institutional environments.

Consider compulsory schooling reforms across Europe. Research drawing on life histories from the Survey of Health, Ageing and Retirement in Europe (SHARE) found that an additional year of schooling increased lifetime earnings by an average of 9 percent. But this average concealed an important difference: the earnings gains were larger among people who had grown up in households with more books. The evidence illustrates why evaluating social policy requires attention both to outcomes over an entire lifetime and to differences between the people affected.

The Survey of Health, Ageing and Retirement in Europe, known as SHARE, has collected harmonised information on the health, cognition, employment, income, wealth and family networks of people aged 50 and over and their partners since 2004. As described in Weber’s paper, the project has interviewed around 170,000 people across 28 countries. Its retrospective component, SHARELIFE, reconstructs earlier education, employment, family and health histories, allowing researchers to connect past policy exposure with outcomes observed decades later. Differences in the timing and design of European policy reforms also provide opportunities for quasi-natural experiments, helping researchers move beyond simple correlations.

One More Year of School Pays Off Across a Whole Career

In the second half of the twentieth century, many European countries raised the age at which school attendance is compulsory, with different timetables and intensities from country to country. These changes have caused a change in education between successive generations that did not come from the choices of the families themselves and are therefore valuable for anyone who wants to measure the causal effect of education. Thanks to the SHARE life histories, it is known which respondents were born before and which after each reform, while the coverage of several countries turns each national change into a separate experiment within the same harmonized framework, which moves the analysis away from the simple correlations between years of study and what follows in life.

The reforms succeeded in increasing educational attainment. Comparing generations born before and after changes in compulsory schooling laws, researchers found that affected cohorts remained in education longer than those who had narrowly missed the reforms. The more important question, however, is whether these additional years of schooling translated into economic benefits over an entire working life.

Based on SHARELIFE’s complete employment histories, a study published in The Economic Journal in 2017 showed that an extra year of school increased lifetime earnings by an average of 9 percent. But the average does not describe everyone who makes it up equally well. The return was significantly higher for those who said they grew up in a home with many books, an indicator widely used for the family’s learning environment and cultural resources. The reforms, therefore, did not fully compensate for the disadvantage of the starting point and seem to have benefited those who could combine the extra time in the classroom with a more favorable environment at home. Compulsory education is usually defended as a tool for equalizing opportunities and on average the defense stands, but the data show that school policy and family circumstances have been interacting for decades, something a policymaker needs to know before promising that a year of school will close social gaps on its own.

Pension Rules Decide When Workers Leave and How Exposed They Remain

The ageing of the population has brought pension systems to the centre of the European debate and in recent decades almost all countries have changed their eligibility rules, retirement ages and financial incentives, with the dual aim of fiscal sustainability and longer working lives. Because the changes took place in different years and with different content, SHARE monitors the same people as they approach the retirement threshold and pass it under different rules. Retirement behaviour proves to be particularly sensitive to institutional incentives, since across the countries and reform episodes studied the percentage of those leaving the labour market rises sharply around the age at which they are entitled to a pension.

Retirement also fundamentally changes a household’s financial conditions and even when well planned can expose it to risks that become visible much later. An analysis of SHARE data published in Economic Policy in 2009 argued that increasing longevity, combined with relatively early exit from work and limited opportunities to return to work, may leave some retirees financially vulnerable, particularly when an unforeseen shock occurs. The risk grows where generous early retirement incentives coexist with less developed financial markets, because people have fewer ways to smooth their consumption in an increasingly long retirement period.

The consequences are far from uniform. The financial preparation of households differs depending on their lifetime earnings, accumulated wealth, financial literacy and institutional environment, so a reform that changes retirement incentives will hardly affect all workers in the same way. Those who have had stable careers and greater financial resources usually have more flexibility as to when to stop working, while for those whose careers were interrupted or savings were left low the constraints are much tighter and the same change in the retirement age may have very different implications for the two groups.

Retirement Does Not Affect Every Worker’s Memory the Same Way

Beyond finances, retirement has health implications and one question has garnered particular attention in international research, whether leaving work accelerates cognitive deterioration because it removes the mental stimulation offered by daily work. The so-called “mental retirement” hypothesis has caused intense controversy, as the observed relationship may simply reflect reverse causality, since people with declining cognitive abilities may choose, or be forced, to retire earlier. SHARE repeats cognitive measurements in the same people over time, while differences in eligibility rules give an external source of change in when someone leaves work. In this quasi-experimental context, a study published in the Journal of Health Economics in 2017 examined whether retirement itself affects later cognitive decline, separating those who leave at the first age allowed by the system from those who wait for the statutory retirement age.

