The quantitative-empirical research on the political economy of welfare state reforms has offered multiple explanations on how governments impact social policy reforms. The emergence of the ‘dependent variable problem’ and the ‘independent variable problem’, however, clearly calls into question some of the previous findings. In this chapter, we offer an analysis that takes both issues into account, and we show that the analytical framework of the agenda-setting power model (ASPM) developed by Jahn (2010, 2011, 2016b) is suitable for analyzing dynamics of social policy reforms. Our analysis of changes in unemployment benefit replacement rates and generosity in 21 OECD countries from 1971 to 2010 shows that we can observe a clear classical partisanship-relationship involving instances of both leftist expansion and rightist retrenchment. Moreover, we show that political and institutional veto players have an intervening effect on unemployment benefit reforms and that both left and right governments are constrained in their agendas once veto players gain relevance in the political bargaining process.

This study investigates how policies shape retirement and labour market participation of older workers and thus help extending working lives. It employs a time‐series–cross‐section analysis of the effects of macro‐level institutional pull, push and retention factors on effective retirement age and employment rate of older workers in 15 OECD countries from 1992 to 2010. The comparative approach reveals that public pension system rules that have been geared towards postponing retirement in many countries in past decades, indeed, are significant determinants of lengthening working lives. In particular, statutory retirement age and financial disincentives for early retirement proof important. Institutional effects differ by gender, though. Furthermore, the results point to the importance of social policies supporting labour market participation throughout the life‐course: social investment in human capital and public services clearly supports extending working lives.