COMPARATIVE SOCIAL POLICY- BENIM NOTLARIM target resources to those most in need but can also lead to stigmatization

and reduced uptake due to administrative barriers.

Horizontal and Vertical Redistribution

Horizontal Redistribution refers to the redistribution across different life

stages or groups with varying risks (e.g., young vs. old, employed vs.
unemployed). It often involves social insurance schemes where
contributions are pooled and benefits are distributed based on need or risk.

Vertical Redistribution involves transferring resources from wealthier

individuals to those with lower incomes. This is typically achieved through
progressive taxation and means-tested benefits aimed at reducing income
inequality.

Systems of Social-Risk Protection

Topic 1: Concepts and Terminology in Comparative Social Policy These systems are designed to mitigate life-course and labor market risks
In the context of comparative social policy, several key concepts and associated with industrial capitalism. They emerged alongside nation-
terminologies are essential for understanding the dynamics of welfare states and notions of citizenship rights, providing a safety net against
systems. Here is an overview of these concepts based on the provided unemployment, illness, and old age.
sources: The development of these systems was influenced by the rise of industrial
Deservingness, Less Eligibility, and Means-Testing capitalism, which created new social risks and necessitated collective
solutions through welfare states.
Deservingness refers to the criteria used to determine who is eligible for
welfare benefits. It often involves judgments about the moral worthiness of Welfare Capitalism
recipients, which can influence public support for welfare programs. Welfare Capitalism describes a system where capitalist economies provide
Less Eligibility is a principle originating from the English Poor Laws, social welfare benefits. It balances market-driven economic policies with
suggesting that conditions for receiving welfare should be less favourable social policies aimed at protecting citizens from market failures.
than the lowest-paid labour, to ensure that welfare does not become more This system varies significantly across countries, influenced by historical,
attractive than work. political, and cultural factors. Different models include liberal, conservative-
Means-Testing involves assessing an individual’s financial means to corporatist, and social-democratic welfare states, each with distinct
determine eligibility for certain welfare benefits. This approach aims to approaches to redistribution and social protection.

1
These concepts form the foundation of comparative social policy analysis,
helping scholars understand how different countries address social risks
and inequalities through their welfare systems.

2
 Welfare was primarily provided by extended families, communities,
and through relationships between landlords and tenants. Private
property owners and guilds also played roles in supporting artisans
and shopkeepers.
Poor relief was often managed through charity, targeting groups like
beggars, vagabonds, and landless workers. This relief was typically
conditional and discretionary, meaning it was not seen as a right or
entitlement but rather as a result of negotiation between the poor and
the elites.
Control Strategy for Elites
For elites, providing poor relief served as a control strategy. It helped
maintain social order by ensuring that the poor remained dependent
on their goodwill, thus stabilising the existing social hierarchy.
The main motive for elites to provide relief was to prevent social
Topic 2: Pre-Industrial Poor Relief - Van Leeuwen (1994), 'Logic
unrest and maintain their power. By controlling the distribution of aid,
of Charity: Poor Relief in Preindustrial Europe'
they could influence the behaviour of the poor to align with their
Before the advent of industrial capitalism, the concept of poor relief interests.
in Europe was characterised by a variety of informal and community-
Survival Strategy for the Poor
based support systems rather than organised state welfare. Here are
the key points regarding this period: For the poor, accepting relief was a survival strategy. It provided
them with the necessary resources to live, albeit under conditions set
Risks and Public Responsibility
by those in power. This arrangement often involved a bargaining
Pre-industrial societies faced numerous risks, such as war and process where the poor had limited negotiating power. If the poor
famine. However, these were not widely recognised as public accept poor relief, they have to behave as the elites want them to
responsibilities. There were markets, but not labour markets as we behave.
understand them today, and states existed without the structures of
Overall, the history of poor relief before industrial capitalism
modern welfare states.
highlights a system where welfare was largely informal, driven by
Sources of Welfare

3
local customs and power dynamics rather than institutionalised state
policies.

4
 Role of the Church: The Catholic Church played a central role in
organising poor relief, primarily through alms and begging. This
involvement reinforced the church’s influence in social welfare and
moral guidance.
Protestant (Northern Europe) Poor Relief
Work Ethic: Influenced by reformers like Luther and Calvin,
Protestant regions redefined work as a means to please God and
escape poverty. Being poor was often equated with idleness,
reinforcing a strong work ethic as a religious duty.
Deserving vs. Undeserving Poor: There was a stricter distinction
between the “deserving” and “undeserving” poor. This led to more
rigorous scrutiny of unemployed able-bodied individuals,
Topic 3: Catholic vs. Protestant Forms of Poor Relief emphasising self-reliance and responsibility.

Kahl, S. (2005), 'The Religious Roots of Modern Poverty Policy Types of Relief: Protestant areas distinguished between outdoor (aid
given without requiring institutionalisation) and indoor relief (aid given
The historical approaches to poor relief in Catholic and Protestant
within institutions), with Calvin advocating for less eligibility—
regions have had lasting influences on how poverty is perceived and
ensuring that welfare conditions were less favourable than the
addressed today.
lowest-paid labour.
Catholic Poor Relief
State Role: The state, rather than the church, took on a greater role
Perception of Elites and the Poor: In Catholic regions, the elites were in protecting communities from the “undeserving” poor while
often perceived as idle (reluctance to work), while being poor was providing discretionary social assistance to those deemed truly
associated with the necessity to work for a living. There was a strong needy. This often involved means-testing to ensure aid was targeted
moral and religious duty for the elites to help the poor. effectively.

Entitlement to Alms(help\support): The poor felt a sense of These differing approaches reflect broader theological and cultural
entitlement to receive alms, which was contingent upon displaying attitudes towards poverty and welfare, influencing modern welfare
good moral behaviour. This system emphasised a reciprocal systems’ design and public perceptions of poverty.
relationship where the poor were expected to demonstrate
worthiness through their conduct.
5
Topic 4: Punishing and correcting the poor – ‘out-door’ vs. ‘in- •Moral and Social Control: The use of workhouses reflected a
door’ poor relief workhouses and poor houses (almshouses) belief that poverty was linked to moral failings such as idleness. By
placing the poor in these institutions, authorities aimed to reform their
Before the development of modern welfare states, poor relief in
behaviour through structured routines and work requirements. This
Europe was characterised by two main types: ‘out-door’ and ‘in-door’
approach was aligned with Protestant views that emphasised self-
relief. These systems were used to manage poverty and control the
discipline and industriousness as pathways out of poverty.
poor population, reflecting broader social attitudes towards poverty.
•Less Eligibility Principle: A key principle guiding ‘in-door’ relief
Out-Door Poor Relief
was ‘less eligibility,’ which ensured that conditions within these
• Nature and Implementation: ‘Out-door’ relief involves institutions were worse than those available through low-paid labour.
providing aid to the poor without requiring them to live in an This was intended to encourage self-reliance and discourage
institution. This form of relief was more flexible and could be dependency on public assistance.
administered directly in the community where the individuals lived. It
Overall, these systems of poor relief served dual purposes: they
was often used to maintain a labour reserve by providing minimal
provided minimal support necessary for survival while exerting social
support to those who could not sustain themselves through work
control over the poor, reflecting broader societal attitudes towards
alone, thus preventing migration to cities during times of economic
poverty and responsibility. The legacy of these approaches can still
downturn.
be observed in contemporary welfare policies that distinguish
•Economic Rationale: This system was economically rational between deserving and undeserving recipients based on their
for local elites as it allowed them to retain a stable workforce that perceived willingness to work.
could be mobilised when labour demand increased, such as during
harvest seasons. However, it was also seen as less effective in
controlling the behaviour of the poor compared to institutional
options.
In-Door Poor Relief
•Workhouses and Poor Houses: ‘In-door’ relief required the
poor to live in institutions such as workhouses or almshouses. These
institutions were designed not only to provide shelter but also to
enforce discipline and instil work ethics among the residents. The
conditions were often harsh, intended to deter all but the most
desperate from seeking assistance.
6
 Unemployment and Economic Crises: Unemployment and economic crises
were increasingly seen as systemic issues rather than results of individual
unwillingness to work. This recognition underscored the need for collective
solutions to labour market risks.

Challenges of Unregulated Capitalism

Low Wages and Child Labor: Unregulated capitalism often resulted in

wages that were too low for a decent standard of living, leading to
widespread poverty among wage-earners. Child labour was prevalent,
exacerbating family hardships.

Life-Course Risks: The poverty experienced by wage-earners was closely

linked to the family cycle, highlighting life-course risks that required
attention beyond immediate economic conditions.
Topic 5: The rise of industrial capitalism brought about significant social Hudson et al. (2008, p. 15): ‘Financial support to people whose income is
changes and risks that necessitated new approaches to welfare and social threatened by common events or contingencies that might make it difficult
policy. for them to generate sufficient income through paid employment’
The ‘Social Question’ Need for Welfare State Solutions
Commodification of Labor: The industrial mode of production, characterised Compromised Social Stability: The deprived living conditions resulting from
by factories, led to the commodification of labour. Workers became seen as industrial capitalism threatened social stability and hindered economic
commodities within the economic system, subject to market forces and development. These challenges underscored the need for a collective
economic fluctuations. welfare state solution to protect against new social risks.
Urbanisation and Poverty: Industrialization prompted mass migration from Emergence of Welfare States: In response, welfare states began to
rural areas to urban centers, resulting in concentrated urban poverty and emerge as systems designed to provide social protection against these
the emergence of slums. These conditions highlighted the inadequacy of risks, marking a shift from informal, community-based support to
existing welfare arrangements. institutionalized social solidarity.
Recognition of Socially Produced Risks The development of welfare states during this period reflected a growing
Mass Poverty as a Social Risk: Elites began to recognise that mass consensus on the need for structured interventions to address the systemic
poverty was not merely a result of individual failings but was a socially risks posed by industrial capitalism. This transformation laid the
produced risk associated with the economic system itself. This shift in groundwork for modern welfare policies aimed at mitigating social
understanding marked a significant change in attitudes towards poverty. inequalities and ensuring economic stability.

7
Commodification refers to the process by which goods, services, ideas, or
people are transformed into commodities or objects of trade.

In the context of social policy, commodification often involves the treatment

of social goods and services—such as healthcare, education, and welfare
—as commodities that can be bought and sold in the marketplace. This
perspective can lead to a focus on efficiency, cost-effectiveness, and
consumer choice over other values such as equity, accessibility, or
community well-being.

Decommodification: The concept is contrasted with decommodification,

which refers to policies or practices that reduce individuals’ reliance on the
market for their well-being. Decommodification is often associated with
welfare state measures that provide social security and services based on
need rather than market participation.

8
 used to support individuals during times when they are unable
to work, such as retirement or unemployment.
- Vertical Redistribution: This involves redistribution between
individuals with different family responsibilities, facilitated
through mechanisms like family allowances.
Abolishing Poverty: Beveridge argued that poverty could be
abolished through redistribution within the working classes. By
pooling resources and risks, social insurance systems aim to provide
financial stability and security.
Horizontal Redistribution and the Welfare State
Intrapersonal Redistribution: The concept of horizontal redistribution
Topic 6: The social insurance approach to managing social risks is partly intrapersonal, meaning it occurs within an individual’s
emerged as a response to the challenges posed by industrial lifetime. Contributions made during periods of employment are used
capitalism, particularly the issues of poverty and economic instability. to fund benefits during times when an individual is not earning, such
This approach is exemplified by the work of Lord Beveridge in 1942, as during illness, unemployment, or retirement.
who laid out a comprehensive plan for social security in Britain.
‘Cradle to Grave’ Security: This approach provides a safety net from
Lord Beveridge’s Plan “cradle to grave,” ensuring that individuals are protected throughout
their lives against various social risks.
Causes of Want: Beveridge identified two primary causes of poverty:
interruption or loss of earning power and large family sizes. His plan Piggy-Bank Function: The welfare state acts as a collective savings
aimed to address these issues through a dual strategy of income mechanism, where taxes and contributions are collected to fund social
redistribution. insurance benefits. This system helps smooth income over an individual’s
lifetime and provides security against unforeseen economic shocks.
Redistribution of Income: The plan proposed a double redistribution
of income: The social insurance model has become a cornerstone of welfare states,
aiming to mitigate life-course risks and provide economic stability through
- Horizontal Redistribution: This involves redistribution over an structured income redistribution mechanisms. This approach reflects a shift
individual’s life course, from periods of earning to periods of from ad hoc charity-based poor relief to institutionalised welfare systems
not earning. Social insurance schemes function like a “piggy- designed to address systemic social risks.
bank,” where contributions made during working years are

9
 Support for Capitalism: Welfare states were seen as underpinning
capitalism within parliamentary democracies. By stabilising consumption
and smoothing income over individuals’ lifetimes, welfare states helped
ensure productivity and competitiveness at the national level.

Economic Stability: The introduction of social insurance programs provided

income security, which in turn stabilised consumption patterns. This stability
was crucial for maintaining economic growth and competitiveness, as it
mitigated the adverse effects of economic downturns on individuals’
livelihoods.

Income Redistribution

Horizontal Redistribution: Social protection involved horizontal

redistribution across an individual’s life course, from times of earning to
times of not earning. This “piggy-bank” function allowed individuals to
contribute during their working years and draw benefits during retirement or
periods of unemployment.
Topic 7: Social Protection: A Radically New Policy Solution
Vertical Redistribution: Although primarily focused on horizontal
The development of social protection systems marked a significant shift in redistribution, welfare states also incorporated elements of vertical
how societies addressed social risks and poverty, particularly in the context redistribution through progressive taxation and targeted benefits,
of industrial capitalism. addressing income inequalities within society.
Coordination by the Nation-State The emergence of social protection systems represented a transformative
Role of the Nation-State: (De Swaan) The nation-state became the central approach to addressing the social risks associated with industrial
coordinator in efforts to build and expand social insurance and protection capitalism. By institutionalising social solidarity and coordinating efforts at
programs. This involved collaboration between labour unions and the national level, these systems provided a foundation for modern welfare
employers, reflecting a collective approach to managing social risks. states that continue to play a critical role in economic and social policy
today.
Inclusion of All Citizens: Social protection systems were designed to
include all citizens on relatively equal terms, emphasising civil, political,
and social rights. This inclusivity differed from earlier systems that were
often conditional and discretionary.

Welfare Capitalism

10
 Inclusion and Rights

Universal Coverage: A hallmark of welfare states is the inclusion of all

citizens under more or less the same terms, ensuring access to civil,
political, and social rights. This universality helps to mitigate social risks
across different life stages and economic conditions.

Social Insurance and Protection: Welfare states coordinate efforts among

various stakeholders, including labour unions and employers, to build
comprehensive social insurance programs. These programs aim to protect
individuals against social risks such as unemployment, illness, and old age.

Economic Stability and Welfare Capitalism

Income Smoothing: By providing a safety net through social insurance and

welfare programs, welfare states help smooth income fluctuations over an
individual’s lifetime. This stability supports consumption patterns and
contributes to economic growth.
Topic 8: Blueprint of All Welfare States
Supporting Capitalism: Welfare states underpin capitalist economies by
The concept of a welfare state involves a structured system of social stabilising consumption and ensuring productivity. They help maintain
protection designed to manage social risks and redistribute resources competitiveness by addressing the social risks that could otherwise hinder
within society. Caroline Dewilde: economic development.
Redistribution Within Income Strata (layer) The Role of the State
Horizontal Redistribution: Welfare states typically engage in horizontal Nation-State Coordination: The nation-state plays a central role in
redistribution, which involves transferring resources within similar income coordinating welfare efforts, ensuring that social protection systems are
groups over an individual’s life course. This redistribution is often achieved comprehensive and inclusive. This coordination reflects a collective
through social insurance systems, where individuals contribute during their approach to managing social risks and promoting economic stability.
working years and receive benefits during periods of need, such as
retirement or unemployment. Overall, the blueprint of welfare states involves a combination of income
redistribution mechanisms, universal coverage, and coordinated efforts to
Vertical Redistribution: While primarily focused on horizontal redistribution, manage social risks. These elements work together to provide economic
welfare states also incorporate vertical redistribution, which involves security and support the functioning of capitalist economies within
transferring resources from wealthier to poorer individuals. This is often parliamentary democracies.
facilitated through progressive taxation and means-tested benefits.

11
Topic 9: Deserving Poor
Horizontal Redistribution
Characteristics: The “deserving poor” are typically those who are unable to
help themselves due to circumstances beyond their control, such as the Life-Cycle Poverty: Horizontal redistribution primarily addresses life-cycle poverty,
elderly, children, the sick, and the disabled. For these groups, poverty is which refers to the financial challenges individuals face at different stages of their
seen as an unfortunate event rather than a result of personal failings. lives. This type of redistribution involves providing benefits during periods of need,
financed by contributions collected during times of relative sufficiency, such as
Justification for Aid: The deserving poor are often considered worthy of employment. Mechanism: The system operates on the principle that all individuals
state assistance. Their situation justifies public support aimed at alleviating are potential contributors and beneficiaries. Resources are redistributed within
their hardship because they are perceived as victims of circumstances society across people at different life-cycle stages. An example of this is the Pay-
rather than contributors to their own poverty. As-You-Go (PAYGO) pension system, where current workers’ contributions fund
retirees’ pensions. Purpose: The goal is to smooth income over an individual’s
Undeserving Poor lifetime, ensuring financial stability during periods when they are not earning, such
as retirement or unemployment.
Characteristics: The “undeserving poor” are generally those of working
age, particularly men, who are expected to provide for themselves and their Vertical Redistribution
families through employment. Poverty in this group is often attributed to Resource Redirection: Vertical redistribution involves redirecting resources from
idleness, indolence, or even criminal behavior. those with sufficient means to those in need, without a direct link between payment
and receipt. This type of redistribution is aimed at addressing structural inequalities
Policies of Control: For the undeserving poor, poverty is assumed to be
within society. Beneficiaries: Those who benefit from vertical redistribution may
self-inflicted, justifying punitive measures designed to encourage or force
never be in a position to contribute financially to the system. They require support
them into employment and self-sufficiency. This perspective has historically at any time and potentially for extended periods. Examples include single mothers
led to policies that emphasize work requirements and reduced benefits for or individuals who experience long-term unemployment. Mechanism: Vertical
those deemed able-bodied but unemployed. redistribution often involves means-tested social assistance programs that provide
support based on need rather than contributions. This approach ensures that
12
resources are directed towards those most in need, regardless of their ability to
pay into the system.

13
 Situations of Poverty and Inequality: Situations characterized by
poverty, hardship, and extreme inequality are considered a “lack of
welfare.” Such conditions indicate that individuals or groups do not
have access to the minimal acceptable way of life as defined by
societal standards.
Universal Rights and Social Inclusion
European Council Definition: According to the European Council
(1984), the poor are defined as those whose resources are so limited
that they are excluded from the minimal acceptable way of life in
their society. This definition highlights the importance of addressing
both material and social dimensions of poverty.
Topic 10: Economic Well-Being and Life Chances Universal Declaration of Human Rights: Articles 25 and 26
emphasise that all humans have a right to education and a standard
Definition of Welfare: Welfare is understood as economic well-being,
of living adequate for their health and well-being. These rights
which involves having sufficient resources to ensure a “good life.”
underscore the importance of welfare systems in promoting social
This includes not only meeting basic physical needs like food and
inclusion and equality.
shelter but also realising life chances that allow individuals to
achieve their full potential with personal autonomy. Mixed Economy of Welfare: Variations Across Time and Place
Social Participation: An essential component of welfare is the ability The concept of a mixed economy of welfare refers to the diverse
to participate socially in society without shame. This implies that ways in which welfare provision is organised and delivered, involving
welfare systems should enable individuals to engage in societal a combination of state, market, family, and voluntary sector
activities and contribute meaningfully to their communities. contributions. This approach varies significantly across different
historical contexts and geographical locations.
Material Well-Being and Social Aspects
Beyond Physical Needs: While fulfilling physical needs is crucial,
welfare also involves addressing the social aspects of well-being.
This includes ensuring access to education, healthcare, and
opportunities for personal development.

14
Page 11: Who should get what and why? instance, merit-based systems might encourage employment, while
needs-based systems can provide essential support but may also
We should give more to those who work!
create dependency if not well-designed.
We should treat everyone equally!
• Social Equity: Equal treatment aims to promote social equity
We should give more (only) to the poor! by ensuring everyone has the same opportunities and access to
resources, potentially reducing social disparities.
Principles of Distribution
• Targeting Poverty: Needs-based systems are crucial for
1. Merit-Based Distribution: social insurance
targeting poverty directly, aiming to lift individuals out of poverty by
This principle suggests that more benefits should be given to those providing targeted assistance.
who work. The idea is that rewarding work encourages productivity
Each of these approaches has its advantages and challenges, and
and self-reliance. It aligns with the notion that individuals who
the choice often reflects broader societal values and goals regarding
contribute to the economy through labour should receive greater
fairness, efficiency, and social justice in welfare provision.
support.
Three approaches to social transfers (Espring Anderson)
2. Equal Treatment: universal
Under this approach, everyone is treated equally, regardless of their
circumstances. This principle emphasises fairness and universality,
suggesting that all individuals should have access to the same level
of benefits, which can help reduce inequality.
3. Needs-Based Distribution: social assistance
This perspective argues for giving more to those who are poor or in
greater need. It focuses on addressing poverty and social exclusion
by directing resources to those who lack sufficient income or
resources. This approach aims to provide a safety net for the most
vulnerable members of society.
Regressive tax: rich pay less percentage of their income.
Considerations in Social Policy
Social assistance is universal; you can apply anytime, but you can
Economic Implications: The choice between these principles affects get it only when needed. You have more protection for the poor in
economic incentives and can influence labour market behaviour. For social assistance.
15
 Examples and Comparisons
1.Beveridgean vs. Bismarckian Social Insurance:
•Beveridgean Model: Named after William Beveridge, this
model emphasises universal coverage and flat-rate benefits funded
through taxation. It aims for broad access to social services without
direct linkage to individual contributions.
•Bismarckian Model: Named after Otto von Bismarck, this
model is based on social insurance principles where benefits are
linked to employment and contributions. It typically involves
earnings-related benefits and is funded through payroll taxes.
Hudson et al., (2008). Social Security. In The Short Guide to Social
2.Poverty-Testing vs. Affluence-Testing:
Policy- Social Policy models
•Poverty-Testing: Benefits are provided based on an
1.Poverty-Based Social Assistance: This system targets individuals
individual’s or household’s income being below a certain level.
or families with insufficient income, providing means-tested benefits
to alleviate poverty. It focuses on those who fall below a certain •Affluence-Testing: Benefits are reduced or denied if an
income threshold, ensuring they receive the necessary support to individual’s or household’s income exceeds a certain level, focusing
meet basic needs. on limiting support to those who truly need it. (affordability test) e.g.
Australia/test affluence rather than poverty.
2.Contribution-Based Social Insurance: Benefits under this system
are linked to previous contributions made by individuals, typically These hybrid models reflect the complex realities of social policy,
through employment. Examples include unemployment insurance where countries often blend elements from different systems to
and pensions, where the level of benefit is often related to the address their unique social and economic contexts effectively.
amount and duration of contributions made by the beneficiary.
3.Residency-Based Universal Benefits: These benefits are provided
universally to all residents, regardless of income or employment
history. They aim to ensure basic levels of support for everyone,
such as universal healthcare or child benefits.

