There are two major paradigms in Anglo-American style comparative social policy: the regime theory developed by Esping-Andersen (1990) and the social investment (SI) approach found in e.g. Morel et al. (2012). Drawing on and contributing to both, The Generational Welfare Contract argues that generationally balanced welfare contracts generate positive-sum solutions in the form of more generous income replacement for all age groups. More generous income replacement is, in turn, reflected in lack of poverty, higher levels of trust, more happiness and life satisfaction among citizens.

The authors distinguish between generationally balanced and unbalanced welfare states. The former have similar levels of income replacement for all age groups: parents with children, workers and old age groups. Generationally balanced welfare states include Austria, Belgium, Denmark, Finland, France, Norway and Sweden.

Generationally unbalanced welfare states focus either on the working aged population (pro-work) or on the old age population (pro-old) and income replacement for other groups tends to be lower. With statistical evidence, the authors show that citizens in generationally unbalanced welfare states tend to experience more poverty and be less happy than citizens in generationally balanced welfare states.

The Generational Welfare Contract does not only describe and classify welfare states from the point of view of generational balance. Based on existing literature in political philosophy, it also provides normative arguments why governments should balance their welfare states in order to provide equally for people at different stages of the life cycle.

The strengths of the book lie in presentation and analysis of statistical evidence for various connections between welfare indicators and types of generational welfare contract. The arguments presented in the book are also very useful in debates concerning the impact of demographic change on the financing of welfare states. Aging societies need not necessarily lead to a dismantling of the welfare state but instead, seeking to maintain generational balance in welfare provision in the spirit of SI, could help governments to maintain and develop existing social security schemes in the future as well.

Regime theory may be criticised for ignoring welfare state change and the SI approach for remaining an abstract concept without practical implications in an age of neo-liberal welfare state retrenchment and austerity. Despite its innovative approach, The Generational Welfare Contract does not make this critique irrelevant. It presents data dating back to the 1960s but does not discuss policy change nor changes in social policy ideas.

However, regarding the practical relevance of SI, the book presents one very useful result: generous income replacement in generationally balanced welfare states is not associated with lower employment rates or higher unemployment rates compared to countries with unbalanced welfare contracts and lower income replacement rates. This result counteracts the discourse maintained by behavioural and neo-classical economists, who would argue that generous income replacement contributes to structural unemployment.

As The Generational Welfare Contract is a large scale study covering 18 countries ‘with an unbroken democratic record since the Second World War’ (p. 12), it is bound to be ‘condensed’ and ‘stylized’ (p. 142) in its analysis, focusing on rather crude measures of income replacement, politics and welfare outcomes. Nonetheless, the innovative way of grouping welfare states is a clear contribution to existing literature and it could be complemented by qualitative case studies of countries with different generational welfare contracts. Such studies could further assess the authors’ claim that ‘generational politics foster interest mediation and encourage coalition building for mutual benefit’ (p. 138).