Like in a Skinner box : external constraints and the reform of retirement eligibility rules in Italy

Italy is among the European countries which have proceeded the farthest in reforming old age protection arrangements in the last two decades. Not only the pension architecture has been remodelled since the early 1990s by launching a transition to a multipillar structure (1993), also the introduction of a NDC system in the first paygo pillar was legislated in 1995 to replace the traditional earningsrelated schemes. Despite these incisive changes, reforms of eligibility (age and seniority) conditions for retirement have lagged behind. Various contributions have showed how, on the one hand, reforms in the 1990s were made possible by exogenous pressures—and specifically the external constraint (vincolo esterno) posed by EU fiscal rules; on the other, external pressures were filtered by the domestic policy-making thus leading to a strong protection of so-called acquired rights in order to appease the unions. Due to the weaker “Eurogrip” since the early 2000s, changes in eligibility conditions for retirement have become contradictory, ambivalent when not expansionary (e.g. in 2007). Things have suddenly changed, however, when the economic crisis and the “debt agony” have broken into the stage. Between 2009 and 2011 several measures included in the austerity packages adopted by the cabinets led by Berlusconi and, then, Monti have repeatedly aimed at tightening eligibility conditions to be entitled to both old age and seniority pensions. The consequence of these interventions are a steep increase of pensionable age, the full harmonization of requirements across genders and economic sectors to be implemented in the next five years, as well as the automatic link of eligibility requirements to changes in life expectancy. By revisiting the vincolo esterno thesis, the paper argues that, first, European constraints actually represent irresistible forces only when they are coupled with pressures exerted by financial markets. Second, differently from the past wave of reforms (1992-97), recent pressures have led policy-makers to adopt measures which will be implemented in the short-run. This represents a novelty which proves the enhanced disruptive potential of exogenous pressures on national social security arrangements after the 2008-09 economic crisis, also capable to affect previously (quasi)immovable objects such as retirement age by overcoming resistance by the “insiders”.