16
 Cons of Social Assistance-Type Benefits
Stigmatisation: (definition: the process by which certain individuals
or groups are labelled and devalued based on specific
characteristics, behaviours, or identities that deviate from societal
norms.) Recipients of social assistance may face social stigma,
which can discourage individuals from applying for benefits even
when they are eligible.
Non-Take-Up: Due to stigma or complex application processes,
some eligible individuals might not claim the benefits they are
entitled to, reducing the effectiveness of these programs.

Pros of Social Assistance-Type Benefits Fraud and Abuse: There is a risk of fraud and abuse within social
assistance programs, where individuals may claim benefits they are
Vertical Redistribution: Social assistance benefits aim to
not entitled to, leading to inefficiencies and increased costs.
redistribute wealth from higher-income groups to lower-income
groups, helping to reduce income inequality and provide support Administrative Complexity and Expense: Means-tested programs
where it is most needed. can be administratively complex and costly to manage due to the
need for detailed eligibility assessments and ongoing monitoring.
Poverty Alleviation: These benefits are crucial for alleviating
poverty by providing a safety net for those who lack sufficient income Limited Public and Political Support: Programs targeted at the
to meet their basic needs, thereby improving their quality of life. poor often receive limited public and political support, leading to
underfunding and inadequate benefit levels—a phenomenon
Cost-Effective: Social assistance programs can be relatively
sometimes summarised by the phrase “programs for the poor
inexpensive for governments to implement compared to other types
become poor programs.”
of welfare programs, as they typically require less tax revenue due to
their targeted nature. Discourages Labor Market Participation (Poverty Trap): There is
a concern that generous social assistance benefits might discourage
Economic Efficiency: By focusing resources on those who need
recipients from seeking employment, as earning an income could
them most, social assistance can be an economically efficient way of
result in a loss of benefits, creating a “poverty trap.”
addressing poverty and inequality without excessive spending.

17
 Vertical Redistribution (“Paradox of Redistribution”): Although
universal benefits are not directly targeted at the poor, they can still
contribute to vertical redistribution by ensuring that everyone
receives a basic level of support, which can help reduce overall
inequality.
Cons of Universal-Type Benefits
Expensive: Providing benefits universally can be costly for
governments because it involves distributing resources to a larger
group of people, including those who may not need financial
assistance.
Economically Inefficient: Universal benefits may be seen as
economically inefficient because they allocate resources to
Pros of Universal-Type Benefits individuals regardless of need, potentially diverting funds from those
who require more substantial support.
Low Under- and Overuse: Universal benefits are available to
everyone within a specified group, reducing the risk of eligible Matthew Effects: This term refers to the phenomenon where those
individuals not receiving benefits (underuse) and ensuring that who are already better off benefit more from universal programs than
benefits are not improperly given to ineligible individuals (overuse). If those who are worse off. For example, wealthier individuals might
you have kids, you get it automatically, so you do not need to apply save or invest their universal benefits, while poorer individuals might
it. need to spend them immediately on necessities.
Administratively Cheap and Simple: Because universal benefits Overall, while universal-type benefits offer simplicity and inclusivity,
do not require means-testing or complex eligibility criteria, they are they also present challenges in terms of cost and economic
typically easier and less expensive to administer compared to efficiency. Balancing these factors is crucial for policymakers aiming
targeted programs. to design effective social welfare systems.
Broad Public and Political Support: Universal benefits tend to
garner widespread support because they are seen as fair and
inclusive, benefiting all members of society rather than just specific
groups.

18
 Disincentives for Undeclared Work: Since benefits are tied to formal
employment and contributions, there is a disincentive for undeclared work,
as this would not count towards future benefit entitlements.

Vertical Redistribution and Poverty Alleviation: While primarily

earnings-related, social insurance can also contribute to vertical
redistribution by providing higher benefits to those with lower lifetime
earnings relative to their contributions.

Cons of Social Insurance-Type Benefits

Matthew Effects: These occur when higher-income individuals receive

more substantial benefits because they have contributed more over their
working lives, potentially exacerbating inequality rather than reducing it.

High Cost of Labour: The requirement for contributions can increase the
Pros of Social Insurance-Type Benefits cost of labour for employers, potentially impacting employment levels and
Broad Public and Political Support (“Earned Entitlements”): Social economic competitiveness.
insurance benefits are often seen as earned entitlements because they are Dependency on (Human) Labour: Social insurance systems rely heavily
based on contributions made by individuals. This perception can lead to on a stable workforce making regular contributions. Changes in labour
strong public and political support. market dynamics, such as increased automation or shifts towards gig work,
Involvement of Social Partners: These systems often involve can challenge these systems.
collaboration between the government, employers, and employees, which Disadvantageous for Labor Market Outsiders: Groups such as women,
can enhance the legitimacy and sustainability of the programs. lower-educated individuals, and ethnic minorities who may have less stable
Maintains Living Standards: Social insurance benefits are designed to employment histories can be disadvantaged by social insurance systems
replace a portion of lost income, helping individuals maintain their living that require consistent contributions.
standards during periods of unemployment, illness, or retirement. Complex Administration: Managing contribution records and calculating
Incentives to Work (Avoids Poverty Trap): By linking benefits to previous benefits based on individual earnings histories can make social insurance
earnings and contributions, social insurance can create incentives for systems administratively complex and costly to operate.
individuals to work and contribute to the system, avoiding the disincentives These pros and cons reflect the strengths and challenges associated with
associated with means-tested benefits. social insurance-type benefits, highlighting the need for careful design to
balance equity, efficiency, and sustainability in welfare provision.

19
Trade-offs in social policy: The paradox arises because while targeting seems like a direct way to help
the poor, it can undermine the political coalitions necessary for substantial
redistribution. Universal programs, by benefiting a wider population,
including the middle class, can foster greater public support for welfare
spending and thus achieve greater redistributive outcomes.

Explanation of Figure 3

Figure 3 in Korpi and Palme’s study illustrates the “Index of Targeting of

Transfer Income and Income Redistribution” across 11 OECD countries.
This figure likely shows how different countries’ welfare systems balance
targeting versus universality and their impact on income redistribution. The
index measures how concentrated transfer incomes are on low-income
households versus being spread across a broader population.

The analysis suggests that countries with more universalistic welfare

systems (such as those in Scandinavia) tend to achieve higher levels of
income redistribution compared to those with more targeted systems (like
the United States). This is because universal systems not only provide
The concept of The Paradox of Redistribution by Walter Korpi and Joakim
direct financial support but also foster societal solidarity and political
Palme, as discussed in their 1998 paper, explores the trade-offs in social
backing for redistributive policies.
policy between universality and selectivity. This paradox suggests that
targeting benefits specifically at the poor, while seemingly efficient, may Implications
actually be less effective in reducing overall poverty and inequality
This paradox challenges the traditional view that targeting is always the
compared to universal benefits that include all citizens.
most efficient way to reduce poverty. Instead, it highlights the importance of
Universality vs. Selectivity considering the political and institutional context of welfare policies.
Universal programs may require higher initial costs but can lead to more
Korpi and Palme argue that universal social policies, which provide benefits
sustainable and effective poverty reduction through broader societal
to all citizens regardless of income, tend to be more successful in reducing
support.
poverty and inequality than targeted policies aimed only at low-income
groups. This is because universal programs often enjoy broader political By understanding this paradox, policymakers can better design social
support, leading to larger redistributive budgets and more comprehensive policies that effectively reduce inequality while maintaining broad public
coverage. In contrast, targeted programs can create divisions between support. The insights from Korpi and Palme’s work continue to be relevant
different income groups, potentially reducing political support for in debates over welfare state design and social policy effectiveness.
redistribution as a whole.
GINI coefficient: measure of income inequality (equal 0 - inequal 1)
20
 3.Volume of Social Spending: Universal welfare states, with larger
redistributive budgets, tend to spend more on social protection compared
to targeted systems.

4.Redistribution Effectiveness: Greater social spending in

universal systems leads to more effective redistribution, reducing reliance
on private alternatives which do not redistribute wealth.

5.Private Provision: In universal systems, the need for private

welfare provision is reduced, leading to more equitable outcomes.

6.Paradoxical Outcome: The paradox arises because targeting

resources specifically at the poor through means testing results in less
overall redistribution than universal approaches, which spread benefits
across a wider population base.

These assumptions form a causal chain from institutional design through

(people may prefer to private welfare if it not worth to contribute)
class dynamics and public support to actual redistributive outcomes. The
Korpi and Palme’s “paradox of redistribution” posits that welfare systems empirical evidence supporting these assumptions has been debated, with
aiming to target resources specifically at the poor are less effective at some studies confirming the paradox while others challenge its applicability
reducing poverty and income inequality than those adopting a more in modern contexts.
universal approach. The causal assumptions underlying this paradox are
______
depicted in Figure 1 of their work, which outlines a complex chain of
institutional and social dynamics leading to redistributive outcomes. 1. Size of Redistributive Budget Reflects Structure of Welfare State
Institutions
Key Causal Assumptions in K&P’s Paradox (Gugushvili & Laenen 2021)
The size of a country’s redistributive budget is closely linked to the
1.Institutional Structure: The type of welfare state (universal vs.
structure of its welfare state institutions. Welfare states with more
targeted) influences class coalitions and public support for redistribution.
universalistic designs tend to have larger redistributive budgets because
Universal systems tend to foster alliances between the middle and working
they include broader segments of the population, fostering greater political
classes, enhancing support for redistribution, whereas targeted systems
support for funding these programs. This support often translates into
may align the middle class with the upper class, reducing support.
higher levels of redistribution compared to systems that are more targeted
2.Size of Redistributive Budget: Higher public support in towards low-income groups.
universal systems translates into larger redistributive budgets due to
2. Trade-off Between Low-Income Targeting and Size of Redistributive
broader political backing.
Budget

21
There is a recognised trade-off between targeting benefits specifically at
low-income groups and maintaining a large redistributive budget. Targeted
benefits may seem efficient in directing resources to those most in need,
but they can lead to stigmatisation and reduced political support from
middle-income groups who do not directly benefit from these programs.
This can result in smaller overall budgets for redistribution.

3. Outcomes of Market Redistribution vs. Earnings-Related Insurance

Programs

Market-based income distribution typically results in greater inequality

compared to earnings-related insurance programs. Earnings-related
benefits, which are common in more universalistic welfare states, tend to
provide better income replacement for a broader segment of the
population, thereby reducing inequality more effectively than market
outcomes alone. In universal systems, the poor get a smaller pie, but the cake is bigger than
the selective one. Because the redistributed budget is bigger in a universal
4. Stigmatization and Non-Take-Up system, everyone contributes, and everyone gets their pie. So, in the end,
the poor get more in the universal system.
Targeted welfare programs often carry a stigma, which can discourage
eligible individuals from claiming benefits, leading to non-take-up. This
stigma arises because targeted programs are often perceived as charity
rather than entitlement, affecting the dignity and social standing of
beneficiaries. Universal programs, by contrast, avoid this issue as they are
seen as rights available to all citizens, thus encouraging higher take-up
rates.

22
 This is because targeted programs can lack broad political support, limiting
their funding and effectiveness in reducing inequality.

Figure 5: Maximum Public Pensions and Private Pension

Expenditures: 18 OECD Countries, ca. 1980

Figure 5 compares public pension provisions with private pension

expenditures across 18 OECD countries around 1980. This figure likely
illustrates how countries with more substantial public pension systems tend
to have lower private pension expenditures. This reflects the idea that
comprehensive public pensions can “crowd out” private pension markets by
providing adequate income replacement through public means.

In countries where public pensions are less generous or more earnings-

related, individuals might rely more on private pensions to maintain their
living standards post-retirement. This reliance on private pensions can lead
to greater inequality, as access to these pensions often depends on one’s
The analysis of the Paradox of Redistribution by Korpi and Palme (1998)
ability to save or contribute during their working life.
involves examining how different welfare state models impact income
redistribution and the size of redistributive budgets. The figures mentioned Overall, these figures underscore the broader argument in Korpi and
in the slide illustrate key aspects of this analysis. Palme’s work: universal welfare systems tend to achieve better
redistribution outcomes than those heavily reliant on targeting or private
Figure 2: Relative Size of the Redistributive Budget and Income
provisions. This is because they can maintain larger redistributive budgets
Redistribution: 11 OECD Countries
and provide more equitable social insurance coverage.
Figure 2 in Korpi and Palme’s study likely demonstrates the relationship
Negative correlations between two figures.
between the size of a country’s redistributive budget and its effectiveness in
income redistribution among 11 OECD countries. The figure would show 2nd figure: more income replacement less people spent on private pensions.
that countries with larger redistributive budgets, often associated with
(Recommendation for LLER students: if you don’t understand the data or
universal welfare systems, tend to achieve more significant income
statistics, try to focus on the argument and outcome.
redistribution. This supports the argument that universal systems, by
involving broader segments of society, can sustain larger budgets due to
wider political support, leading to more effective poverty and inequality
reduction.

Countries with smaller redistributive budgets, often those with targeted

welfare systems, may struggle to achieve similar levels of redistribution.
23
 Direct Measurement of Institutional Design: They suggest using a
universalism index that measures institutional design directly, rather than
relying on outcomes influenced by external factors.

Indicators Used:

- Percentage of Means-Tested Benefits: This reflects the degree to

which social benefits are targeted versus universal.
- Proportion of Private Spending in Total Social Expenditures: This
indicates the extent to which private provisions supplement public
welfare, affecting universality.

Time-Series Cross-Sectional Design: This approach allows for a better

causal analysis by distinguishing between variations across countries and
changes within countries over time.

(Jacques & Noel, 2018): is this still true? Actual Changes in Welfare States

Why Does This Matter? The study notes that welfare states have evolved since the 1980s, with
some universal systems becoming more selective and vice versa. This
Understanding whether the paradox is still relevant is crucial for designing policy transfer suggests that the clear-cut distinction between targeting and
effective welfare policies. The original study by Korpi and Palme, based on universalism has become blurred.
data from 1985, used cross-sectional correlations among 11 countries to
argue that universal welfare systems are more effective at reducing Conclusion
inequality than targeted ones. However, this analysis faced several Jacques and Noël’s analysis suggests that while there have been changes
criticisms: in welfare state policies, the paradox of redistribution still holds relevance
Cross-Sectional Limitations: The original study’s use of cross-sectional today. By focusing on institutional design rather than outcomes, they
data limited its ability to establish causality. provide evidence that universal welfare systems continue to support larger
redistributive budgets and more effective poverty reduction, aligning with
Influence of Exogenous Factors: The outcomes measured were influenced Korpi and Palme’s original argument but with a more nuanced
by external factors like population composition and economic crises, which understanding of modern welfare dynamics.
were not accounted for in the analysis.

Fixing the Problems

Jacques and Noël address these issues by proposing a more robust

methodological framework:
24
 thus maintain larger redistributive budgets, which can be more effective in
reducing inequality.

Table 1: Correlations Between Universalism and Various Measures of

Redistribution, 20 OECD Countries, 2000–2011

Table 1 shows the statistical correlations between the level of universalism

(as measured by the index) and different measures of redistribution, such
as income inequality reduction and poverty alleviation. Positive correlations
would suggest that higher levels of universalism are associated with
greater redistributive effects.

The table likely confirms that countries with more universal welfare systems
achieve better outcomes in terms of reducing income inequality and
poverty. This supports the idea that universal programs, by involving a
larger segment of the population, can sustain higher levels of redistribution
In their 2018 study, Jacques and Noël revisit the Paradox of Redistribution compared to targeted programs aimed only at low-income groups.
by focusing on the institutional design of welfare states rather than just
Overall, Jacques and Noël’s findings reinforce the relevance of the
outcomes. They use a universalism index to directly measure the degree of
Paradox of Redistribution in contemporary welfare states by demonstrating
universalism in social policies across 20 OECD countries from 2000 to
that institutional design—specifically, the degree of universalism—plays a
2011.
crucial role in determining redistributive outcomes.
Figure 1: Mean of Universalism Index, 20 OECD Countries, 2000–2011
Mediation effect: Universality mostly has an indirect effect on poverty
This figure likely presents the average level of universalism in welfare state reduction because of the size of the redistributive budget.
policies across 20 OECD countries over a period from 2000 to 2011. The
universalism index is constructed using two main indicators: the
percentage of social benefits that are means-tested and the proportion of
private spending within total social expenditures. A higher score on this
index indicates a more universalistic welfare system, characterised by
fewer means-tested benefits and a smaller role for private spending.

Countries with higher universalism scores tend to have welfare systems

that provide broad-based benefits to all citizens, reducing reliance on
means testing and private provisions. This approach aligns with the
argument that universal systems can garner broader political support and

25
 Netherlands: Introduced a “kindgebonden budget,” a child-related
allowance that varies based on household income, number of children, and
their ages. This means higher-income families receive lower benefits,
adding a layer of means-testing within the universal framework.

Belgium: Variations exist across regions, but generally, social supplements

depend on annual income and household size. This allows for regional
adjustments while maintaining a universal base.

Rationale Behind This Approach

The rationale for combining universal access with targeted supplements

includes several considerations:

Political Support: Universal programs tend to enjoy broader political

support because they benefit a wide range of citizens, including middle-
The concept of “targeting within universalism” in social policy seeks to class families. This support can lead to more substantial funding and
balance the benefits of universal programs with the efficiency of targeted sustainability for welfare programs.
assistance. This approach is exemplified by child benefit systems in the
Netherlands and Belgium, which combine universal access with targeted Efficiency and Equity: By adding targeted elements within a universal
supplements for low-income families. framework, these systems aim to efficiently allocate additional resources to
those most in need without stigmatising beneficiaries. This approach helps
Universal and Targeted Child Benefits address inequality while maintaining broad inclusivity.
Access and Level Flexibility: Regional variations and income-based supplements allow these
systems to adapt to local economic conditions and demographic changes,
- Universal Access: Both the Netherlands and Belgium provide child
ensuring that resources are directed where they are most needed.
benefits based on residency, ensuring all families have access to
basic support. Overall, targeting within universalism represents an effort to optimise
- Flat-Rate Benefits: These benefits are typically flat-rate, varying welfare systems by leveraging the strengths of both universal and targeted
with the age of the child, which simplifies administration and approaches. It seeks to maintain the broad appeal and political viability of
ensures a baseline level of support for all families. universal programs while enhancing their redistributive impact through
targeted supplements.
Recent Developments

Additional Low-Income Targeting:

26
 political shifts can lead to reductions in welfare spending even in countries
with strong universal systems.

Private Spending and Redistribution: The presence of private spending,

such as occupational pensions, can reduce the overall redistributive effect
of welfare systems. Private spending often benefits higher-income groups
more, thus reducing the level of redistribution achieved through public
welfare programs.

Effective Targeting within Universalism: Targeting within a universal

framework can be effective when it is embedded within a broader system of
universalism. This approach combines the strengths of both universal and
targeted systems by ensuring broad access while directing additional
resources to those who need them most.

Overall, the design and implementation of social policies reflect broader

Social policy models are inherently normative, reflecting underlying ideas societal values and priorities. The balance between universalism and
about how society should be structured, who should receive benefits, and targeting remains a critical consideration in achieving effective
the level of those benefits. These models are not neutral and are redistribution and poverty reduction.
influenced by different ideologies and societal values. Here are some key
take-home messages regarding social policy models:

Universal vs. Targeted Systems: Universal welfare systems, which

provide benefits to all citizens regardless of income, tend to garner more
public support compared to targeted systems that focus on low-income
groups. This increased support can lead to larger redistributive budgets, as
universal systems are often seen as more equitable and less stigmatising.

Redistributive Budgets and Poverty Reduction: Larger budgets in

universal welfare states can lead to more effective poverty reduction.
However, even with smaller budgets, accurate targeting of benefits can
compensate for the lack of resources by ensuring that those most in need
receive adequate support.

Vulnerability to Welfare Cuts: Despite having larger budgets, universal

welfare states are not immune to welfare cuts. Economic pressures or

27
 Deservingness: Deserving vs. Undeserving

The concept of deservingness is crucial in determining which groups

receive welfare benefits and how these benefits are perceived by the
public. Deservingness is often assessed based on several criteria,
including control over neediness, level of need, identity, attitude, and
reciprocity.

Deserving Groups: Typically include the elderly, sick, and disabled. These
groups are often perceived as having little control over their circumstances
and thus more deserving of support. They are generally seen as having
contributed to society (reciprocity) and evoke greater empathy (identity).