The picture that emerges is more complex than the debate assumed. For those who retire at statutory age, retirement is associated with a progressively higher probability of cognitive decline, measured as a substantial decrease in memory performance over time. Among those who leave as soon as they become entitled to early retirement, there is no corresponding deterioration and early retirement even seems to have a small protective effect on later cognitive function. The explanation lies in the type of work one leaves behind. Early retirees were disproportionately often employed in physically demanding or low-skilled positions, where retirement can reduce stress and improve general well-being, while those who stay until statutory age are more often in cognitively demanding positions with constant mental stimulation and greater autonomy and for them retirement means a much steeper drop in daily mental activity and, consequently, a greater risk of cognitive decline.

Reading the hypothesis of mental retirement as a general argument in favor of a longer working life for all does not find support in these data, because the result depends on the path through which one reaches retirement and the profession one leaves. Workers leaving a physically demanding occupation and those leaving a cognitively demanding profession in the same year do not go through the same change in their daily lives. A uniform age rule treats them as the same and the different consequences it will have for each will hardly be seen in an assessment that looks only at the average pensioner.

Generous Maternity Leave Keeps Women Attached to Their Employers

The extension of maternity leave and parental leave is one of the most important social policy developments of the last half century. These leaves attempt to reconcile having children with participation in the labour market, allowing mothers to temporarily interrupt their work without severing the link with the employer and their long-term effectiveness depends on the length of the leave but also on the institutional and cultural environment in which they apply. SHARELIFE reconstructs complete employment and fertility histories for each respondent, so working periods, interruptions associated with each birth and return to work can be identified, while the large differences in countries’ maternity leave legislation give the change that analysis needs.

A study published in Advances in Life Course Research in 2013, taking advantage of precisely these differences between countries, found that more generous maternity leave systems increase the time women remain formally connected to their employer after birth and reduce the length of interruptions spent completely outside the labour market. If paid leave encouraged permanent withdrawal from work, histories would show longer periods of time out of work in countries with the most generous arrangements, but they show the opposite. Leave facilitates continuity of employment because it maintains the employment relationship at a critical stage of women’s working lives and this effect continues to be seen in employment histories long after the first months of motherhood.

The same study shows that the effects vary from institutional setting to institutional setting. The availability of childcare, labour market regulations and social norms prevailing in each country influence how maternity leave translates into later employment. Two countries with the same length of leave on paper can therefore end up with a different link between women and the labour market, depending on what mothers find when the leave ends and the child has to stay somewhere during working hours. The effectiveness of a policy is thus judged along with the wider institutional environment where people decide about work and their children and the provisions of the law that enacts it are only a part of it.

Social Policies Must Be Judged by Who They Work For

The four fields differ in their objectives, the populations they target and the stage of life in which they intervene, yet they leave behind the same pattern. The effects of social policies often go beyond their immediate goal, since educational reforms affect incomes decades after school, pension rules touch financial well-being and cognitive aging and maternity leave shapes women’s bond with work far beyond the months following birth. They are also heterogeneous and averages, as informative as they are, hide significant differences between population groups. Governments will continue to make difficult decisions about education, retirement, family policy and health systems under severe demographic and budgetary constraints and good decisions will increasingly rely on knowing, beyond whether an intervention works, for whom it works and under what institutional conditions.

Answering these questions requires data that follows the same people throughout their lives and places their experience within their country’s institutions and this is exactly what SHARE has been offering since 2004. The 9 percent return to an extra year of school holds as an average. Within it are people who grew up among shelves full of books and gained more from the reform and others who grew up without them and earned less, while what it would take to close the distance between them remains an open question for the next legislator who raises the school-leaving age.

Publication note

This article is an editorial adaptation of Guglielmo Weber’s submitted conference paper, “Long-Term Effects of Social Policies over the Life Course: Lessons from SHARE,” prepared in connection with the Inequalities in Longevity conference at Fondazione Giorgio Cini, Venice, on 3–4 July 2026. It is not a transcript of Weber’s oral presentation or an official publication of the conference organisers. The article was independently adapted by The Economy Review from Professor Weber’s submitted manuscript and reviewed by the contributor prior to publication.

References

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