The emergence of welfare services is due to several factors, such as:
The aging of the population and the decline in the birth rate have meant that fewer and fewer people are making contributions to state social security systems, but more are receiving benefits for a greater number of years. This aging of the world population is something that has been apparent for decades: the number of people over 60 years of age worldwide has doubled since 1980, and is expected to reach 2 billion by 2050.
This is a very positive development, as the elderly make important contributions to society. However, these advantages are accompanied by special health challenges, and it is important to provide services that are appropriate to the new needs.
In recent years, there have been important social behavior changes that have favored the emergence of special benefits. In addition, society’s needs have led to the emergence of cover, such as for assistance or disability, which is provided through benefits other than public ones.
In the labor market, the increased participation of women has generated the need to implement new social protection measures in those systems in which there are no state benefits to protect against certain contingencies (for example, maternity benefits and risk during pregnancy), and the same has occurred as a result of the increase in the number of unemployed.
The state pension system is funded by workers’ contributions; this money is used to pay the pensions of retired people, as well as other benefits. The problem is that people are entering the labor market later and later, and there has been a sharp increase in early retirement across the world in recent years.
Economists are therefore in favor of a supplementary pension system and other similar products designed to guarantee the welfare of society and in which both individuals and companies participate.