Undeserving Groups: Often include able-bodied unemployed individuals

who might be perceived as having more control over their situation. Public
Policy Design: Universal vs. Selective opinion tends to be less favourable towards providing them with
Policy design refers to how welfare policies are structured, particularly unconditional support due to perceptions of personal responsibility for their
whether they are universal or selective. Universal policies provide benefits condition.
to all individuals within a certain category (e.g., all elderly people), Interplay Between Design and Deservingness
regardless of their specific circumstances. In contrast, selective policies
target benefits to individuals based on specific criteria, such as income The interaction between policy design and deservingness perceptions
level or employment status. significantly influences welfare policy outcomes:

Universal Policies: These are generally more popular because they are - Universal policies are often favoured for groups perceived as highly
seen as fairer and less stigmatising. They ensure that everyone within a deserving because they align with public sentiments of fairness and
certain category receives support, which can enhance social solidarity and solidarity.
reduce administrative costs associated with means-testing. - Selective policies might be applied to groups perceived as less
deserving to ensure that resources are not “wasted” on those who
Selective Policies: These aim to allocate resources more efficiently by could potentially support themselves.
targeting those deemed most in need. However, they can be seen as less
fair and more stigmatising, potentially leading to social division and Overall, understanding these factors is essential for analysing social policy
increased scrutiny of recipients. decisions and their implications on different societal groups. The balance
between universalism and selectivity, alongside societal perceptions of

28
deservingness, shapes the landscape of welfare provision across different
contexts.

29
 4. Identity: This involves the degree of similarity or closeness
people feel with the needy group. Groups that are perceived as similar or
familiar tend to be viewed as more deserving.

5. Need: This assesses the level of need experienced by

individuals or groups. Those with greater needs are generally viewed as
more deserving of support.

The CARIN model helps explain why certain groups, like the elderly and
disabled, are often perceived as more deserving of welfare benefits
compared to others, such as unemployed individuals or immigrants. This
model underscores the importance of societal perceptions in shaping
welfare policies and highlights how these perceptions can vary across
different contexts and cultures.

The CARIN model, developed by Wim van Oorschot, is a framework used

to understand public perceptions of deservingness in welfare systems. It
identifies five key criteria that influence how people perceive the
deservingness of different social groups. These criteria are:

1. Control: This criterion assesses whether individuals are

seen as responsible for their own neediness. Those perceived to have little
control over their situation, such as the elderly or disabled, are often
viewed as more deserving than those who might be seen as responsible
for their circumstances, like the unemployed.

2. Attitude: This refers to the perceived demeanor or behavior

of the needy group. Groups that are seen as compliant or grateful are often
considered more deserving.

3. Reciprocity: This criterion evaluates whether individuals

have contributed to society in the past or are likely to contribute in the
future. Those who have a history of contributing to society are often seen
as more deserving.

30
 interdependencies, leading to a more interconnected society where
collective welfare became necessary.

3. Rational Choice Theory: The development of welfare systems can also

be understood through the lens of rational choice theory, which suggests
that individuals acted out of “enlightened” self-interest. As societies
industrialised, both elites and workers recognised the mutual benefits of a
stable workforce and social peace, leading to support for collectivised
welfare systems.

4. Control and Deservingness in Social Policy: The notions of control and

deservingness became embedded in social policy design. These concepts
influenced who was considered eligible for welfare benefits and under what
conditions. Policies were crafted to reflect societal views on who was
deemed deserving or undeserving based on factors like perceived control
over one’s circumstances.

Overall, de Swaan’s work highlights the complex interplay of economic,

Abram de Swaan’s analysis of welfare ‘collectivisation’ in five countries
social, and political factors that facilitated the transition from individual to
provides a comprehensive understanding of how social security systems
collective welfare systems in Europe, emphasising the role of changing
evolved from individual to collective arrangements. This transformation was
societal interdependencies and rational self-interest in this process.
influenced by several factors:
How did we get from the old poor relief system to this new system of the
Welfare ‘Collectivization’
welfare state?
1. Historical Context: The shift towards collectivised welfare systems
Welfare “collectivisation”: refers to a concept in social policy where
occurred in the late 19th and early 20th centuries, driven by the need to
welfare provision is organised collectively, often through state mechanisms,
address the adversities faced by wage-earners who lacked private
rather than being left to individual efforts or private entities.
property. This shift was marked by the establishment of nationwide,
compulsory social security systems that provided income loss Enlightened self-interest: you do something for another group, like
compensation. relieving their poverty, even though in the short term it is not beneficial for
you (because you lose money), but in the long term, you see benefit from
2. Patterns of Interdependence (Figuration Sociology): De Swaan applies
it. Because you do not have to suffer from the negative externalities that
Norbert Elias’s concept of figuration sociology to describe how patterns of
are created by not contributing.
interdependence among individuals and groups changed over time. In pre-
industrial Europe, there was a stark divide between elites and the poor.
However, societal changes, such as industrialisation, transformed these
31
 Negative Externalities: Industrial capitalism brought about various negative
externalities, such as poor working conditions, urban poverty, and public
health issues. These externalities became more visible and pressing,
leading to increased public awareness.

Collective Action: The recognition of these issues motivated collective

action driven by ‘enlightened’ self-interest. Both elites and workers saw
benefits in improving living conditions to ensure social stability and
economic productivity.

Needs of the National Economy and Nation-State

National Economy: The development of a national economy required a

healthy, educated, and stable workforce. This need prompted investments
in social welfare systems to support workers and their families.

Nation-State: As nation-states consolidated power, they began to play a

Under industrial capitalism, the emergence of new social classes and the more active role in providing social welfare. This was part of a broader
transformation of societal structures led to significant changes in how social strategy to foster national unity and economic growth.
welfare was conceptualized and implemented. Here are the key elements
of this transformation: Figuration Sociology

New Social Classes and Elites Patterns of Interdependence: According to Norbert Elias’s figuration
sociology, societal changes transformed patterns of interdependence
New Elites: The industrial revolution gave rise to ‘new’ elites who among individuals and groups. This transformation facilitated the
accumulated wealth through industrial enterprises rather than traditional development of welfare systems as societies became more interconnected.
land ownership. This shift in the nature of private property altered the
dynamics of social power and influence. Rational Choice Theory

Old vs. New Elites: Conflicts emerged between the ‘old’ elites, who were Enlightened Self-Interest: Rational choice theory suggests that individuals
primarily landowners, and the ‘new’ industrial elites. These conflicts often act out of enlightened self-interest. In this context, both elites and workers
centered around the creation and control of collective welfare supported welfare policies that would lead to a more stable society,
arrangements, with each group having different interests and stakes in the benefiting all parties involved.
emerging national economy. Control and Deservingness in Social Policy
Increased Awareness of Negative Externalities Embedded Notions: Concepts of control over one’s circumstances and
perceptions of deservingness were embedded into social policies. These

32
notions influenced who received benefits and under what conditions,
reflecting broader societal values about responsibility and merit.

33
 Unions: They support social rights because these rights provide a safety
net for workers, reducing the pressure on unions to negotiate higher wages
that might not be sustainable in all economic conditions. Social rights also
promote solidarity among workers by ensuring that everyone has access to
basic welfare benefits.

Employers: Employers may prefer social rights over higher wages because
they help stabilise the workforce by reducing turnover and absenteeism.
Social welfare systems can mitigate the impact of economic downturns on
businesses by maintaining consumer demand through income support.

Governments: Governments favour social rights as they help maintain

social cohesion and political stability. By providing a baseline of security,
governments can prevent extreme poverty and reduce the likelihood of
The question of why social rights are preferred over simply paying higher social unrest. Moreover, social rights are often seen as a compromise
wages is complex and involves several economic, social, and political between labour and capital, balancing the needs of workers with the
considerations. (Logic: now we can’t control their attitude, at least we interests of employers.
control their money) Social Rights as a Compromise
Transfer Property vs. Private Savings Compromise Between Labor and Capital: Social rights represent a middle
Transfer Property/Transfer Capital: This term refers to the claims ground between the demands for higher wages by workers and the cost
individuals have on public welfare systems, such as pensions and constraints faced by employers. They allow for a redistribution of wealth
unemployment benefits, which are funded through collective contributions that supports those in need without placing an excessive burden on any
rather than individual savings. Unlike private savings, which require single party.
individuals to set aside money themselves, transfer property is Conservative and Controlling Nature: Social rights are designed to be
accumulated through mandatory contributions to social insurance conservative and controlling to prevent free-riding and abuse. Benefits are
schemes. often distributed in regular intervals (e.g., weekly or monthly) rather than in
Preference for Transfer Property: The accumulation of transfer property is lump sums, which helps manage public funds more effectively and ensures
often preferred over private savings because it provides a more reliable ongoing support for beneficiaries.
and equitable form of security against life’s uncertainties. It ensures that In summary, social rights are favoured over higher wages because they
individuals have access to resources in times of need, regardless of their provide a collective form of security that benefits all parties involved—
ability to save privately. workers gain stability, employers maintain a steady workforce, and
Interests of Unions, Employers, and Governments governments ensure social peace.

34
 industries. This step allowed for more efficient risk management and
resource allocation within specific sectors.

3. National Amalgamation:

The final step involved the amalgamation of sectoral unions and employers’
organisations at the national level. This integration was crucial in forming
the modern welfare state where the government played a central role in
managing social risks through national policies and programs.

4. Role of the State:

In this collectivisation process, the state emerged as a key actor that ‘owns’
transfer capital—the resources used for social welfare—and redistributes
them through social rights. The state coordinates between unions and
The process of collectivisation of social risks refers to the historical employers to ensure that social security systems are effective and
development of social security systems through the pooling and equitable. This evolution reflects a broader trend toward centralised
management of risks at progressively larger scales. This process unfolded management of social risks, aiming to provide a safety net for all citizens
in several stages from the late 19th century to the mid-20th century, as against life’s uncertainties.
societies sought to address the economic vulnerabilities faced by
individuals, particularly workers, due to industrialisation and urbanisation. Overall, this historical progression highlights how societies have moved
from localised, voluntary risk-sharing arrangements to comprehensive,
Steps of Collectivization (1880-1960) state-coordinated systems of social protection.
1. Risk Pooling Among ‘Likes’: Amalgamation: refers to the process by which two or more companies or
Initially, risk pooling occurred among individuals with similar interests and organisations combine to form a new entity.
circumstances. This was facilitated through friendly societies and mutual
associations for workers, and company funds for employers. These
organizations provided a basic form of social insurance by pooling
resources to support members during times of need, such as illness or
unemployment.

2. Sectoral Amalgamation:

As industries grew, there was a need for more comprehensive risk

management. This led to the amalgamation of mutual societies and
company funds at the sectoral level, such as in the steel or mining

35
 3-Inclusion of Low-Income and High-Risk Groups:

The collective approach aimed to include low-income and high-risk groups

by creating systems that could pool resources on a larger scale, thus
providing coverage to those previously excluded by smaller mutual
societies.

4-State Involvement and Resource Redistribution:

At the national level, the state plays a crucial role by accumulating transfer
capital from various programs and sectors across regions. This allows for
the redistribution of resources, which can be supplemented with general
taxes, effectively acting as a form of ‘reinsurance’ at a higher level.

5-Compulsory Participation to Prevent Free-Riding:

Making participation in these systems compulsory was essential to prevent

The process of amalgamation or collectivisation of social risks was driven ‘free-riding’—where individuals benefit from the system without contributing
by several factors that highlighted the limitations of low-level mutual to it—and to avoid false competition among different funds. This ensured
societies and company funds, leading to the need for broader, more that all individuals contributed fairly to the collective pool.
inclusive systems.
Competitiveness: everybody will pay.
Reasons for Amalgamation
6-Resistance and Centralization:
1-Exclusion of Unskilled Workers:
Although mutual funds and company funds initially resisted this shift
Initially, mutual societies and company funds primarily benefited skilled towards centralisation, over time they became increasingly controlled,
workers who had higher wages. This arrangement often excluded a large centralised, and subsidised by the state. This transition was necessary to
number of unskilled workers who were typically lower-income and faced create a more uniform and equitable system of social protection.
higher risks. As a result, these groups were not adequately covered by
Overall, these reasons highlight the necessity for larger-scale
existing systems, necessitating a broader approach to include them.
collectivisation efforts to create more inclusive and sustainable social
2-Interdependence and Clustering of Risks: security systems capable of addressing the diverse needs of all societal
members.
Risks in society are often interdependent and tend to cluster. This means
that the financial burden of addressing these risks can be overwhelming for
small-scale organisations. Larger-scale risk pooling is needed to effectively
manage and distribute these risks across a wider population.

36
 These characteristics are crucial for creating a welfare system that is
resilient and capable of supporting individuals through various life
challenges, including economic downturns. By ensuring that the system is
nation-wide, compulsory, and collective, it can provide a safety net that is
both comprehensive and equitable.

To establish a robust welfare system that effectively supports a wide range

of people under various circumstances, including economic crises, certain
key characteristics are essential:

Key Characteristics of a Robust Welfare System

1.Nation-wide Coverage:

A welfare system must operate at a national level to ensure uniformity and

inclusivity across different regions and sectors. This broad coverage allows
for the redistribution of resources from wealthier areas or sectors to those
in greater need, facilitating a more equitable system.

2.Compulsory Participation:

Making welfare participation compulsory ensures that it becomes both an

inalienable right and an unavoidable duty. This prevents issues such as
‘free-riding,’ where individuals might benefit from the system without
contributing to it. Compulsory systems also help in maintaining fairness and
sustainability by ensuring everyone contributes to the collective pool.

3.Collective Approach:

The collective nature of a welfare system involves pooling risks and

resources, which allows for better management and distribution of social
risks. This approach helps to include low-income and high-risk groups who
might otherwise be excluded from smaller or less comprehensive systems.
37
 Workers, Proletariat, and Unions:

Workers and their unions were at the forefront of pushing for

collectivisation as a means to secure better working conditions and social
security. They sought to redistribute wealth and power more equitably by
challenging the dominance of capital owners. Unions played a crucial role
in organising collective action and negotiating with employers and the
state.

Emerging State Bureaucracy:

The concept of the “four-sided configuration” in the struggle over the The state bureaucracy emerged as a central actor in managing the
collectivisation of property involves four key social groups: the petty collectivisation process. It facilitated the implementation of social security
bourgeoisie, owners of the means of production, workers (proletariat and systems and mediated between conflicting interests of labour and capital.
unions), and the emerging state bureaucracy. This configuration reflects the The state’s role was to ensure that welfare provisions were nation-wide,
dynamics and tensions among these groups as they navigate the compulsory, and collective, thereby institutionalising social security as a
collectivisation process, particularly in relation to labour and capital. public responsibility.
The Four-Sided Configuration (Swaan) Struggle Over Collectivization
Petty Bourgeoisie: The struggle over collectivisation was fundamentally about balancing these
This group includes small business owners, shopkeepers, and independent competing interests to create a system that could provide social security for
craftsmen. They often resisted collectivisation efforts because such all citizens. Each group had its own motivations:
changes threatened their autonomy and property rights. The petty - Workers sought protection against economic uncertainties through
bourgeoisie were sometimes caught between aligning with larger capital collective bargaining and state intervention.
interests or supporting workers’ movements, depending on how each - Capital Owners aimed to maintain control over their assets but
option affected their interests. (Now, this group has vanished.)
sometimes conceded to reforms that could prevent larger
Owners of Means of Production: company funds upheavals.
- Petty Bourgeoisie often resisted changes that threatened their
These are the large-scale industrialists and capitalists who own significant independence but had to adapt as larger economic forces
production resources. They generally opposed collectivisation since it could prevailed.
undermine their control over capital and profits. However, some large - State Bureaucracy worked to integrate these diverse interests into a
industrialists eventually accepted certain collectivisation measures when cohesive policy framework that would stabilise society by providing
they recognised potential benefits in stabilising labour relations and universal welfare benefits.
preventing social unrest.

38
Overall, this configuration highlights the complex interplay of social forces
in shaping modern welfare states through the collectivisation of risks and
resources.

39
 Each group aimed to maximise its control over the process while
minimising its costs. The “price” in this context refers to the financial or
resource cost associated with implementing or opposing collectivisation
measures. “Control” refers to the ability to influence or direct the outcomes
of these measures to align with a group’s interests. For instance,
employers might seek to minimise their financial contributions while
maintaining influence over how social policies are implemented.

Price as Cost for Control:

The changing balance of power in the four-sided configuration—comprising
The concept that “price is the cost for control” suggests that groups were
the petty bourgeoisie, owners of the means of production, workers
willing to bear certain costs if it meant gaining or retaining control over
(proletariat and unions), and the emerging state bureaucracy—reflects the
aspects of social insurance systems. This could involve financial
complex dynamics involved in the struggle for and against the
expenditures, political capital, or concessions in negotiations.
collectivisation of property. This struggle is influenced by coalitions and
oppositions among these groups, particularly in relation to the timing and Overall, this configuration highlights the intricate negotiations and power
nature of insurance against different types of social risks. struggles that shaped social welfare policies during periods of significant
economic and social change. Each group sought to balance their own
Key Dynamics in the Four-Sided Configuration
interests with broader societal needs, often requiring compromises
Coalitions and Opposition: facilitated by state intervention.
The timing and nature of social insurance were largely determined by the
alliances formed between different groups or opposition from them. For
example, workers and unions might align with state bureaucracies to push
for broader social insurance coverage, while owners of production might
resist such measures to maintain control over their capital.

Role of the State:

The state was an essential actor in this configuration, acting as a mediator

and implementer of social insurance schemes. It had to navigate between
various interests to establish systems that were nation-wide, compulsory,
and collective.

Maximising Control and Minimising Costs:

40
 Predicting Mortality and Fertility Rates: It was difficult to accurately predict
future mortality and fertility rates, which are crucial for determining the
sustainability and financial requirements of pension systems.

Inability of Unions and Employers: Neither unions nor employers alone

could effectively insure against the long-term risks associated with
providing lifetime guarantees like pensions.

Key Actors in Pension Development

1.Welfare Officials and Politicians: Politicians were motivated by the

electoral influence of the aging population, who represented a significant
voting bloc.

2. Employers: Employers supported pensions as a means to rejuvenate the

The development and implementation of pension systems as part of social workforce by encouraging older workers to retire, making room for younger
welfare policies address several critical social challenges and involve employees.
various stakeholders, each with different motivations and influences. 3. Unions: Unions viewed pensions as a form of deferred wages, securing
Social Problems Addressed by Pensions financial stability for workers after retirement.

1.Aging Population: Many poor individuals were elderly and no longer able Economic Implications
to work. This issue was exacerbated by increased life expectancy, which Pay-Roll Taxes: The state imposed payroll taxes on all insured parties,
extended the period during which individuals required financial support which increased wage costs for employers. However, this did not affect
after retirement. competition between employers since the system was obligatory and
2.Industrial Work Pace: The demanding nature of industrial work meant applied uniformly across the nation (and often internationally).
that older workers often could not keep up, necessitating a system to The implementation of pension systems required balancing these diverse
support them when they could no longer work. interests while ensuring that the system was sustainable and equitable.
3.Unraveling of Informal Welfare: Traditional informal support systems, The state played a crucial role in mediating these interests and establishing
such as family care, were breaking down due to urbanisation and changing a framework that could provide financial security for retirees while
social structures, increasing the need for formalised pension systems. maintaining economic stability.

Challenges in Implementing Pensions

41
 4.Wage Considerations: Unemployment benefits need to be carefully
calibrated so that they do not exceed wages, which could disincentivise
work. Ensuring that benefits provide adequate support without discouraging
job-seeking is a delicate balance.

Development of National Unemployment Insurance

5.Post-WWII Context: National unemployment insurance systems were

more commonly developed after World War II during periods of stable
economic growth and national consensus. This timing allowed for the
establishment of comprehensive systems with broad political support.

6.State’s Role and Economic Policy: As governments accumulated

significant transfer capital and gained experience in macroeconomic
management, such as through Keynesian public employment strategies,
Unemployment insurance is a complex social risk to insure due to several they had both the means and the incentive to implement national
inherent challenges, and its development reflects the interplay of various unemployment insurance systems.
social and economic factors.
7.Uniform Impact on Employers: Payroll taxes for unemployment insurance
Challenges in Insuring Unemployment increased wage costs for employers. However, because these taxes were
obligatory and applied uniformly across all employers, they did not affect
1.Risk Clustering: Unemployment risk tends to cluster during economic competition between them, creating a level playing field nationally and
downturns, making it difficult to predict and manage. This clustering often internationally.
increases the financial burden on unemployment insurance systems during
recessions when claims surge. Overall, the development of unemployment insurance reflects a complex
interplay of economic needs, political will, and social considerations, aiming
2.Control Difficulties: It is challenging to control for factors like to provide a safety net for workers while balancing incentives for
unwillingness to work or participation in informal work, which can employment.
complicate the administration of unemployment benefits. Ensuring that
recipients are genuinely seeking employment adds a layer of complexity.

3.Concerns Over Strike Funds: Employers and the state have historically
feared that unemployment funds could be used as strike funds, supporting
workers financially during labour disputes and potentially encouraging
strikes.

42
 3.Employers and State Regulation: The shift from company-level insurance
to nationwide compulsory insurance was challenging because it threatened
employers’ control over workforce management and factory discipline.
Employers were concerned about losing direct influence over their
employees due to state-imposed regulations.

4.Workers’ Support for Insurance Schemes: Within the working class, there
were divisions. Relatively privileged strata often supported voluntary
schemes and company plans but resisted more comprehensive and
compulsory forms of insurance. This resistance was due to concerns about
losing control over their benefits and contributions.

Role of Government Intervention

Government as a Mediator: Conflicts between and within workers and

Over time, the struggle over the collectivization of property and social risks employers necessitated government intervention. The state played a
led to significant transformations among all parties involved in the four- crucial role in resolving these conflicts by imposing regulations that forced
sided configuration: small entrepreneurs, owners of the means of both parties to adapt to higher levels of integration within the welfare
production, workers (proletariat and unions), and the state bureaucracy. system.
This transformation was driven by the evolving dynamics of social policy
Development into a Welfare State: Over time, the state evolved into a
and economic change.
welfare state, taking on a central role in managing social security systems.
Transformation of Parties This development was characterised by the state’s ability to impose
compulsory insurance schemes that were nation-wide, ensuring uniformity
1.Small Entrepreneurs: Small entrepreneurs did not necessarily change
and reducing competition-related disparities among employers.
their opinions on social policy but rather experienced a class
transformation. Many transitioned from being independent business owners This transformation highlights how economic pressures and social policy
to joining the ranks of wage earners, effectively becoming part of the changes led to a reconfiguration of class structures and power dynamics,
broader working class or proletariat. ultimately contributing to the establishment of modern welfare states.

2.Proletarization of Wage Earners: The process observed was not an

embourgeoisement (becoming middle-class) of the proletariat but rather a
proletarization of all wage earners. This means that over time, more people
came to rely on wages rather than owning means of production or small
businesses, aligning their interests more closely with those of traditional
workers.

43
 the 1930s-1940s to support families with children, reflecting a growing
recognition of the need to support broader segments of the population.

3.Post-World War II Universalism:

After World War II, there was a significant shift towards extending social
rights to the entire population, embodying the principle of ‘universalism.’
This period saw the development of national unemployment insurance and
social assistance programs. These programs often had roots in older poor-
relief systems but were reformed to be more inclusive and comprehensive.

Influencing Factors

Power Struggles and Interests: The development of welfare systems was

influenced by power struggles between different social groups, including
workers, employers, and the state. Each group had its interests and sought
The historical development of social welfare systems, as outlined by
to influence policy outcomes to align with those interests.
Kuhnle and Sander (2010), reflects a progression from targeted social
insurance programs for specific groups to more comprehensive, universal Notions of Deservingness: Public perceptions of who deserved welfare
systems. This evolution was shaped by various social, economic, and benefits played a crucial role in shaping policy. Groups perceived as more
political factors, including power struggles, perceived interests, and notions deserving, such as the elderly, sick, and disabled, often received more
of deservingness. generous and unconditional support compared to able-bodied unemployed
individuals.
Key Phases in Social Welfare Development
Economic and Political Context: Economic growth periods provided the
1.Early Social Insurance Programs (1880 Onwards):
resources needed to expand welfare systems. Political consensus was also
Initially, social insurance programs were primarily designed for wage- crucial in implementing comprehensive welfare policies.
workers, especially male breadwinners. These programs addressed risks
Overall, the historical development of welfare systems reflects a complex
related to industrial accidents, occupational hazards, invalidity, and old age.
interplay of economic needs, political dynamics, and societal values
The focus was on providing financial security to those most directly
regarding who deserves support and how it should be provided. This
affected by the industrial economy.
evolution has led to the establishment of modern welfare states that aim to
2.World War I and Interwar Period: provide a safety net for all citizens while balancing economic sustainability
and social justice.
The aftermath of World War I saw the introduction of compulsory primary
education and sickness insurance. Family allowances were introduced in

44
(what order do you choose if I ask you this on the exam?-in the beginning,
it is more what employers want. Then, the labourers get more and more
power. Afterwards, the balance of the power has changed. )

45
 Late Industrialization and Authoritarian State: Germany’s later
industrialisation occurred under an authoritarian state led by Bismarck. The
government took an active role in welfare provision to prevent worker
solidarity movements and maintain social order.

Lutheran Influence: Similar to the UK, Lutheranism also distinguished

between deserving and undeserving poor but allowed for a more central
role for the state in welfare provision.

State-Led Welfare Development: The German state collaborated with both

old landowners and new industrial employers to create early welfare
programs. This cooperation was aimed at preserving existing social
hierarchies while building national loyalty.

Netherlands

Late Industrialization and Denominational Cleavages: The Netherlands

United Kingdom
experienced late industrialisation and was characterised by denominational
Early Industrialization and Liberalism: The UK experienced early cleavages and pillarisation (a form of corporatism). This complex social
industrialisation, which, combined with its liberal political tradition, structure initially delayed welfare development due to struggles over control
emphasised individual responsibility and minimal state intervention. This among various corporatist groups.
led to a welfare system that initially relied heavily on poor relief, charities,
Complex Consultation System: A complex system of consultation between
and mutual societies.
these groups eventually facilitated a rapid expansion of the welfare state
Reformed Protestantism: Influenced by Protestant values, there was a once industrialisation accelerated and pillarisation began to decline.
strong distinction between the “deserving” and “undeserving” poor. This
From Brake to Driver: Initially, the complex social structure acted as a
was institutionalised through the workhouse system under the principle of
brake on welfare development. However, it later became a driver for rapid
“less eligibility,” where conditions for receiving aid were intentionally harsh
expansion as consensus was reached among different societal pillars.
to deter reliance on public assistance.
These examples demonstrate how historical timing, religious influences,
Survival of Poor Relief Systems: Due to these factors, traditional forms of
political structures, and social dynamics have shaped distinct paths in
poor relief and mutual aid persisted longer in the UK compared to other
welfare state development across countries. Each nation’s unique coalition
countries.
of interests determined the nature and pace of its social policy evolution.
Germany

46
 extent of welfare provisions. These power dynamics influence how
resources are distributed and who benefits from social policies.

Historical Context and Differences in Welfare States

Coalitions and Power Balancing:

The specific historical balancing of power and interests through coalitions

between employers, unions, and the state is central to understanding the
differences between welfare states today. These coalitions have shaped
the types of welfare systems that have emerged in different countries.

Qualitative-Historical Analysis:

To fully understand the development of welfare states, it is essential to use

The emergence and development of welfare states can be explained qualitative-historical sociological analyses rather than purely quantitative
through a sociological framework that considers various drivers and approaches. This type of analysis considers the unique historical contexts
historical contexts. This framework highlights the interplay of social rights, and power struggles that have influenced welfare policy decisions.
self-interest, and power relations in shaping welfare systems.
Conclusion
Drivers of Welfare State Development
The development of welfare states reflects complex interactions between
1.Social Rights as a Control Strategy: social rights, self-interest, and power relations. Understanding these
dynamics requires an examination of historical contexts and the specific
Social rights have been used as a strategy to manage and control societal coalitions that have shaped different welfare systems. This approach helps
issues, such as poverty and unemployment. By institutionalising these explain why welfare states vary significantly across countries, as each has
rights, states can stabilise society and reduce social tensions. been influenced by its unique set of social, economic, and political
2.(Enlightened) Self-Interest: conditions.

The development of welfare systems is often driven by the self-interest of

different social groups. For example, employers may support welfare
policies to ensure a stable workforce, while workers advocate for social
protections to secure their livelihoods.

3.Power Relations:

The balance of power between different social groups—such as employers,

unions, and the state—plays a crucial role in determining the nature and

47
 healthcare tend to receive more public support than unemployment
benefits.

Relevance Today

1.New Figurations in Research and Policy:

Understanding these distinctions is crucial for identifying new welfare state

models, such as the Asian-Productivist welfare state. It also applies to
emerging or developing countries and local governance levels, such as
municipalities in the Netherlands, where policies may need to address
climate change or other collective challenges.

2.Welfare State Reform:

Welfare states often expand during periods of economic growth but are the
first to face cuts during austerity measures. Typically, protections for
The historical development and current distinctions in welfare systems working-age populations are rolled out last and retrenched first. This
reflect deep-seated notions of deservingness, power dynamics, and pattern reflects ongoing debates about who deserves social protection and
evolving social policies. under what conditions.
Distinctions in Deservingness Conclusion
1.Historical Context: The distinctions between deserving and undeserving poor remain a
fundamental aspect of welfare policy development. These distinctions
The distinction between the ‘deserving’ and ‘undeserving’ poor has long
influence both historical and contemporary social insurance programs,
influenced social policy. Historically, groups like the elderly, sick, and
shaping how different groups are supported. Understanding these
disabled have been viewed as more deserving of support compared to
dynamics is essential for addressing current challenges in welfare state
able-bodied unemployed individuals. This perception has shaped the
reform and adapting policies to meet new societal needs.
development of social insurance programs, which often prioritize these
groups.

2.Modern-Day Social Protection:

These historical distinctions continue to influence modern welfare systems.

Social protection levels and modalities vary significantly for different
groups, with more generous and less conditional support typically provided
to those deemed more deserving. For example, old-age pensions and

48
 as being withheld during labour disputes or used to manipulate workforce
behaviour and discipline.

3.Desire for Autonomy:

Workers preferred systems where they had a degree of autonomy and

could ensure that their interests were adequately represented. This desire
for control was part of a broader movement towards more democratic and
equitable workplace relations.

Historical Context

Transition to State-Controlled Systems:

Over time, the shift from company-controlled funds to state-managed social

insurance systems reflected a broader trend toward collectivisation and
democratisation of social welfare. State involvement was seen as a way to
ensure fairness, transparency, and uniformity in the provision of social
benefits, addressing the concerns of workers about control and equity.
The statement “Company funds became greatly resented by the workers
unless they came under their control” highlights a significant tension in the Role of Unions:
historical development of social insurance systems. This resentment
Unions played a crucial role in advocating for worker control over social
stemmed from several key factors:
insurance mechanisms. They pushed for systems that would not only
Reasons for Worker Resentment protect workers but also empower them by giving them a voice in the
management and distribution of benefits.
1.Lack of Control:
In summary, the resentment towards company funds among workers was
Workers often resented company-controlled funds because they had little
primarily due to issues of control and trust. The evolution towards state-
to no say in how these funds were managed. Without worker
controlled social insurance systems can be seen as a response to these
representation or influence, these funds could be perceived as tools for
concerns, aiming to provide a more equitable and transparent framework
employers to exert control over workers, rather than genuine safety nets for
for social protection.
employee welfare.

2.Distrust of Management:

There was a general distrust among workers towards management-run

funds. Workers feared that these funds could be used against them, such

49
 individuals can maintain a livelihood without reliance on the market) and
social stratification varies across regimes. For example, social-democratic
regimes emphasise universal benefits and high levels of
decommodification, while liberal regimes focus on market solutions with
minimal state intervention.

3.Analytical Tools: Esping-Andersen uses decommodification and

stratification as key analytical tools to compare welfare states. These
dimensions help in understanding how different welfare regimes impact
social equality and economic security.

Differential Expansion and Outcomes

The expansion of welfare states is driven by political coalitions and

Politics, Power, and Class in Welfare States (Esping-Andersen)
institutional legacies. Esping-Andersen argues that welfare state outcomes
This analysis explores why welfare states differ in their policies, what drives are influenced by the interplay between politics and institutional structures,
their expansion, and the outcomes of these differences. Additionally, it which can lead to varied levels of social protection and equality.
considers whether the salience of class will diminish with the extension of
- Liberal Regimes: Characterized by minimal state intervention and
social rights.
means-tested benefits, leading to higher inequality.
Why Do Welfare States Differ? Welfare states differ primarily due to - Conservative Regimes: Focus on preserving traditional family
historical and political factors. Esping-Andersen identifies three main types structures with moderate decommodification.
of welfare state regimes: liberal, conservative, and social-democratic. - Social-Democratic Regimes: Aim for high decommodification with
These regimes are shaped by distinct historical forces and political class universal benefits, promoting greater equality.
coalitions that influence their development trajectories.
Will Class Salience Disappear?
1.Class-Coalition Thesis: This thesis suggests that the nature of class
The extension of social rights could potentially reduce the salience of class
mobilisation, particularly the working class, plays a critical role in shaping
by providing more equitable access to welfare benefits. However, Esping-
welfare policies. The strength and type of political alliances formed
Andersen notes that welfare states themselves can reinforce class
between classes can lead to different welfare state models.
divisions through their stratification systems. The persistence of class-
2.Welfare State as a System of Stratification: (Stratification: hierarchical based inequalities within different welfare regimes suggests that while
arrangement of individuals or groups within a society based on various social rights may mitigate some disparities, they are unlikely to eliminate
factors such as wealth, income, social status, occupation, and power) class distinctions entirely. In conclusion, politics and class dynamics are
Welfare states do not just provide social benefits but also reinforce social central to understanding the variations in welfare state policies and their
stratification. The degree of decommodification (the extent to which expansion. The interplay between historical legacies, political coalitions,

50
and institutional frameworks shapes the distinct paths that welfare states
follow, influencing their capacity to address social inequalities.

51
 3.Industrial Capitalism’s Role: The advancement of industrial capitalism
was seen as a driver for increased social spending, which in turn was
expected to promote equality. However, this raised questions about the
mechanisms through which industrial capitalism influenced welfare state
expansion and its impact on social equality.

Analytical Approaches

Class-Coalition Thesis: Esping-Andersen emphasised the importance of

class coalitions in shaping welfare states. The nature of political alliances
between different classes significantly influenced the development and
structure of welfare policies.

Welfare State as a System of Stratification: Welfare states were analysed

not only as providers of social benefits but also as systems that perpetuate
social stratification. The degree of decommodification (the reduction of
In 1989 and 1990, researchers like de Swaan and Esping-Andersen individuals’ reliance on the market for survival) varied across different
identified a significant gap in the study of welfare states. This period regimes, affecting social equality.
followed decades of substantial growth in social spending across affluent
democracies, with welfare state expenditures rising from 7.5% of GDP in Analytical Tools: Esping-Andersen introduced key analytical tools like
1960 to 14% by 1980, with notable differences such as Sweden at 17% decommodification and stratification to compare welfare states, providing a
and the US at 10%. framework to understand how different regimes impact social security and
equality.
Key Issues and Questions
Consequences and Further Questions
1.Explaining Expansion and Differences: The challenge was to understand
why welfare states expanded differently and what drove these variations. The expansion of welfare states during this period led to several important
The focus was on identifying the factors that led to such differential growth questions:
in social spending and understanding the consequences of these
- How do different welfare state models impact economic security
differences.
and social equality?
2.Leaders vs. Laggards: During the 1970s and 1980s, countries were often - What are the long-term implications of varying levels of social
categorised as either leaders or laggards in terms of welfare state spending on national economies?
development. This classification highlighted disparities in how nations - Will extending social rights diminish the relevance of class
adopted social policies and expanded their welfare systems. distinctions?

52
These questions continue to guide research in comparative social policy,
highlighting the complex interplay between politics, economics, and social
structures in shaping welfare outcomes.

53
 Esping-Andersen’s Welfare Regimes

Gøsta Esping-Andersen categorises welfare states into three regimes:

liberal, conservative, and social democratic. The data can be interpreted
within this framework:

•Liberal Regimes (e.g., United States, Canada, Australia): Typically

characterised by lower social expenditures. The United States, for instance,
shows an increase from 13.2% to 19.1%, which is still relatively low
compared to other regimes.

•Conservative Regimes (e.g., Germany, France, Italy): These often have

higher social expenditures due to their focus on preserving status
differentials. France’s expenditure increased significantly from 20.2% to
31.7%.

•Social Democratic Regimes (e.g., Sweden, Denmark, Finland): Known for

high levels of social spending aimed at promoting equality. Denmark and
Finland show substantial increases, with Finland reaching 29.5% and
Denmark 31.5%.

Key Observations

•Overall Increase: Most countries have increased their social expenditure

as a percentage of GDP from the early 1980s to the early 2010s.

De Swaan’s Perspective •Variation Across Countries: There is significant variation among countries,
reflecting different welfare state models and priorities.
Abram de Swaan’s analysis focuses on the development of welfare states
as part of a broader process of socialization and collective responsibility. This data highlights the dynamic nature of welfare policies and their
The increase in social expenditure over time, as shown in the table, reflects adaptation to economic and social changes over time.
how many countries have expanded their welfare systems to address
social risks and inequalities. This aligns with de Swaan’s view that welfare
states evolve to manage interdependencies in modern societies.

54
Association with income inequality & poverty: how to explain F Value: The F statistic is 2.231, with a significance level (Sig.) of 0.152.
variation and clusters? Since this value is greater than 0.05, the model is not statistically
significant, meaning spending does not significantly predict income
inequality.

Parameter Estimates:

The constant is 36.653, which represents the expected Gini coefficient

when spending is zero. The coefficient b1 is -0.326, suggesting a negative
relationship; as spending increases by one unit, the Gini coefficient
decreases by 0.326 units.

Scatter Plot Analysis

Trend Line: The plot shows a negative trend line, indicating that higher
spending might be associated with lower income inequality, although this
relationship is weak.

Clusters and Outliers:

- Countries like the US, UK, and Canada are outliers with higher Gini
values despite varied levels of spending.
- Nordic countries such as Norway, Finland, and Sweden show lower
Gini values with higher spending.

Variation and Clusters

High Spending, Low GINI: Nordic countries tend to cluster in this category,
suggesting effective social policies that reduce inequality.

Low Spending, High GINI: Countries like the US and UK fall into this
The table and graph provide insights into the relationship between category, indicating less effective measures in reducing inequality through
government spending in 2015 (Spending2015) and income inequality, spending.
measured by the Gini coefficient in 2015 (GINI2015). These observations suggest that while there might be a general trend
R Square: The R Square value is 0.105, indicating that approximately where increased social spending correlates with reduced income inequality,
10.5% of the variation in the Gini coefficient can be explained by spending the relationship is not strong or statistically significant across all countries.
in 2015. This suggests a weak relationship.

55
Different policy approaches and economic contexts likely contribute to
these variations.

56
Association with income inequality & poverty: how to explain Significance: The significance level is 0.075, which is above the
variation and clusters? conventional threshold of 0.05. This implies that the relationship is not
statistically significant at the 5% level, though it is close to being significant.

Parameter Estimates: The constant (25.634) and the slope coefficient (-

0.355) suggest that as spending increases, poverty tends to decrease
slightly, but not strongly enough to be statistically significant.

Graph Analysis

Overall Trend: The scatter plot shows a negative linear trend, suggesting
that higher spending is generally associated with lower poverty levels.

Clusters:

- Countries like the US, ES (Spain), AU (Australia), and GR (Greece)

exhibit higher poverty levels despite their spending, indicating
potential inefficiencies or other socio-economic factors affecting
poverty.
- In contrast, countries such as NL (Netherlands), NO (Norway), SE
(Sweden), and DK (Denmark) show lower poverty levels with higher
spending, suggesting more effective social policies.

Outliers: Countries like ES and IT (Italy) are above the regression line,
indicating higher poverty rates than expected based on their spending
levels.
The table and graph together provide insights into the relationship between From a social policy perspective, this analysis highlights the variability in
government spending and poverty levels across different countries, viewed how effectively different countries convert spending into poverty reduction.
from a comparative social policy perspective. Countries with low poverty despite high spending might have more efficient
welfare systems or other supportive socio-economic structures.
Table Analysis
Conversely, those with high poverty despite spending might face
R-Squared Value: The R-squared value of 0.157 indicates that only 15.7% challenges such as income inequality or ineffective policy implementation.
of the variance in poverty levels can be explained by spending in 2015.
This suggests that while increased spending can be associated with
This suggests a weak linear relationship.
reduced poverty, the effectiveness of this spending is crucial and may
depend on how well social policies are designed and implemented.

57
 suggests moderate inequality, while the poverty rate stands at 11.1%.
Historically, these systems have evolved in societies with a strong
emphasis on individual responsibility and minimal state intervention in the
economy.

Conservative-Corporatist Welfare States

Conservative-corporatist regimes, prevalent in countries like Germany and

France, exhibit higher social expenditure on income transfers (23% of
GDP) and moderate spending on social services (5% of GDP). These
systems are influenced by traditional family values and often rely on family-
based assistance mechanisms. The decommodification index is higher at
33, reflecting a greater degree of protection from market forces compared
X. Essay-question: Discuss the table provided above, in the form of a to liberal regimes. With a Gini index of 0.28 and a poverty rate of 10.8%,
small essay in which you mainly draw on the work of Esping-Andersen these states maintain moderate inequality levels. Politically, they have been
(1990) – The Three Worlds of Welfare Capitalism. Explain the basic shaped by historical corporatist arrangements that balance the interests of
patterns that are reflected in this table, and how these patterns relate to labour, capital, and the state.
‘history’ and ‘politics’. (20 points)
Social-Democratic Welfare States
The table provided reflects the key concepts from Gøsta Esping-
Andersen’s influential work, The Three Worlds of Welfare Capitalism Social-democratic regimes, found in Scandinavian countries like Sweden
(1990). This seminal book categorises welfare states into three distinct and Denmark, prioritise universal welfare provision with significant social
types: Liberal, Conservative-corporatist, and Social-democratic. Each type expenditure on both income transfers (19.8% of GDP) and social services
is characterised by different levels of social expenditure, (8.8% of GDP). These systems aim for high levels of decommodification
decommodification, stratification, and poverty rates, reflecting their unique (38.5), ensuring that citizens can maintain a livelihood independent of
historical and political contexts. market forces. The Gini index is the lowest at 0.21, indicating greater
income equality and the poverty rate is also low at 6.4%. Historically, these
Liberal Welfare States welfare states have developed through strong labour movements and
Liberal welfare states, such as those found in the United States and the political coalitions that emphasise equality and comprehensive social
United Kingdom, are characterised by modest social expenditure focused rights.
on income transfers (13.8% of GDP) and limited spending on social Historical and Political Context
services (5.3% of GDP). These states emphasise means-tested assistance
and encourage market solutions to social problems. The Esping-Andersen’s typology highlights how historical developments and
decommodification index is relatively low at 26.7, indicating that individuals political struggles have shaped different welfare state models. Liberal
are more reliant on the market for their welfare. The Gini index of 0.29 regimes emerged in contexts where market liberalism prevailed,
emphasising individualism and limited government intervention.
58
Conservative-corporatist models developed in societies valuing tradition
and family structures, often influenced by religious institutions. Social-
democratic systems arose from strong labour movements advocating for
universal welfare rights and equality.

These patterns are not only reflections of economic strategies but also
outcomes of political ideologies and power dynamics within each society.
Esping-Andersen’s work underscores that understanding welfare capitalism
requires examining the interplay between state institutions, market forces,
and historical trajectories that define each regime type’s unique approach
to social welfare.

In conclusion, the table encapsulates the diverse approaches to welfare

across different capitalist democracies as theorised by Esping-Andersen. It
illustrates how historical legacies and political choices continue to shape
welfare state structures and their impact on inequality and poverty.

De-kommodifikasyon, sosyal politikada bireylerin temel ihtiyaçlarını

karşılamak için piyasaya olan bağımlılıklarının azaltılması anlamına gelir.
Bu kavram, sosyal hakların güçlendirilmesi ve bireylerin piyasa
dinamiklerinden bağımsız olarak yaşam standartlarını sürdürebilmeleri
üzerine odaklanır. Sosyal devletin sağladığı işsizlik sigortası, sağlık
hizmetleri ve emeklilik gibi sosyal yardımlar, bireylerin ekonomik güvenliğini
artırarak piyasa bağımlılığını azaltır. Bu tür politikalar, bireylerin daha fazla
ekonomik özgürlüğe sahip olmalarını ve sosyal eşitliği teşvik eder.

59
 - Social Expenditure: Measures the financial effort made by states to
provide welfare, often expressed as a percentage of GDP.
- Social Rights: Evaluates the generosity and accessibility of welfare
benefits, including entitlement conditions, replacement rates, and
benefit duration.
- Benefit Recipiency Data: Focuses on actual benefit receipt by
individuals, providing insights into how social rights translate into
real-world access to welfare.

3.Comparative Analysis: By comparing these indicators across countries,

researchers can identify differences in welfare state models and their
impacts on social equality and economic security. This approach helps in
understanding how different welfare regimes address social needs and
redistribute resources.

Figure illustrates various indicators used to measure the extent of welfare

state provision. These indicators help in analysing cross-national
differences in welfare provision and understanding how changes in policy
affect actual benefit receipt.

- Expenditure vs. Rights vs. Receipt: The figure would typically

The Social Citizenship Indicator Program (SCIP) is a comparative research compare these dimensions to show how they align or diverge
initiative focused on evaluating the quantity and quality of social rights and across different countries. For example, a country might have high
the political factors that shape welfare programs. This program, involving social expenditure but low actual benefit receipt due to restrictive
scholars like Korpi, Palme, and Esping-Andersen, aims to provide a deeper eligibility criteria.
understanding of welfare state dynamics beyond mere expenditure levels. - Implications for Policy: Understanding these dynamics can inform
policy decisions by highlighting areas where welfare states may
1.Expenditures as Epiphenomenal: The statement that “expenditures are need reform to improve access or efficiency without necessarily
epiphenomenal to the theoretical substance of the welfare state” suggests increasing expenditure.
that the amount of money spent on welfare programs is not the primary
indicator of their effectiveness or purpose. Instead, the focus should be on Overall, the SCIP emphasises that analysing the theoretical underpinnings
the structure and outcomes of these programs, such as decommodification and practical implementations of welfare policies provides a more
and social stratification. comprehensive view than focusing solely on expenditure levels. This
approach allows for a nuanced understanding of how welfare states
2.Indicators of Welfare Provision: The SCIP uses various indicators to function and their effects on society.
assess welfare state provision:
60
 3.Workers and Left Power Resources: Workers engage in collective action
to influence distributive processes in the market through social rights. This
mobilisation is often facilitated by labour unions and political parties that
represent workers’ interests.

Impact of Social Rights

Balance of Power: The introduction of social rights fundamentally alters the

balance of power between workers and employers. When workers have
access to social rights, their dependence on the market and employers
decreases, giving them more leverage in economic and political
negotiations.

Social Policy as a Trojan Horse: Social policy is described metaphorically

as a “Trojan horse” that introduces elements into the capitalist political
economy that can challenge its foundational structures. By providing a
“social wage,” welfare policies reduce workers’ reliance on market wages,
thus altering traditional capitalist dynamics.

Mobilisation in Labor Unions and Social-Democratic Parties: The

mobilisation efforts are often channelled through labour unions and social-
(Class mobilisation thesis Esping Anderson) democratic parties, which play crucial roles in advocating for and
The Social Citizenship Indicator Program (SCIP) uses the theoretical implementing welfare policies that enhance social rights.
framework that emphasises working class mobilisation as a key driver of This theoretical framework highlights how class mobilisation and political
welfare state expansion. This perspective is rooted in the analysis of how action are central to understanding the development and expansion of
class dynamics and political struggles shape welfare policies. welfare states. It underscores the transformative potential of social rights in
1.Employers/Capital and Economic Accumulation: Employers and altering economic dependencies and promoting greater equality within
capitalists focus on accumulating economic resources, which often leads to capitalist societies.
tensions with workers who seek better social protections and rights. Teacher: The welfare state increases political capacities and diminishes
2.Democratic Class Struggle: The expansion of welfare states is seen as a social divisions that are barriers to political unity among workers. When
result of democratic class struggles where workers mobilise to achieve workers are completely market-dependent, they are difficult to mobilise for
greater social rights. This struggle often involves labour unions and social- collective action. De-commodification strengthens the worker.
democratic parties that advocate for policies benefiting the working class.

61
 workers may have diverse political affiliations and interests, which can
influence their support for different types of welfare policies.

3.Electoral Dynamics: Historically, “blue-collar” workers have never

constituted an electoral majority and have become a smaller class over
time. This demographic shift implies that relying solely on working-class
mobilisation is insufficient for understanding welfare state development.

Importance of Political Coalition-Building

Esping-Andersen argues that a broader theory of class mobilisation must

consider the role of political coalitions beyond major leftist parties. The
construction and expansion of welfare states have often depended on
coalition-building across different political and social groups.

- Class Coalitions: The structure and dynamics of class coalitions are

more decisive in shaping welfare states than the power resources
of any single class. Successful welfare policies often result from
alliances between various social classes and political entities,
including centrist and conservative groups.
Critique of the ‘Linear’ View on Left Power Resources - Historical Context: The historical context in which these coalitions
Esping-Andersen’s analysis of welfare state development includes a form is crucial. Different countries have unique political histories and
critique of the “linear” view that attributes welfare state expansion primarily institutional legacies that influence how these coalitions are built
to the mobilisation of left power resources, such as those from social- and maintained.
democratic parties and labour unions. This perspective is seen as In summary, Esping-Andersen’s critique highlights the complexity of welfare
problematic for several reasons: state development and underscores the importance of looking beyond
Limitations of the Linear Perspective simplistic models that focus solely on left power resources. Instead,
understanding the intricate interplay between different political forces and
1.Minor Role of Social-Democratic Parties: In some countries, social- class coalitions provides a more comprehensive view of how welfare states
democratic parties played only a minor role in the establishment of social evolve.
rights, which in some cases occurred even before the advent of full
democracy. This challenges the notion that leftist political movements are
the sole drivers of welfare state expansion.

2.Not All Workers Support Socialist Parties: The assumption that all
workers align with socialist or social-democratic parties is flawed. In reality,
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 3.Esping-Andersen’s Perspective

Coalitions and Social Relations: Esping-Andersen argues that welfare state

expansion cannot be attributed solely to working-class mobilisation.
Instead, it involves broader coalitions that include not only workers but also
rural farmers, middle-class wage earners, white-collar employees, and
public sector workers.

Political Coalition-Building: He highlights the importance of coalition-

building across different social classes and political entities. This approach
recognises that welfare state development often depends on alliances that
transcend traditional class boundaries.

Critique of the Linear View on Left Power Resources

1. De Swaan’s Perspective Esping-Andersen critiques the linear view that sees left power resources as
Silent Extension of Social Rights: De Swaan emphasises a more gradual the primary driver of welfare state expansion:
and less overt process where social rights extend from skilled workers to Role of Social-Democratic Parties: In several countries, social-democratic
unskilled workers and eventually to all wage earners. This process is often parties played only a minor role in early social rights developments, which
led by activist regimes and is driven by employers and the state rather than sometimes occurred even before democratic systems were fully
by direct class struggle. established.
Employer/State-Driven: The expansion of welfare provisions is seen as Diverse Worker Affiliations: Not all workers align with socialist parties, and
being influenced significantly by employers and state interests, which aim “blue-collar” workers have historically never constituted an electoral
to stabilise labour markets and ensure social peace by extending benefits majority. Over time, this group has become a smaller segment of the
progressively. population.
2. Class Mobilization Thesis Importance of Class Coalitions: Esping-Andersen emphasises that
Left Power Resources: This thesis focuses on the strength of the working successful welfare state construction relies more on the structure of class
class and its ability to mobilise through political parties and unions. The coalitions than on the power resources of any single class. Political
idea is that welfare state expansion results from the organised efforts of the coalition-building is crucial for achieving sustainable welfare policies.
working class to secure social rights and benefits. In summary, these different conceptualisations highlight the complexity of
Democratic Class Struggle: Emphasizes the role of political struggle in class dynamics in driving welfare state expansion, emphasising both direct
achieving welfare state policies, where organised labour plays a crucial role class mobilisation and broader coalition-building processes.
in pushing for social reforms.

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 (liberalism), universalism, benefit equality, private welfare provision) This
dimension examines how social policies influence social inequalities.
Different welfare models promote varying patterns of stratification, which
can either unite or divide workers. For instance, conservative regimes often
reinforce existing class structures through occupationally-based benefits.

3.Welfare Provision by States, Markets, and Families: Variations in these

dimensions highlight the relative importance of state, market, and family in
welfare provision, leading to Esping-Andersen’s “Worlds of Welfare
Capitalism” typology.

Types of Welfare States (Esping-Andersen’s typology)

Liberal Welfare States: Characterized by low decommodification and a

reliance on market solutions. Social benefits are means-tested and modest,
promoting individual self-reliance.

Conservative-Corporatist Welfare States: These regimes feature moderate

decommodification with benefits linked to occupational status. They
emphasise traditional family roles and often restrict female labour market
participation.
During the early stages of industrialisation, ruling elites sought strategies to
Social-Democratic Welfare States: High decommodification is a hallmark,
address the “Social Question,” which involved managing the
with universal benefits aimed at maximising individual independence and
commodification of labour. This period saw divergent strategies that
reducing inequality. These regimes encourage broad participation in the
eventually led to different welfare state models.
labour market, including women.
Analytical Tools and Dimensions (Esping-Andersen)
Role of Class Coalitions: The formation of these welfare state types is
1.Decommodification: (eligibility rules and restrictions on entitlement, level deeply rooted in historical class coalitions:
of income replacement, range of entitlements) This refers to the extent to
- Liberal Regimes: Often emerge in contexts where middle-class
which individuals can maintain a livelihood independent of market forces,
interests align with market-oriented policies.
often through social rights. High decommodification levels are typically
- Conservative Regimes: Typically result from alliances between
associated with social-democratic regimes, where social rights are
traditional elites and organised labour within a corporatist
extensive and universal.
framework.
2.Stratification: (segmentation of occupational and status-based programs
(corporatism), etatism (privileges for civil servants), means-testing
64
 - Social-Democratic Regimes: Develop through coalitions between
workers, rural farmers, and middle-class wage earners, often under
the leadership of social-democratic parties.

65
 2.Critique of Social Rights: From a liberal standpoint, extensive social
rights can lead to moral corruption and perpetuate issues like poverty and
unemployment. The argument is that generous welfare benefits can
disincentivise work and create dependency on state support.

3.Reality of Mass Poverty: Despite the theoretical benefits of market-

driven equality, the practical outcome often results in significant levels of
poverty. This discrepancy between theory and practice highlights the
limitations of relying solely on market mechanisms.

4.Minimalistic Social Policy: To address instances of extreme need

without undermining market incentives, liberals advocate for minimalistic
social policies. These policies typically involve:

- Means-Testing: Ensuring that only those who truly need assistance

receive it.
- Less Eligibility: Setting benefit levels below what could be earned
through employment to encourage work.
- Deserving vs. Undeserving Poor: Distinguishing between those
deemed worthy of assistance and those who are not.
(Liberalism’s accommodation of social protection is in practice much more - Insurance-Based Protection: Favouring private solutions like
elastic than normally thought => strenghtens the commodity status of occupational pensions and private health insurance over state-
labour.) 3 Layers- social assistance- moderate earning related social provided benefits.
insurance – private insurance (Beveridge)
5.Stratification and Inequality: The liberal welfare state tends to
The liberal perspective on welfare state development emphasises the role reproduce existing market inequalities by promoting a mix of welfare
of the market as the primary mechanism for achieving equality and provisions that vary by class. This approach often results in a dual system
prosperity. This view is rooted in the belief that the “invisible hand” of the where low-income individuals rely on state support while higher-income
market can effectively address social inequalities and promote economic groups benefit from private insurance schemes.In summary, the liberal
growth. However, this idealised view contrasts sharply with the practical response to welfare state development focuses on strengthening the
realities observed in many societies. commodity status of labour through minimalistic social policies that aim to
correct only the most severe cases of need while maintaining market
1.Market as a Path to Equality: Liberals argue that a free market system
incentives. This approach reflects a fundamental belief in the efficiency of
can abolish “old” inequalities by allowing individuals to compete and
markets but also reveals challenges in addressing broader social
succeed based on merit. The market is seen as a neutral arena where
inequalities effectively.
everyone has the opportunity to prosper.

66
 issues before they escalate, preserving status differentials between groups
such as civil servants, military personnel, industrial workers, and
employees.

3.Avoidance of Working-Class Mobilization: To prevent working-class

mobilization, these regimes often organize systems of consultation
between workers, employers, and the state within specific sectors or
occupations. This corporatist arrangement seeks to integrate workers into
the system while maintaining control over labour relations.

4.Support from Catholic Church and Subsidiarity Principle: The

conservative-corporatist model often receives support from the Catholic
Church, which emphasizes the primacy of the family, the male breadwinner
model, moral worth, and discipline. The principle of subsidiarity suggests
that the state should only intervene when smaller social units (like families)
cannot fulfil their roles.

5.Stratification through Status-Differentiated Social Insurance: This

welfare model uses status-differentiated social insurance systems to
The conservative-corporatist response to welfare state development is recreate and reinforce relative status differences among social groups.
characterised by a focus on maintaining traditional social structures and Benefits are often linked to occupational status, which perpetuates existing
status relations. This approach reflects a desire to preserve existing power inequalities rather than reducing them.
dynamics and social hierarchies, which are seen as being threatened by
Variations in Implementation
the commodification of labour and the potential for increased social
mobility. (Bismark) - Patronage and Clientelism: In some contexts, welfare provisions may be
influenced by patronage systems or clientelism, where benefits are
1.Conservation of Traditional Status Relations: The ideal situation for
distributed based on loyalty or political support rather than need.
conservative-corporatist regimes is the maintenance of pre-industrial status
relations between social groups. Commodification is viewed as morally - Regional Differences: In Continental Europe, late industrialization allowed
corrupting and disruptive to the established balance of power and for the survival of traditional guild traditions that influence welfare policies.
privileges, leading to a fear of social mobility that could undermine these In Japan, similar corporatist elements can be observed in how welfare
traditional structures. benefits are structured around occupational categories.

2.Early and Strong State Intervention: To manage worker demands and In summary, the conservative-corporatist response aims to maintain
prevent unrest, conservative-corporatist regimes advocate for early and traditional social order through strategic state intervention, preservation of
strong state intervention. This proactive approach aims to address social status hierarchies, and avoidance of disruptive class mobilization. This
67
approach reflects a preference for stability and continuity over radical
change or redistribution.

68
 Unifying the Working Class: There is an ongoing struggle to unite a
differentiated working class against competing political alternatives. This
involves building coalitions that can effectively advocate for social-
democratic policies.

Electoral Power and Coalitions: Achieving numerical and electoral power is

crucial, necessitating the formation of broad coalitions that include not only
the working class but also other societal groups.

3.Broad Universalism as a Strategy:

Inclusion of Diverse Groups: The strategy of broad universalism involves

extending welfare benefits beyond just basic needs to include the
proletariat, other marginalized groups, and eventually middle classes. This
includes benefits like paid holidays that appeal to a wider demographic.

Promoting Relative Equality: By focusing on universal benefits, the social-

democratic model aims to diminish class differences that arise from market
dynamics, striving for relative equality based on citizenship rather than
market status.
The social-democratic response to welfare state development is
characterized by efforts to achieve greater equality through extensive 4.Stratification and Equality:
social rights and decommodification. This approach seeks to transform Diminishing Class Differences: The social-democratic welfare state seeks
capitalist societies by reducing individuals’ dependence on the market and to reduce class differences by providing generous, universal benefits that
promoting social solidarity. are not dependent on individual contributions. This model aims to create a
1.Ideal Situation: The ultimate goal of the social-democratic approach is a system where social policy maximizes capacities for individual
socialist revolution leading to communism, characterized by complete independence.
decommodification and equality. However, in practice, this ideal is pursued Citizenship-Based Equality: The emphasis is on achieving equality through
through gradual social-democratic reforms aimed at extending the scope citizenship rights, ensuring that all individuals have access to similar levels
and quality of social rights. of welfare support regardless of their market position.
2.Practical Struggles: In summary, the social-democratic response focuses on achieving equality
Extension of Social Rights: Social democrats strive to extend social rights through extensive social rights and universal welfare provisions. By
to allow for a higher degree of decommodification, enabling individuals to building broad coalitions and promoting policies that transcend basic
maintain a livelihood independent of market forces.

69
needs, this approach seeks to create a more egalitarian society where
individuals are less reliant on market forces for their well-being.

70
 2.Germany and Austria: In contrast, Germany and Austria had larger
estates and a strong state apparatus that aimed to maintain traditional
social differentiations. This resulted in socialist urban “ghettos” opposing a
conservative rural coalition between the state and old elites.

Post-World War II: Inclusion of Middle Classes

1.Struggle for Enhanced Social Rights: After World War II, socialists aimed
to upgrade benefits and minimize social stigma associated with welfare.
This involved extending welfare provisions beyond basic needs to include
broader segments of society, such as the middle class.

2.Sweden vs. the UK:

Sweden: The Swedish model included basic universal rights supplemented

by additional earnings-related benefits, appealing to new middle classes
through “middle-class universalism.” This approach ensured broad support
for welfare policies by including diverse social groups.

UK: In contrast, the UK did not develop such a comprehensive system,

leading middle classes to rely more on private insurance options.
Emergence of Social-Democratic Welfare States from Class Coalitions
Class Coalitions and Welfare State Construction
The development of social-democratic welfare states is often attributed to
The construction of welfare states was heavily influenced by which political
the influence of class coalitions rather than solely relying on left power
forces were able to capture the support of rural classes initially and later
resources such as labor unions or socialist parties. This approach
adapt to include growing middle classes as the working class declined.
highlights the importance of strategic alliances across different social
Originally, socialist strategies operated within a liberal framework that
classes to achieve welfare state expansion.
emphasized means-tested benefits tailored to the poor. Over time, these
Pre-World War II: Coalition with Rural Classes strategies evolved to embrace broader coalitions that could sustain
extensive welfare provisions.
1.Sweden: In Sweden, the late industrialization period saw a significant
presence of small, independent farmers. This led to the formation of a “red- In summary, the emergence and expansion of social-democratic welfare
green” coalition between social-democratic forces and rural farmers. This states were driven by strategic class coalitions that transcended traditional
coalition was instrumental in establishing a large welfare state in exchange leftist power bases. By successfully integrating rural and middle-class
for farm subsidies, effectively breaking the “liberal mold” that prioritized interests, these coalitions were able to construct robust welfare systems
market solutions. that promoted greater equality and social solidarity.

71
De-commodification index 3.Unemployment Insurance: This evaluates the level of financial security
provided to individuals who are unemployed. High decommodification
implies that unemployment benefits are generous enough to allow
individuals to live comfortably without immediate pressure to find new
employment.

Interpretation by Welfare State Regimes- Esping-Andersen’s analysis

Liberal Regimes: Typically exhibit low levels of decommodification across

all three dimensions. These regimes rely heavily on market solutions, with
minimal state intervention in providing social security. Benefits are often
means-tested and designed to encourage market participation.

Conservative-Corporatist Regimes: Show moderate levels of

decommodification. These systems often link benefits to occupational
status and contributions, preserving traditional social hierarchies. The focus
is on maintaining stability and continuity within established social
structures.

Social-Democratic Regimes: Characterized by high levels of

decommodification, providing extensive social rights that minimize reliance
on the market. These regimes offer universal benefits aimed at promoting
equality and individual independence from market fluctuations.

Significance

The table highlights how different welfare state models prioritize social
rights and economic security, reflecting broader political and social
1.Old-Age Pensions: This dimension assesses how pension systems
philosophies. By comparing the degree of decommodification, Esping-
allow individuals to retire without relying solely on market income. High
Andersen illustrates the varying capacities of welfare states to buffer
decommodification indicates that pensions provide sufficient income to
individuals from market dependencies and promote social equity. This
maintain a standard of living without additional earnings.
analysis underscores the importance of understanding welfare state
2.Sickness Benefits: This measures the ability of individuals to sustain dynamics beyond mere expenditure levels, focusing instead on how
themselves financially during periods of illness without needing to work. effectively they provide for citizens’ needs independent of market
High decommodification in sickness benefits means that the state provides conditions.
adequate support to cover living expenses during illness.

72
 4.Market Influence: Market influence evaluates the role of market
mechanisms in providing welfare benefits. A high market influence
suggests that private sector solutions, such as private insurance or
employer-based benefits, play a significant role in the welfare system.

5.Universalism: Universalism measures the extent to which welfare

benefits are available to all citizens regardless of income or need. High
universalism indicates broad access to social rights and benefits,
emphasizing equality and inclusivity.

6.Benefit Equality: This dimension assesses how equally welfare benefits

are distributed across different social groups. High benefit equality
suggests minimal differences in benefit levels based on income or
occupational status, promoting greater social equity.

Interpretation by Welfare State Regimes

Liberal Regimes: Characterized by low levels of corporatism and etatism,

Indicators of stratification - This table helps illustrate the diversity in high means testing, significant market influence, low universalism, and low
welfare state approaches by examining several key dimensions that benefit equality. These regimes rely heavily on market solutions and
influence the structure and functioning of welfare systems. provide minimal state intervention.
1.Corporatism: This dimension refers to the extent to which welfare Conservative-Corporatist Regimes: Exhibit high levels of corporatism and
provisions are organized through corporatist arrangements, where benefits moderate etatism, with a focus on preserving traditional social hierarchies
and policies are negotiated among employers, workers, and the state. High through occupationally-based benefits. These regimes have moderate
corporatism indicates strong involvement of occupational groups in the means testing and universalism but tend to maintain status differentials
administration and governance of welfare benefits. through benefit structures.
2.Etatism: Etatism measures the degree of state involvement and control Social-Democratic Regimes: Feature low corporatism but high etatism and
over welfare provisions. A high level of etatism suggests that the state universalism, with strong state involvement in providing extensive social
plays a central role in administering and financing welfare benefits, often rights. These regimes emphasize high benefit equality and minimal reliance
with less reliance on market mechanisms or private actors. on market mechanisms.
3.Means Testing: This dimension assesses the extent to which welfare Significance: Table 3.1 illustrates the diverse strategies employed by
benefits are distributed based on financial need. High means testing welfare states to address social needs and promote economic security.
indicates that benefits are targeted primarily at low-income individuals, This analysis underscores the complexity of welfare state systems and the
requiring proof of need as a condition for receiving assistance.
73
varying roles played by states, markets, and social institutions in shaping particularly the role of familialism. In Southern European countries, there is
social policy outcomes. a distinction between “supported familialism,” where the state supports
family structures, and “unsupported familialism,” where families are left to
manage without much state assistance. This reflects a reliance on
traditional family roles, often without sufficient public support for caregiving
responsibilities.

2. True Liberal vs. Labour-Led Liberal Welfare States

Redistribution via Market Incomes: There is a distinction between “true”

liberal welfare states, which strictly adhere to market principles, and
“labour-led” liberal states like the UK and Antipodean countries (Australia
and New Zealand), which incorporate more social democratic elements.
These latter states often engage in redistribution via market incomes
before social policy interventions and use affluence-testing rather than
strict means-testing to determine eligibility for benefits.

3. Mongrels Not Thoroughbreds

-Variations Within Countries: Real-world welfare states are often hybrids

rather than pure types. There are significant variations within countries and
programs that do not fit neatly into Esping-Andersen’s three categories.
This complexity is compounded by ongoing welfare reforms that challenge
the usefulness of rigid typologies.

-Declining Usefulness of Typology: Over time, as welfare states evolve, the

original typology may lose relevance. However, the underlying dimensions
Criticisms and Additional Worlds of Welfare (important)
of decommodification and stratification remain valuable for analyzing
Esping-Andersen’s typology of welfare states, while influential, has faced specific policy fields or changes over time.
several criticisms and calls for expansion to account for additional factors
-Application to Other Regions: The typology has been extended to consider
and variations not originally included in his framework. Here are some key
other regions, such as Asian “productivist” welfare states and Eastern
criticisms and proposed extensions:
European welfare systems. These regions exhibit unique characteristics
1. Gender: Supported vs. Unsupported Familialism that may not align with traditional Western models.

Southern-European Cluster: Critics argue that Esping-Andersen’s typology In summary, while Esping-Andersen’s typology provides a foundational
does not adequately address gender dimensions in welfare states, framework for understanding welfare states, it requires adaptation and
74
expansion to account for gender dynamics, regional variations, and
evolving policy landscapes. These criticisms highlight the need for a more
nuanced approach that considers diverse social, economic, and cultural
factors influencing welfare state development.

75
Gender and the Welfare State •Critique of Universalizing Frames: Orloff (2009) critiques this model for
its “falsely universalizing” approach, which implicitly adopts a masculinist
perspective. This critique highlights how such models can obscure
women’s economic contributions and reinforce gender inequalities.

Implications on Social Issues (Lewis)

1.Need: The model addresses need primarily through the lens of financial
provision by the male breadwinner, potentially neglecting the diverse needs
of other family members, particularly women and children.

2.Inequality: It perpetuates gender inequality by reinforcing traditional roles

and limiting women’s access to independent economic resources and
social rights tied to paid employment.

3.Social Risks: The reliance on a single breadwinner increases vulnerability

to social risks such as unemployment or illness, which can destabilize
Welfare States Based on the (Male) Breadwinner Model family financial security.

The concept of welfare states based on the (male) breadwinner model is a 4.Dependence: Women often become economically dependent on male
significant topic in comparative social policy. This model, as discussed by partners due to limited access to employment and social benefits, which
Lewis (1992), assumes that one family member, typically the male, are typically designed around male employment patterns.
participates in the labour market to earn a family income sufficient to 5.Citizenship: Citizenship rights in welfare states based on this model may
sustain the household. The welfare state supports this model by providing be skewed towards those who participate in paid labour markets, often
for families through benefits directed at the breadwinner, often reinforcing marginalizing women who perform unpaid domestic work.
traditional gender roles and economic dependencies.
Conclusion
•Assumption of Male Breadwinner: The model is predicated on the idea
that men are the primary earners, with women typically assuming domestic The male breadwinner model has historically shaped welfare policies,
roles. This reflects societal norms where men are expected to provide reflecting and reinforcing gendered divisions of labour. While it provides a
financially while women manage home and caregiving responsibilities. framework for understanding traditional welfare state structures, it also
highlights significant issues related to gender inequality and economic
•Family Income and Welfare Support: The family income is intended to dependency. Contemporary critiques advocate for more inclusive models
support all members, with welfare benefits acting as a safety net in case of that recognize diverse family structures and promote gender equality in
income loss. These benefits are often tied to the male breadwinner’s both domestic and public spheres.
employment status, emphasizing his role as the family’s economic
foundation.
76
 marginalize women’s economic contributions and reinforce their
dependency on men.

Social Provision of Care: The provision of care is a critical area where

gender biases are evident. Feminist critiques highlight that social welfare
systems often rely heavily on unpaid female labour for caregiving, which is
not adequately recognized or compensated by the state. Esping-
Andersen’s analysis is critiqued for assuming that male workers’
mobilization depends significantly on this unpaid female labour.

Implications for Social Policy

The feminist critiques suggest that welfare policies need to be re-evaluated

to address these gendered assumptions and inequalities. This involves:

- Recognizing and valuing unpaid work, particularly caregiving, which

Feminist Critiques of Welfare States is predominantly performed by women.
Feminist critiques, particularly those articulated by Daniels (1987) and - Redesigning policies to promote gender equality by supporting
Lewis (1997), highlight significant issues within traditional welfare state women’s participation in the labour market and ensuring equitable
models, especially concerning gender roles and labour divisions. These distribution of caregiving responsibilities.
critiques emphasize the often invisible and unpaid work performed by - Challenging patriarchal assumptions within welfare systems to
women, which is crucial to the functioning of welfare states but is frequently create more inclusive and equitable social policies that recognize
overlooked in policy design. diverse family structures and gender roles.

Unpaid and Invisible Work: Feminist scholars argue that much of the Overall, feminist critiques call for a more comprehensive understanding of
welfare provided by families is actually delivered by women through unpaid how gender dynamics shape welfare states and advocate for policies that
labour. This work remains largely invisible in economic analyses and policy promote gender equality and recognize the contributions of both paid and
formulations, despite being essential for societal functioning. unpaid work.

Gender Relations: The critiques focus on how welfare policies are derived
from gendered assumptions that reinforce traditional gender roles. These
include the division of labour and power dynamics within families, where
men are often seen as breadwinners and women as caregivers.

Patriarchal State Structures: Policies based on the male breadwinner

model are seen as perpetuating a patriarchal state structure. This model
assumes men as primary earners and women as dependents, which can
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 Two-Tiered Gendered Income Maintenance System: (Nelson) The welfare
system is often stratified into two tiers: insurance-based benefits (“first-
class”) primarily accessed by men through their labour market participation,
and assistance-based benefits (“second-class”) more commonly accessed
by women, particularly mothers. This system reinforces gender inequalities
by providing unequal access to social benefits based on gendered
assumptions about work and family roles.

Implications for Mothers: Assistance-based benefits are often less

generous and more stigmatized than insurance-based ones, placing
mothers at a disadvantage. This stratified system reflects broader societal
norms that undervalue women’s contributions both in the labour market
and in caregiving roles.

Decommodification (of Esping Andersen) Conclusion

Different Meanings of Decommodification: Decommodification refers to the Feminist critiques underscore the need for welfare policies that recognize
degree to which individuals can maintain a livelihood without reliance on and address the gendered dimensions of decommodification and
the market. For women, decommodification often results in increased stratification. By challenging traditional assumptions about gender roles,
unpaid caregiving work, as they are expected to fulfil domestic roles when these critiques advocate for more equitable systems that support both
not engaged in paid employment. economic participation and caregiving responsibilities for women. This
involves rethinking welfare structures to ensure they promote gender
Need for Commodification: Some feminist scholars argue for
equality and empower women economically and socially.
commodification, particularly for women, as it can provide economic
independence and the capacity to form autonomous households. This
perspective highlights the importance of paid work in empowering women
and reducing dependency on male breadwinners.

Right to Work and Care: Feminists advocate for policies that support
women’s right to work and maintain autonomous households while also
ensuring they have time for caregiving responsibilities. This dual approach
aims to balance economic participation with personal and family care
needs.

Stratification

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79
Gender-sensitive approach to Welfare Regime Research, focusing on Standard of Living Independence: According to Lister (1994),
defamilialisation defamilialisation measures the degree to which adults can sustain a
socially acceptable standard of living without relying on family ties. This
independence can be achieved through access to paid employment or
robust social security systems.

Dependence on Patriarchal Family Structures: MacLaughlin and

Glendinning (1994) describe defamilialisation as varying the extent to
which well-being is dependent on patriarchal family relationships. This
involves assessing how welfare provisions either reinforce or reduce
reliance on traditional family structures.

Implications for Welfare Policy

A gender-sensitive approach to welfare regime research that focuses on

defamilialisation has several implications:

The concept of defamilialisation, as explored by scholars such as Lister Policy Design: Policies should be designed to support both men’s and
(1994) and MacLaughlin and Glendinning (1994), is a critical aspect of women’s ability to live independently from familial obligations if they
gender-sensitive welfare regime research. It examines the extent to which choose. This includes providing adequate childcare services, flexible
individuals, particularly women, can maintain a socially acceptable working conditions, and comprehensive social security benefits.
standard of living independently of family relationships, either through paid
Economic Independence: Encouraging economic independence for women
work or social security systems.
through employment opportunities and social security benefits can reduce
Key Elements of Defamilialisation their dependence on traditional family roles and promote gender equality.

Right (Not) to Care: Defamilialisation emphasizes the individual’s right to Care Responsibilities: Recognizing and redistributing care responsibilities
choose whether or not to engage in caregiving roles. This challenges is crucial. Policies should aim to balance caregiving duties across genders,
traditional expectations that women should automatically assume allowing both men and women the right not only to work but also to engage
caregiving responsibilities within families. in care if they choose.

Organization of (Child)care: The way childcare is organized is a Overall, defamilialisation offers a framework for understanding how welfare
significant factor in defamilialisation. It involves examining how state states can support individual autonomy and gender equality by reducing
policies and services support or hinder individuals’ ability to balance work dependency on familial relationships for economic security. This approach
and family life, thereby influencing their economic independence. challenges patriarchal norms and seeks to create more equitable social
structures.

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 breadwinners for economic security and access to social benefits.
Examples include Germany, Great Britain, and Ireland, where women
typically work part-time and receive social benefits through their husbands.

2.Mediterranean Welfare Regimes: In these regimes, women are treated

based on family roles but are not protected from the market. The state
exerts control over women’s paid and unpaid work due to a lack of
minimum provisions, assuming care work as a given. This model is
prevalent in Italy, Spain, and Greece, where fewer women work, but those
who do often work full-time and receive benefits through their employment
status.

3.Universalist Welfare Regimes: These regimes treat women primarily as

workers and protect them from the labour market based on their roles as
mothers. They aim for real equality of opportunities without controlling
women’s paid or unpaid work. This model is seen in Northern European
countries like Sweden and Denmark, where women have access to
benefits and services based on their worker status.

4.Liberal Welfare Regimes: Here, women are treated primarily as workers

without protection from the market. The state minimally intervenes in family
roles unless in cases of extreme poverty. This model is typical in the USA
and Australia, where many women work but receive little state protection.

Implications for Gender Equality

Gender Discrimination: The typology highlights varying levels of gender

discrimination across different welfare regimes. Breadwinner and
Mediterranean models tend to reinforce traditional gender roles, while
universalist regimes promote more gender equality.

Economic Independence: Universalist regimes support women’s

economic independence by facilitating their participation in the labour
1.Breadwinner Welfare Regimes: These regimes treat women primarily market and providing social benefits as workers rather than dependents.
as wives and mothers, offering protection from the market. This model is
characterized by high gender discrimination, as women often rely on male

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Role of Family: Mediterranean regimes emphasize the family’s role in
social protection, with limited state intervention supporting family strategies
to gather income from various sources.

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How can we compare gender equality across countries? rankings. These methodological choices are crucial for ensuring
meaningful comparisons over time and across different regions.
Comparing gender equality across countries involves analysing various
dimensions of gender disparities and utilizing specific indices to gauge Intersectionality: Effective measurement should consider intersectional
progress. Several methodologies and indices have been developed to factors such as race, class, and ethnicity that intersect with gender to
facilitate this comparison, each focusing on different aspects of gender create unique experiences of inequality.
inequality.
Empirical Analysis
Key Indices for Measuring Gender Equality
Empirical studies often use these indices to identify patterns of gender
1.Gender Inequality Index (GII): Developed by UNDP, the GII inequality across different welfare regimes. For example:
measures gender inequalities in three important aspects of human
•Social-Democratic Regimes: Typically exhibit high levels of
development—reproductive health, empowerment, and economic status. It
female labour force participation due to supportive policies like childcare
reflects how these inequalities affect the overall development potential of a
services and parental leave.
country.
•Liberal Regimes: Focus on formal equality in labour markets but
2.Global Gender Gap Index (GGI): Introduced by the World
may lack comprehensive support systems for balancing work and family
Economic Forum, the GGI assesses gender parity across four dimensions:
life.
economic participation and opportunity, educational attainment, health and
survival, and political empowerment. The index provides a comprehensive •Conservative Regimes: Often emphasize traditional family roles
overview of gender gaps in various countries and tracks progress over with less support for female labour market participation.
time.
Comparing gender equality across countries requires a nuanced
3.Social Institutions and Gender Index (SIGI): Created by the understanding of various indices and their methodological frameworks.
OECD, SIGI focuses on discriminatory social institutions that impact These tools help highlight both progress and persistent challenges in
gender equality. It examines legal frameworks, cultural norms, and achieving gender parity globally. By analysing these indices, policymakers
practices that perpetuate gender discrimination. can better understand the effectiveness of their interventions and identify
areas needing improvement to promote gender equality comprehensively.
Methodological Considerations

Dimension Coverage: Different indices cover varying dimensions of gender

inequality, which can influence their results and interpretations. For
instance, GGI focuses on outcome variables like participation in the
economy and political involvement.

Normalization and Aggregation: The methods used to normalize input

variables and aggregate them into a composite index can affect country

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 Levels of Women’s Earning Dependency: This measure examines the
extent to which women rely on their partners’ income, highlighting
economic vulnerability and dependency.

Access to Managerial Positions (Vertical Segregation): This indicator

reflects women’s representation in leadership roles, addressing vertical
occupational segregation and barriers to advancement.

Occupational Segregation (Horizontal Segregation): This measure

looks at the distribution of women across different job sectors, indicating
gender-based division in employment types.

Women’s Representation in Quintile 1 (Low Income) and Quintile 5

(High Income): These measures assess women’s presence at both ends
Labour Market Participation Rate of All Women: This indicator of the income spectrum, providing insights into economic disparities within
measures the overall involvement of women in the workforce, reflecting gender groups.
their economic engagement and independence.
Gender Wage Gap: This critical indicator measures the difference in
Labour Market Participation Rate of Mothers of Preschoolers: This earnings between men and women, highlighting systemic pay inequalities.
measure focuses on the employment rates of mothers with young children,
highlighting the challenges and opportunities they face in balancing work Educational Wage Gap Among Women: This measure examines wage
and family responsibilities. disparities among women based on educational attainment, indicating how
education impacts earning potential within gender groups.
Percentage of Dual-Earner Households: This statistic indicates the
prevalence of households where both partners are employed, suggesting Poverty Rate Among Lone Mothers: This statistic reflects the economic
shifts towards more egalitarian economic roles within families. challenges faced by single mothers, who often experience higher poverty
rates due to limited income sources and support.
Percentage of Male Breadwinner Households: This measure reflects
traditional family structures where the male is the primary or sole earner, Mandel’s work underscores the importance of using a multidimensional
often associated with gendered economic dependency. approach to understand and address gender inequality effectively. By
considering various indicators, policymakers and researchers can develop
Percentage of Working Mothers Who Work After Childbirth and During more targeted strategies to promote gender equality globally.
the Child-Rearing Period: This indicator assesses the continuity of
women’s employment following childbirth, which is crucial for
understanding career impacts and economic security.

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 Interpretation in Mandel’s Study

In Mandel’s study, the ANOVA F-test and p-values help determine whether
there are significant differences in gender inequality factors across welfare
regime clusters:

•F-Test: For each indicator, the F-test assesses whether there is a

statistically significant difference in means across the clusters (e.g., social-
democratic, liberal, and conservative regimes).

•P-Value: A p-value less than 0.05 indicates that the differences in

means are statistically significant. In Table I, most indicators show a p-
value of 0.00, suggesting strong evidence of significant differences across
clusters for those factors.

Interpretation of the table

Social-Democratic Regimes generally show higher female labor force

participation, lower economic dependency, and better support systems for
Analysis of Variance (ANOVA) is a statistical method used to compare the working mothers, but also exhibit high occupational segregation.
means of three or more groups to determine if there are any statistically
Liberal Regimes have higher access to managerial positions but also
significant differences between them. It assesses whether observed
higher gender wage gaps and educational wage disparities among women.
differences in group means are likely due to random chance or reflect
genuine differences. Conservative Regimes, particularly in Southern Europe, maintain traditional
gender roles with high male breadwinner households and lower female
•F-Value: The F-value is a ratio that compares the variance
labor force participation, but smaller gender wage gaps due to fewer
between group means (between-group variability) to the variance within
women participating in the workforce.
groups (within-group variability). A higher F-value indicates greater
between-group variability relative to within-group variability, suggesting that These findings underscore the complex interplay between welfare state
not all group means are equal. strategies and gender inequality, highlighting how different regimes can
promote or hinder gender equality through their policies and institutional
•P-Value: The p-value indicates the probability that the observed
frameworks.
differences in means occurred by random chance. A low p-value (typically
less than 0.05) suggests that the differences are statistically significant,
meaning they are unlikely to have occurred by chance.

85
 participating less due to childcare responsibilities and societal expectations
around caregiving.

Preschool Children: Mothers of preschool-aged children often have even

lower participation rates compared to those with older children, reflecting
the intensive care demands during early childhood that can limit
employment opportunities.

3.Intersection of Education and Motherhood:

The interaction between education level and motherhood status is crucial.

Highly educated mothers may still participate in the labour market at higher
rates compared to less educated mothers, highlighting how education can
mitigate some of the employment barriers associated with motherhood.

Conversely, less educated mothers might face compounded challenges

that significantly reduce their labour market engagement.

Implications for Policy

Supportive Policies for Mothers: To increase labour force participation

among mothers, especially those with young children, policies such as
affordable childcare, flexible working arrangements, and parental leave are
1.Impact of Education on Labor Force Participation:
essential.
Higher Education Levels: Women with higher education levels generally
Education and Training Programs: Enhancing access to education and
show higher labour force participation rates. This trend reflects the
vocational training for women can improve their employment prospects and
increased opportunities and incentives for educated women to engage in
enable them to participate more fully in the labour market.
the workforce, as they often have access to better job prospects and higher
earnings. Targeted Interventions: Recognizing the specific needs of different groups
(e.g., less educated mothers) can help tailor interventions that address
Lower Education Levels: Women with lower education levels tend to have
unique barriers to employment.
lower participation rates. This may be due to limited job opportunities, lower
wages, and greater economic barriers to entering the workforce. Overall, Figure II underscores the importance of considering both
educational attainment and motherhood status when analysing women’s
2.Motherhood and Employment:
labour force participation. These factors interact in complex ways that
Mothers vs. Non-Mothers: The figure likely shows a disparity in labour force influence women’s economic activity across different societal contexts.
participation between mothers and non-mothers, with mothers generally
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 less occupational segregation, meaning women are not as concentrated in
low-paying, traditionally female-dominated jobs.

Less Segregation: While overall participation is lower, those who do work

face less occupational segregation. This means there is a more even
distribution of men and women across different job sectors, which can lead
to better job opportunities and conditions for women who are employed.

Overall, conservative regimes tend to reinforce traditional gender roles

through limited employment support and incentives that encourage women
to prioritise family over work. However, for those women who do work, the
conditions can be relatively favourable due to less occupational
segregation.

Liberal Regimes

Left to Market (Lack of Regulation): In liberal welfare states, the labour

Conservative Regimes (important slide)
market is largely unregulated, and the state plays a minimal role in
Limited Support for Employment: Conservative welfare states provide providing social services. This laissez-faire approach means that women
minimal support for women’s employment, often lacking policies that must navigate the labour market with little state intervention or support.
facilitate work-life balance, such as affordable childcare or extensive
Women Need to Compete with Men for Equal Rights & Recognition:
parental leave. This limited support discourages women’s participation in
Women in liberal regimes are expected to compete equally with men in the
the labour force.
labour market to achieve rights and recognition. This competition is based
Promotion of Traditional Family Models: These regimes emphasise on the principle of formal equality, where opportunities are theoretically
traditional family structures, where women are often expected to take on equal, but practical barriers may still exist.
caregiving roles. Financial incentives, such as child allowances, encourage
Anti-Discrimination Measures & “Formal Egalitarian”: Although there is a
women to stay at home rather than enter the workforce.
lack of extensive regulation, liberal regimes often implement anti-
Lower Women’s Labor Market Participation: Due to the emphasis on discrimination laws aimed at ensuring equal access to employment
traditional family roles and lack of supportive employment policies, opportunities. These measures promote a formal egalitarian approach,
women’s participation in the labour market is generally lower in focusing on equality of opportunity rather than outcomes.
conservative regimes compared to liberal or social-democratic regimes.
Higher Women’s Labor Market Participation: Women in liberal regimes tend
Better Conditions for Those Working: Women who do participate in the to have higher labour market participation rates compared to conservative
labour market in conservative regimes often experience better working regimes. This is partly due to the necessity for economic independence in
conditions compared to their counterparts in liberal regimes. This includes the absence of robust social support systems.
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Less Segregation: There is generally less occupational segregation in Social Rights Based on Paid Work: In these regimes, social rights and
liberal regimes, meaning women are more evenly distributed across benefits are closely tied to paid employment. This linkage encourages high
different job sectors compared to other welfare models. levels of labour force participation among women, as access to social
benefits is contingent upon engagement in the workforce.
Poorer Conditions for Lower-End Jobs: Despite higher participation rates,
women in lower-end jobs often face poorer working conditions. These Highest Women’s Labor Market Participation: Social-democratic countries
positions are frequently overrepresented by women, contributing to a boast the highest rates of female labour market participation, regardless of
greater gender pay gap. educational level or motherhood status. This is largely due to supportive
policies that enable women to balance work and family responsibilities
Greater Gap Among Women (by Education Level, Motherhood): There is a
effectively.
significant disparity among women based on education levels and
motherhood status. Highly educated women and those without children Limited Access to Top Positions: Despite high participation rates, women in
tend to fare better economically than their less educated or mother social-democratic regimes often face barriers to reaching top positions.
counterparts. There is a notable concentration of women in “female jobs” within the
public sector, which limits their access to higher-status and higher-paying
Feminisation of Poverty (Especially Lone Mothers): The lack of
roles.
comprehensive social support systems leads to a feminisation of poverty,
particularly affecting lone mothers who struggle with balancing work and “Female Jobs” in Public Sector, Increased Segregation: Women are
family responsibilities without adequate state assistance. disproportionately represented in public sector jobs, which are typically
lower-paying and more segregated by gender. This occupational
Overall, liberal regimes promote high female labour force participation
segregation contributes to persistent gender disparities in income and
through market mechanisms and anti-discrimination policies but often fail to
career advancement.
address deeper structural inequalities that lead to economic disparities
among women. Low Dependency: Due to continuous workforce participation and access to
independent income, women in social-democratic regimes experience low
Social-Democratic Regimes
economic dependency on their partners. This economic independence is
State as Employers & Employment-Promoting Policies: Social-democratic further supported by state-provided services that mitigate the financial
regimes actively involve the state in the labour market, often acting as impact of caregiving responsibilities.
significant employers and implementing policies that promote employment.
Overall, social-democratic regimes effectively promote women’s labour
These policies include extensive public services such as subsidised
market participation through supportive state policies, but they also face
childcare and parental leave, which facilitate women’s participation in the
challenges related to occupational segregation and limited access for
workforce.
women to top positions.

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89
90
6- Explaining welfare state reform – The ‘New Politics’-perspective rates. This model contributed significantly to economic growth during this
time.
No ‘retrenchment’, resilience
Adequate Social Protection: The era saw the establishment and
expansion of social protection systems, including health care, pensions,
and unemployment benefits. These systems were designed to provide a
safety net for citizens and were a key component of the welfare state.

Public Employment: Governments played a significant role in providing

employment through public sector jobs, which helped maintain low
unemployment rates and supported economic stability.

Interdependency Between Capitalism and Democracy: During Les

Trente Glorieuses, there was a notable interdependency between
capitalism and democracy. Economic growth facilitated by capitalist market
mechanisms provided the resources needed to expand democratic welfare
states. In turn, democratic institutions helped manage capitalism’s
excesses through regulation and redistribution policies.

Compromise Between Labour and Capital: A central feature of this

period was the compromise between labour and capital. This compromise
involved negotiations between employers, workers, and governments to
Les Trente Glorieuses - years of economic prosperity. This era is ensure that economic growth translated into rising living standards for
characterised by significant economic growth, social progress, and the workers while maintaining profitability for businesses. This social contract
expansion of the welfare state. underpinned the stability and prosperity of Les Trente Glorieuses.
Era of Keynesianism: This period was marked by the widespread Expansion of the Welfare State: The factors mentioned above collectively
adoption of Keynesian economic policies, which advocated for government contributed to the expansion of the welfare state during this period. The
intervention to stabilise the economy and promote full employment. These synergy between economic policies, industrial practices, and social
policies were instrumental in driving post-war economic recovery and protections worked together to create an environment conducive to
growth. enlarging the welfare state, which provided comprehensive services to
Fordist Production: The term “Fordism” refers to the system of mass citizens.
production and consumption pioneered by Henry Ford. During Les Trente In summary, Les Trente Glorieuses was a transformative period
Glorieuses, industrial production was geared towards mass consumption, characterised by robust economic growth driven by Keynesian policies and
characterised by low costs, increased productivity, and low unemployment Fordist production methods. The era’s success relied on a delicate balance

91
between capitalism’s demands and democratic governance’s social
responsibilities.

92
 aimed to address economic challenges through fiscal discipline, trade
liberalization, privatization, and deregulation. The consensus encouraged
the globalization of production, trade, and capital, promoting the offshore
outsourcing of low-skilled industrial work to low-wage countries to reduce
labour costs.

Implications

Globalization: The combination of these events accelerated globalization.

Multinational corporations expanded their operations worldwide, taking
advantage of deregulated markets and cheaper labour costs in developing
countries. This shift facilitated the increased global circulation of capital,
goods, and labour.

Economic Shift: The oil crisis highlighted vulnerabilities in economies

dependent on fossil fuels, prompting shifts towards more diversified energy
sources. It also underscored the need for economic policies that could
withstand such shocks.

Overall, the period from 1971 to 1973 was pivotal in transitioning from post-
The early 1970s marked a crucial turning point in the global economy, war economic models to more liberalized and globally integrated
characterized by significant events that reshaped economic policies and economies. These changes laid the groundwork for contemporary
practices worldwide. economic practices and policies.

Oil Crisis (1973): The oil crisis was triggered by the Organization of Arab
Petroleum Exporting Countries (OAPEC) in response to the U.S. support
for Israel during the Yom Kippur War. The crisis led to an oil embargo,
causing a severe shortage and a dramatic increase in oil prices. This event
marked the end of the Fordist production regime, which relied heavily on
cheap oil for mass production and consumption. The embargo led to a
quadrupling of oil prices, significantly impacting global economies by
increasing inflation and unemployment rates.

Washington Consensus: Emerging as a response to economic

stagnation, the Washington Consensus advocated for deregulation and
liberalization of international trade and capital flows. This set of policies

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 Ageing Populations: As populations age, there is an increasing demand for
pensions and healthcare services, putting additional financial pressure on welfare
systems. The ratio of working individuals to retirees is shrinking, which challenges
the sustainability of pay-as-you-go pension systems.

Female Employment, Family Instability, and Low Fertility: Changes in family

structures and increased female participation in the workforce have altered
traditional support systems. Low fertility rates further exacerbate demographic
pressures by reducing future generations’ workforce size.

Wage and Income Inequality: Rising income inequality can strain welfare
systems as more individuals require assistance while fewer contribute significantly
to funding these programs. This disparity can lead to increased demands on
welfare services while reducing available resources.

Immigration: Immigration can both challenge and support welfare states. While
Structural Unemployment and Decline of Industrial Jobs: The decline of
immigrants contribute to the labour force, they may also increase demands on
industrial jobs in Western economies has led to structural unemployment, where
social services if integration policies are inadequate or if they face barriers to
workers’ skills no longer match the available jobs. This shift reduces the number of
employment.
workers contributing to social security systems, thereby eroding the tax base that
funds welfare programs. These challenges lead to several consequences for welfare states:

Expansion of the Service Sector (Baumol’s Cost Disease): As economies 1.Erosion of Social Contributions and Tax Base: As structural unemployment rises
transition from manufacturing to service-oriented, productivity growth in the service and industrial jobs decline, fewer people contribute to social security systems,
sector lags behind that of industry. Despite this, wages in services tend to rise in weakening their financial base.
line with industrial wages, leading to higher costs for service provision without
corresponding productivity gains. This phenomenon is known as Baumol’s cost 2.Increasing Claims on Welfare State: Economic globalisation and demographic
disease and contributes to increasing costs in sectors like healthcare and changes increase demands on welfare systems for services like unemployment
education. benefits, pensions, and healthcare.

Economic Globalization and the Power of Multinationals: Globalization has 3.Deficits Leading to Government Debt: The mismatch between rising demands
increased the mobility of capital, goods, and labour, enabling multinational and eroding financial bases leads to deficits that often result in increased
corporations to move operations to low-wage countries. This capital flight can government debt.
undermine domestic investment and job creation, limiting governments’ ability to Responses: In response to these challenges, governments often resort to:
regulate economies and protect workers’ rights. It also strengthens the bargaining
power of capital over governments and unions. 1.Fiscal Austerity: Implementing austerity measures to reduce deficits can lead to
cuts in social spending, affecting welfare provision.

2.Vertical Redistribution: There is a growing need for more targeted

redistribution policies to address inequalities exacerbated by these challenges.

94
3.Legitimacy Problems: As governments struggle with fiscal constraints while
trying to meet increasing demands for social services, they may face legitimacy
issues if citizens perceive welfare retrenchment as unfair or inadequate.

95
New Politics’-perspective: politics of welfare state reform (Pierson) Policy Feedback Process: The welfare state itself transforms the politics of
social policy through a feedback mechanism. Welfare programs create their
own constituencies, which can influence policymakers even without organised
activity. This means that once established, welfare programs generate political
support that makes retrenchment difficult.

Influence of Interest Groups: The focus shifts from the declining power of
left-wing actors to the role of various political actors and interest groups. These
groups, including those representing beneficiaries of social programs, have
become significant players in shaping welfare state policies.

Institutional Design: The structure of political systems affects how welfare

state reforms are implemented. Systems that concentrate authority also
concentrate accountability, making it easier to assign blame for unpopular
decisions. Leaders like Margaret Thatcher and Emmanuel Macron illustrate
how concentrated authority can facilitate decisive action but also heighten
accountability.

Implications for Welfare State Reform: “New Politics” perspective suggests

that reforming welfare states involves navigating a complex landscape where
entrenched interests, institutional structures, and public perceptions play
The “New Politics” perspective on welfare state reform highlights the distinct
critical roles. Policymakers must balance the need for fiscal sustainability with
challenges and dynamics involved in retrenching welfare states compared to
the political risks associated with reducing benefits. This often leads to
their expansion. This approach, as articulated by Paul Pierson and others,
incremental changes rather than sweeping reforms, as governments seek to
emphasises the complexities of reducing welfare state provisions in the face of
mitigate potential backlash from voters and interest groups.
entrenched interests and political realities.
Negativity Bias: Negativity bias refers to the tendency of individuals to give
Retrenchment vs. Expansion: Retrenchment, or the reduction of welfare
more weight to negative experiences or information than positive ones. In the
state benefits, is qualitatively different from expansion. While expanding
realm of politics and policy-making, this bias manifests in voters’ stronger
welfare programs involves enacting popular policies and claiming political
reactions to losses compared to gains. For instance, when social programs are
credit, retrenchment requires politicians to implement unpopular cuts, often
cut, the negative impact on those who lose benefits is more pronounced than
leading to blame avoidance strategies rather than credit claiming.
any positive effects from such policy changes. This bias makes it challenging
Credit Claiming and Blame Avoidance: Politicians face a “negativity bias” for politicians advocating for retrenchment because voters are more likely to
where voters are more sensitive to losses than gains. As a result, policymakers mobilise against perceived losses than they are to support potential gains.
often employ strategies to avoid blame for welfare cutbacks, such as Negativity bias thus complicates efforts to implement retrenchment policies, as
obfuscating responsibility or minimising the visibility of cuts. it heightens the political risks associated with reducing welfare benefits.

96
 Lower Visibility: Changes are made in ways that are not immediately
obvious to the public. This includes altering benefit formulas, such as
indexation adjustments, which gradually reduce benefits over time without
direct cuts. Techniques like “trimming” and “pruning” are used to subtly
reduce expenditures without drawing significant attention.

Obfuscation: Policymakers obscure the causal link between government

actions and negative outcomes in voters’ lives. This can involve failing to
adjust benefits for inflation, thereby eroding their value over time, or
deflecting blame onto external entities like the European Union (as seen in
Brexit discussions). Decentralisation without adequate resources is another
tactic, shifting responsibility to lower levels of government.

Divide and Conquer: This strategy involves creating divisions among

political opponents to prevent unified opposition. Examples include selling
public housing to tenants, which can create vested interests among new
homeowners, or delaying the implementation of policies to shift burdens
onto future generations.
Blame Avoidance: Blame avoidance is a political strategy used by
Compensation: Offering side-payments or concessions to specific groups
policymakers to evade responsibility for unpopular decisions, particularly in the
that could mobilise against reforms helps build consensus and mitigate
context of welfare state retrenchment. This strategy is crucial because
opposition. This is particularly relevant in corporatist welfare states where
retrenchment often involves cutting back on social programs, which can lead to
consensus packages can be negotiated with key stakeholders.
immediate and concentrated losses for specific groups of voters. Politicians
tend to avoid blame for these unpopular policies because the costs are more Justification (Vice-into-Virtue Strategy): Policymakers attempt to justify
apparent and immediate than the benefits, which are often diffuse and retrenchments by framing them as necessary for saving the welfare state
uncertain. Consequently, policymakers may attempt to obscure the effects of or correcting its inefficiencies. (we have to save it by retrenching it) This
policy changes or make it difficult for voters to trace these changes back to involves persuading voters that tough measures are required due to
them. This is done to minimise political backlash and maintain electoral budgetary crises or other pressing issues, turning potential vice into
support. perceived virtue.
Blame avoidance is a critical strategy for policymakers when implementing These strategies reflect the complex political calculus involved in welfare
welfare state retrenchments, as these actions often involve unpopular state reform, where maintaining support while implementing necessary
decisions that can lead to electoral backlash. Various tactics are employed changes is a delicate balance. By employing these tactics, governments
to minimise political costs and diffuse responsibility. aim to navigate the challenging terrain of welfare retrenchment with
minimal political fallout.
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98
 Institutional Resilience vs. Inertia: While institutions may appear
resilient, this does not necessarily imply inertia. Institutional structures can
adapt over time, reflecting shifts in political and economic pressures
without necessarily undergoing radical changes.

Challenges in Tracing Reforms: The difficulty in identifying clear trends in

welfare state reforms underscores the need for research to focus on
subfields and qualitative analyses. Researchers should look for “reforms
that indicate structural shifts,” such as increased selectivity in benefits over
time, rather than relying solely on quantitative trends.

Implications for Research

1. Qualitative Focus: Given the complexity of modern welfare state

politics, qualitative research methods are essential to uncover the
nuanced processes and negotiations that drive policy changes.
2. Interest Groups and Politics: Research should explore the role of
various political actors and interest groups beyond traditional left-
wing coalitions, as these groups increasingly influence welfare state
The evolution of welfare state politics from “old politics” to “new politics” policies.
has significant implications for research in this field. The complexity and 3. Institutional Design: The design of political institutions plays a
changing dynamics of welfare state reform require a shift in research focus crucial role in how welfare state reforms are implemented and
and methodology. perceived. Systems that concentrate authority also concentrate
accountability, affecting how reforms are negotiated and executed.
Complexity of New Politics: Unlike the straightforward expansion of
welfare states in the past, current reforms involve complex negotiations Overall, the shift from “old” to “new” politics in welfare state research
and trade-offs between various interest groups. This necessitates a highlights the need for more detailed and context-specific studies that
qualitative research approach to understand how policy changes occur in account for the complex interplay of political, economic, and institutional
specific fields and contexts. factors shaping contemporary social policy.
Focus on Conservative-Corporatist Countries: In conservative-
corporatist countries, where welfare systems are deeply embedded,
reforms often involve intricate negotiations among entrenched interest
groups. These countries provide a rich context for studying the
complexities of welfare state reform.

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Age politics as a form of ‘new politics’

Methodology

Models: The study employs panel or longitudinal models to analyse

changes within nations over time. This approach allows for examining how
shifts in demographics and political structures impact pension spending.

Controlling for Alternative Explanations: The researchers control for various

alternative explanations that might also influence pension spending. This
includes factors like industrialisation levels, political democracy, and social
insurance program experience, which could affect the relationship between
the elderly population’s growth and pension expenditure.

Empirical Strategy: The empirical strategy involves statistical techniques

that separate these alternative explanations to isolate the specific impact of
demographic changes on pension spending. This includes investigating
underlying mechanisms such as political mobilisation by elderly
populations.

Key Findings

The concept of age politics, as explored by Pampel and Williamson (1985) 1.Age Politics Over Class Politics: The study finds that class politics play
in their study published in the American Sociological Review, examines the a lesser role in determining pension spending compared to age politics. As
political dynamics surrounding public pension expenditures and how these the elderly population grows, it forms a significant interest group that
are influenced by demographic changes, particularly the growth of the influences policy decisions, often independently of traditional class-based
elderly population. political dynamics. (is the reason the ageing population or economic
necessities?)
Research Question and Unit of Analysis
2.Policy Feedback: The welfare state itself generates new interest groups,
Research Question (RQ): The study investigates how the growth of the such as retirees, who become politically influential. These groups can affect
elderly population affects public pension spending across different nations further welfare state expansion or resist retrenchment efforts, highlighting a
and what political factors contribute to this relationship. feedback loop where existing policies shape future political landscapes.
Unit of Analysis: The unit of analysis is the nation-state, with data collected Overall, Pampel and Williamson’s work underscores the importance of
on public pension expenditures across 48 countries at various stages of demographic factors in shaping welfare state policies, particularly
political and economic development. pensions, and illustrates how age-related interest groups can exert

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significant influence on social policy beyond traditional class-based
frameworks.

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 chosen because it allows for the analysis of changes within nations over
time, capturing both cross-sectional and longitudinal data. By focusing on
changes within nations, the study can better isolate the effects of
demographic and political variables on pension spending.

Why Not Include Level of Democracy as a Control?: Pampel and

Williamson’s decision not to include the level of democracy as a control
variable for the total sample, but rather to analyse it separately, likely stems
from their interest in understanding how democracy interacts with other
variables like the percentage of elderly population. By examining these
interactions separately, they can more clearly identify how democratic
structures might amplify or mitigate the effects of demographic changes on
pension expenditures. Including democracy as a control for the entire
sample could obscure these nuanced interactions. The separate analysis
allows for a more detailed exploration of how democracy influences the
relationship between age structure and pension spending, potentially
revealing that the political power of elderly populations is more pronounced
What is the unit of analysis? Why this set-up in the analyses? Why not in democratic contexts.
include level of democracy as control for total sample and look at
interaction-effect between level of democracy and % aged? Interaction Effects: While an interaction effect between democracy levels
and the percentage of aged population could directly test how these factors
If an unstandardised coefficient for a predictor variable is, for example, 0.5, this suggests
jointly influence pension spending, analysing them separately provides a
that a one-unit increase in that predictor is associated with a 0.5 unit increase in pension
expenditures, assuming other factors remain constant. A standardised coefficient reflects clearer picture of how these variables operate under different political
how many standard deviations the dependent variable will change per standard deviation regimes. This approach helps highlight that in more democratic nations, the
increase in the predictor variable. This is useful for comparing the relative importance of aged population may exert greater political influence, leading to increased
different predictors within the model. pension expenditures.
Unit of Analysis:The unit of analysis in Pampel and Williamson’s study is Why these two dependent vars? Control for affluence and affluence + size of the aged
the nation-state. The researchers examine public pension expenditures population (average pension benefit per person => measure of pension generosity) =>
across 48 countries at different levels of political and economic better approximation of age politics rather than ‘mechanic’ effect of % aged with increasing
number of recipients.
development over four time points: 1960, 1965, 1970, and 1975. This
cross-national approach allows them to analyse how various factors, Energy use is only sign in low democracy group => a minimum level of economic
including age structure and political context, influence pension spending. development is necessary for pensions to emerge in low democracy countries. Further
economic growth has however little influence of pension expenditure. Effect of age politics in
Analytical Setup:The study uses Maximum Likelihood Generalized Least stronger in more democratic contexts. The political influence of the aged becomes more
Squares (MGLS) estimates to model pension expenditures. This method is important in raising pensions.

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Main mechanisms is operationalized (democracry) whilst avoiding multicollinearity by
splitting the sample for all countries.

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 both cross-sectional and longitudinal data, allowing for an analysis of
changes within nations over time. The setup is designed to capture the
dynamic relationship between demographic changes, such as the aging
population, and pension expenditures while controlling for other variables.

Why Not Include Level of Democracy as a Control?

Pampel and Williamson’s decision not to include the level of democracy as

a control variable for the total sample but instead analyse it separately
likely stems from their interest in understanding how democracy interacts
with other variables like the percentage of elderly population. By examining
these interactions separately, they can more clearly identify how
democratic structures might amplify or mitigate the effects of demographic
changes on pension expenditures.

Including democracy as a control for the entire sample could obscure these
nuanced interactions. The separate analysis allows for a more detailed
exploration of how democracy influences the relationship between age
structure and pension spending, potentially revealing that the political
power of elderly populations is more pronounced in democratic contexts.

Interaction Effects

While an interaction effect between democracy levels and the percentage

of aged population could directly test how these factors jointly influence
Unit of Analysis
pension spending, analysing them separately provides a clearer picture of
In Pampel and Williamson’s study, the unit of analysis is the nation-state. how these variables operate under different political regimes. This
The study examines public pension expenditures across 48 countries at approach helps highlight that in more democratic nations, the aged
different levels of political and economic development over four time points: population may exert greater political influence, leading to increased
1960, 1965, 1970, and 1975. This approach allows for a comprehensive pension expenditures.
analysis of how demographic and political factors influence pension
Overall, this methodological choice reflects an effort to disentangle
spending across diverse contexts.
complex relationships between demographic factors and political structures
Analytical Setup in shaping welfare state policies.

The study uses Maximum Likelihood Generalized Least Squares (MGLS)

estimates to model pension expenditures. This method effectively handles
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TN: Not really a direct test of age politics, because all countries belong to
high democracy group. But effect of electoral competition and effect of %
aged is not explained by economic affluence and also not by class politics.

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How much retrenchment has there been? 2. Operationalization of Retrenchment: Measuring retrenchment
is complex and can be approached through various dimensions such as
recommodification, cost containment, and recalibration. Recommodification
involves increasing dependency on the labour market by reducing benefits,
while recalibration focuses on modernizing welfare policies to meet
contemporary needs. The operationalization affects how retrenchment is
perceived and implemented.

3.Political Context and Coalitions: The political landscape

significantly impacts welfare state retrenchment. Changes in political
coalitions, party strategies, and voter preferences play crucial roles. For
example, left-wing parties with a positive welfare image are often punished
electorally for implementing retrenchment policies, while right-wing parties
might face less backlash due to their traditional stance against expansive
welfare states. Additionally, coalition governments can diffuse electoral
risks associated with retrenchment by spreading accountability among
multiple parties.

4.Post-War Political Changes: The post-war landscape has

undergone significant transformations such as de-pillarization and
fragmentation of political parties. These changes have altered the nature of
government coalitions and the strategies they employ regarding welfare
policies. As a result, the political sociology of welfare state retrenchment
The concept of welfare state retrenchment refers to the reduction in the has evolved to reflect these new dynamics.
scope, generosity, or conditionality of welfare benefits, such as pensions,
unemployment benefits, and healthcare. The extent and nature of Overall, the degree of welfare state retrenchment is not uniform and
retrenchment can vary significantly depending on several factors: depends on a complex interplay of institutional arrangements,
measurement approaches, political strategies, and historical contexts.
1.Type of Welfare State Arrangement: Different welfare state
models (e.g., Bismarckian, Beveridgean) have distinct structures and
funding mechanisms that influence how retrenchment occurs. For instance,
Bismarckian systems, characterised by contributions from employers and
employees, might face different pressures compared to tax-funded
Beveridgean systems.

106
107
(Use data set for Critical policy review)

Increasing elderly bias in social insurance entitlements – pension program

characteristics have tended to become increasingly generous to retirees,
but cuts are applied to future work years.

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 often face significant electoral punishment due to their historical
commitment to the welfare state. This is because their supporters expect
them to uphold welfare benefits, making any cuts seem like a betrayal.

2.Blame Avoidance vs. Credit Claiming:

Blame Avoidance: Most political parties attempt to avoid blame for

unpopular policies like welfare cuts by obfuscating the retrenchment or
spreading responsibility across coalition partners.

Credit Claiming: Some parties, particularly those with a negative welfare

image (e.g., liberal and conservative parties), may claim credit for
retrenchment by framing it as necessary economic reform. This can
sometimes lead to electoral gains if voters perceive these actions as
aligning with broader economic goals.

3.Old vs. New Politics:

The shift from “old” class-based politics to “new” politics involves adapting
strategies that consider the changing political landscape and voter
The concept of welfare state retrenchment as credit claiming involves
expectations. While class politics still matter, the approach has evolved,
political parties using policy cutbacks to gain electoral advantage, rather
with some parties successfully navigating retrenchment without severe
than merely avoiding blame. This strategy varies based on the party’s
electoral consequences by aligning their policies with perceived voter
ideological stance and historical relationship with the welfare state.
interests.
Key Points on Retrenchment and Electoral Dynamics
Overall, the success of using retrenchment as a credit-claiming strategy
1.Political Party Influence: depends on the party’s ability to align its actions with voter expectations
and manage the narrative around necessary economic reforms versus
Right-wing Parties: These parties, often associated with conservative or maintaining social protections.
centrist ideologies, are more likely to engage in welfare state retrenchment.
Studies by Korpi and Palme (2003) and Allan and Scruggs (2004) indicate
that right-leaning governments have historically implemented more cuts.
This is partly because their voter base may support reduced government
spending and welfare cutbacks.

Left-wing Parties: Traditionally, left-wing parties aim to maintain or expand

welfare provisions. However, when they do engage in retrenchment, they

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Sea-change below the waterline Why Change is Difficult

The path-dependent interplay between labour market institutions and Path dependency highlights why institutional change is often slow and
welfare state institutions challenging. Existing policies create vested interests and expectations
among stakeholders, making significant shifts politically and economically
costly. For example, in pension reforms, transitioning from a pay-as-you-go
(PAYG) system to funded pensions presents the “double payment
problem,” where current workers must fund both existing retirees’ pensions
and their future pensions simultaneously. This creates resistance to change
due to the immediate financial burden it imposes.

Examples of Path Dependency

A classic example of path dependency is seen in pension systems. Many

countries initially adopted PAYG systems where current workers’
contributions fund current retirees. Over time, as demographic changes
increase the ratio of retirees to workers, these systems become financially
strained. However, shifting to a funded system requires current workers to
contribute both to their own future pensions and to existing retirees,
creating significant financial challenges and resistance.

Implications for Social Policy

Path Dependency in Social Policy Understanding path dependency is crucial for policymakers aiming to
reform social policies. It suggests that successful reform requires careful
Path dependency is a concept that describes how the historical consideration of existing institutional frameworks and the interests they
development of institutions and policies shapes their future trajectories. In have created. Incremental changes that build on existing structures may be
the context of social policy, it suggests that existing institutional more feasible than radical overhauls. Additionally, addressing path
arrangements, such as welfare states, social insurance models, labour dependency involves not only technical adjustments but also managing
markets, and pension systems, heavily influence the direction and political and societal expectations.
feasibility of future reforms. This is because once certain policies are
established, they create a set of expectations and dependencies that make Path dependency: you organised the structure already now it is difficult to
alternative policy choices less likely or even impossible due to constraints change.
like cost or political feasibility. This can lead to a “lock-in” effect where
change becomes difficult.

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 CMEs, such as those found in Germany and other parts of Europe, tend to
have more coordinated labour markets with stronger regulations and
greater involvement of unions in wage-setting processes.

Flexibility in Labour Markets

Labour market flexibility is often seen as a response to globalisation

pressures. This flexibility can manifest in several forms:

Functional Flexibility: Refers to the ability of workers to perform a variety of

tasks.

Wage Flexibility: Involves adjustments in wages to respond to changes in

supply and demand.

Numerical Flexibility: Includes strategies like reducing the core workforce

with permanent contracts while increasing the use of temporary or part-
time workers.

Temporal Flexibility: Concerns about adjustments in working hours and

Understanding Labour Market Institutions schedules, such as night work or zero-hour contracts.

Labour market institutions are mechanisms that influence the dynamics of Impact of Globalization
wage and employment determination. These institutions can be policy Globalisation has exerted significant pressure on labour markets, pushing
interventions or collective organisations, such as labour unions, for increased flexibility to remain competitive. This has led to changes in
employment protection legislation, minimum wage laws, unemployment labour market institutions to accommodate new economic realities. For
insurance, and active labour market policies. They play a crucial role in example, there has been a trend towards more flexible labour contracts
shaping labour market outcomes by providing frameworks within which and a reduction in the security traditionally associated with permanent
employment relationships are regulated. employment.
Types of Labour Markets: LME vs. CME In summary, labour market institutions are pivotal in shaping how labour
Labour markets can be broadly categorised into two types: Liberal Market markets operate by balancing the needs for protection against exploitation
Economies (LMEs) and Coordinated Market Economies (CMEs). LMEs, and the demands for flexibility driven by global economic forces.
like those in the United States, generally feature more flexible labour Understanding these institutions helps explain variations in employment
markets with less regulation, allowing for easier hiring and firing practices. practices across different countries and regions.

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 High Employment: The flexibility of the labour market often results in higher
employment levels as businesses can adapt quickly to economic changes.

High Inequality: The trade-off for high employment is significant wage and
income inequality, as low-skilled workers face lower wages and fewer
protections.

Europe (Coordinated Market Economies - CMEs)

More Regulated Labor Market & Corporatist Consultation: European

countries typically have more regulated labour markets with strong
involvement of unions in wage-setting processes and corporatist
consultation mechanisms.

Higher Minimum Wages: These countries often enforce higher minimum

Jobs-Inequality Trade-Off: US/UK vs. Europe: The “jobs-inequality wages, which help maintain a standard of living for low-skilled workers.
trade-off,” as described by DiPrete et al. (2006), refers to the different More Generous Protection: Social protections are more generous,
approaches taken by Liberal Market Economies (LMEs) like the US and providing a robust safety net for workers through unemployment benefits
UK, compared to Coordinated Market Economies (CMEs) in Europe, in and other social transfers.
balancing employment levels and wage inequality.
Consequences:
US/UK (Liberal Market Economies - LMEs)
Low Inequality: The strong regulatory framework and social protections
Less Protection of Labor: In countries like the US and the UK, labour result in lower wage and income inequality.
markets are characterised by minimal regulation. This results in a more
flexible labour market where employers can hire and fire workers with High Unemployment: However, these protections can lead to higher
relative ease. unemployment rates as rigid labour markets may not adapt quickly to
economic changes, reducing employer demand for low-skilled labour.
Lower/No Minimum Wage: The absence or reduction of minimum wage
laws contributes to lower wages for low-skilled workers, exacerbating Implications
income inequality.
The “jobs-inequality trade-off” highlights the divergent paths taken by LMEs
Low Benefits/Transfers: Social safety nets are less comprehensive, and CMEs. While LMEs prioritise employment flexibility at the cost of
providing fewer benefits and transfers to support low-income individuals. greater inequality, CMEs focus on reducing inequality at the expense of
higher unemployment. This trade-off reflects broader institutional
Consequences: preferences and responses to macroeconomic shocks across different

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regions. Understanding these dynamics is crucial for policymakers aiming
to balance economic growth with social equity.

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 workers in European countries, where labour market institutions have
traditionally provided more protection but are now undergoing significant
changes.

Generalised Inequality and Returns to Skill

Generalised Inequality: This term refers to the widening gap not only in
wages but also in job security and career opportunities. The focus shifts
from just income disparities to include the stability and quality of
employment.

Generalised Returns to Skill: Both sides of the Atlantic have seen an

increase in the returns to skill, meaning that individuals with higher skills
tend to benefit more significantly in terms of both wages and job security
compared to their lower-skilled counterparts.

Changes in European Labor Market Institutions

European labour markets have historically been characterised by strong

regulations and protections aimed at reducing inequality. However, these
institutions are evolving:
From Jobs-Inequality Trade-Off to Generalized Inequality
Regulatory Changes: There has been a shift towards more flexible labour
The concept of the “jobs-inequality trade-off,” as articulated by DiPrete et market arrangements, which can lead to increased job insecurity for certain
al. (2006), initially focused on the balance between employment levels and groups of workers, particularly those with lower skills.
wage inequality in different economic systems, particularly contrasting the
US/UK with European countries. However, a critique of this model suggests Impact on Low-Skilled Workers: As labour market flexibility increases, low-
that it is necessary to look beyond wages and earnings to understand the skilled workers face greater risks of precarious employment conditions,
broader implications of inequality, especially in terms of job and leading to a broader form of inequality that encompasses more than just
employment insecurity. wage disparities.

Critique: Beyond Wages and Earnings In summary, while the traditional jobs-inequality trade-off focused on
balancing employment levels with wage inequality, the concept of
The critique emphasises that rising inequality is not only about disparities in generalised inequality broadens the scope to include various dimensions of
wages but also about differences in job security, employment relationships, job security and employment quality. This shift highlights the need for a
working conditions, and career prospects. This broader perspective reveals comprehensive understanding of how labour market changes affect
that inequality has become more generalised, affecting various aspects of
employment beyond just income. This is particularly evident for low-skilled
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different aspects of inequality across both liberal and coordinated market
economies.

115
 (Important slide)

Southern Europe: heavy social contributions stimulate informal

employment, which in turn erodes the tax base.

Demand for low-skilled labour depends mainly on low wages.

Social-democratic route: conflict between universalist principles and

growing heterogeneity of population structure: exodus of elites + limits have
been reached, so currently high unemployment.

Iversen/Wren trilemma because of cost of service-sector employment =>

countries must sacrifice full employment, fiscal balance, or equality. Neo-
liberal route: necessitates higher income maintenance transfers, decay of
private insurance and poverty traps. Like social security, private plans also
impose high fixed labour costs.

Labour reduction route: roots of this strategy lie in a combination of highly

developed social insurance and underdeveloped social services.

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Gender relations and fertility: see Mandel (2009) + Social Structure of
Western Societies.

Also has to do with centralisation of negotiation structures, e.g. wage

moderation agreements.

MBW: male breadwinner

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‘Dualization’ as explanatory framework for welfare state restructuring? Turning Vice into Vice: Understanding the Title

The phrase “Turning Vice into Vice,” as used by Bruno Palier, critiques how
welfare state reforms have transformed one set of problems into another.
Initially, the unsustainability of traditional welfare models, particularly
Bismarckian systems, was a pressing concern. These systems were seen
as rigid and unable to adapt to economic changes such as globalisation
and demographic shifts. In response, reforms aimed at sustainability
inadvertently led to dualisation, where protections for insiders were
maintained or even enhanced at the expense of growing numbers of
outsiders.

From Unsustainability to Dualization

Unsustainability: The traditional Bismarckian welfare states faced

challenges due to economic pressures like globalisation, increased
competition, and demographic changes such as ageing populations. These
pressures made existing welfare models economically unsustainable
because they relied heavily on social insurance contributions from stable,
full-time employment, which was declining.
TE: Labour market changes and globalisation place on conservative
corporatist welfare states, particularly those reliant on social insurance, like Dualisation: As reforms were implemented to address these
the Netherlands, Belgium, and Germany. These systems operate on the unsustainability issues, they often resulted in dualised labour markets and
principle of equity: individuals contribute through work and receive welfare systems. This means that while core workers (insiders) retained
earnings-related benefits during social risks, such as unemployment or strong protections and benefits, peripheral workers (outsiders) faced
early retirement. However, shifts like early retirement, flexible labour increasing job insecurity and limited access to social benefits. This shift has
markets, and increased periods of unemployment have intensified the led to what is termed a “secondary world of welfare,” where a significant
financial burden on social insurance funds. To manage this, governments portion of the workforce experiences precarious employment conditions
have had to increase contributions, making these systems expensive and with minimal welfare support.
unattractive to multinational corporations. Some social insurance funds
Feedback Loop Between Labor Market Dualization and Welfare Provision
even risked insolvency. As a response, stricter conditions for accessing
benefits were introduced, leading to "welfare conditionality." This situation The dualisation of labour markets feeds back into the dualisation of welfare
aligns with Bruno Palier's concept of "Turning Vice into Vice," where the provision. As labour markets become more stratified, with a clear division
pressures to adapt to labour market changes and globalisation amplify the between secure and insecure jobs, welfare systems also adapt by
challenges in maintaining equitable welfare systems. providing less comprehensive support to those in precarious positions. This
creates a cycle where those most in need of support receive the least. The
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result is a growing disparity in social protection between different segments
of the workforce.

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 atypical employment. In response, welfare states have shifted towards
dualisation:

Integration into Social Assistance: Long-term unemployment benefits have

increasingly been integrated into social assistance schemes. This shift
reflects the inability of traditional social insurance systems to cover those
with discontinuous work histories or those engaged in non-standard forms
Integration of benefit of long-term unemployment into social assistance. of employment.
Integration of Long-term Unemployment Benefits into Social Assistance: Impact on Outsiders: This integration often leaves outsiders with minimal
Insiders vs. Outsiders support compared to the comprehensive benefits available to insiders. As a
The restructuring of welfare states, particularly in Continental Europe, has result, a “secondary world of welfare” has developed, characterised by less
led to significant changes in how benefits are distributed, reflecting a secure and more conditional forms of support.
broader trend of dualisation. This process has resulted in a division Feedback Loop Between Labor Market and Welfare Dualization
between “insiders,” who enjoy stable employment and comprehensive
social insurance benefits, and “outsiders,” who often face precarious The dualisation of labour markets feeds back into the dualisation of welfare
employment and rely on less generous social assistance. provision. As more workers find themselves in flexible or precarious jobs,
they become part of this secondary welfare system. This creates a cycle
Old Social Insurance vs. Secondary World of Welfare where those most in need receive the least support, exacerbating social
Old Social Insurance: Traditionally, welfare systems in Europe were built inequality.
around Bismarckian principles, providing benefits based on employment In summary, the integration of long-term unemployment benefits into social
history and contributions. This system primarily benefits insiders with assistance highlights the growing divide between insiders and outsiders
stable, long-term employment. within modern welfare states. This dualisation reflects broader changes in
Emergence of a Secondary World: As labour markets have become more labour market policies and welfare state structures, emphasising cost
flexible and precarious work has increased, a secondary system of welfare containment and flexibility over universal coverage.
has emerged. This system provides “social-assistance type” benefits, which
are often means-tested and less generous than traditional social insurance.
These benefits are increasingly relied upon by outsiders, who may not
qualify for contributory benefits due to irregular or insufficient employment
histories.

Unsustainability Leading to Dualization

The traditional welfare state model became unsustainable due to economic

pressures such as globalisation, demographic changes, and the rise of
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 market policies aimed at making work more attractive than welfare
dependency.

2.Top-Up, Means-Tested Child Allowances

These allowances provide additional financial support to low-income

households with children. The approach is described as “targeting within
universalism,” meaning that while child benefits are universally available,
additional support is targeted at those most in need, ensuring that low-
income families receive extra help.

3.Increases in Minimum Income Protection (MIP) for the Elderly

Some European countries have enhanced minimum income protection for

elderly individuals, particularly those with incomplete labour market careers
or who have experienced a divorce. This measure aims to prevent poverty
among older adults who may not have sufficient pension entitlements due
to irregular work histories.

Challenges and Consequences

Examples of Social Assistance-Type Benefits Across Europe
Increased Poverty Rates for Working-Age Families: Despite these
The restructuring of welfare states in Europe has led to the development of measures, there has been a rise in poverty rates among working-age
various “social assistance-type” benefits aimed at addressing the needs of families in some regions, as evidenced by increased reliance on food
different population groups, particularly those who are considered banks. This suggests that while social assistance-type benefits provide
“outsiders” in the labour market. These benefits are part of broader welfare some relief, they may not fully address the economic challenges faced by
state calibration efforts to adapt to changing economic and social all vulnerable groups.
conditions.
Increased Selectivity and Conditionality: Many social assistance programs
Forms of Welfare State Calibration have become more selective and conditional, focusing on those deemed
1.In-Work Tax Credits for the Working Poor most in need. This shift reflects a broader trend towards targeting
resources more efficiently but also raises concerns about the adequacy
Originating in the UK, in-work tax credits have been adopted across and accessibility of support for all who require it.
Europe as a means to support low-income workers. These credits are
designed to supplement the earnings of the working poor, thereby reducing These examples illustrate how European welfare states are recalibrating
poverty and encouraging employment. They are part of active labour their social assistance systems to better meet the needs of diverse
populations while also grappling with economic constraints and rising

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inequality. The focus on targeted support reflects an effort to balance
universal welfare principles with fiscal sustainability and effectiveness in
addressing poverty and social exclusion.

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Goedemé & Marchal (2016): MIP elderly 1.Comparative Levels of MIP: The figure probably compares the
minimum income protection available to elderly people in different
European countries. This would include both contributory pensions and
non-contributory social assistance benefits designed to ensure a basic
standard of living for those with incomplete work histories or insufficient
pension entitlements.

2.Variation Across Countries: The figure likely shows significant variation

in the generosity of MIP schemes across Europe. Some countries may
offer relatively high levels of protection, ensuring that even those with
limited contributions receive adequate support, while others may provide
minimal assistance, resulting in higher poverty risks among the elderly.

3.Impact of Dualization: The emergence of dualization in welfare systems

could be reflected in the figure, highlighting how some countries have
developed more pronounced divisions between those with full pension
entitlements (insiders) and those reliant on social assistance (outsiders).
This dualization can lead to disparities in income security among the
elderly.

Policy Calibration: The differences shown in MIP levels suggest varying

approaches to welfare state calibration. Countries with higher MIP levels
may prioritize social equity and poverty prevention, while those with lower
levels might focus on cost containment and incentivizing private savings.

Social Assistance Integration: The integration of long-term unemployment

benefits into social assistance reflects a broader trend towards means-
tested support systems, which can affect elderly individuals who have had
disrupted careers or insufficient contributions.

Poverty Risks: Despite efforts to improve MIP, increased poverty rates

among certain groups, such as working-age families, indicate ongoing
TN: Limited financial impact – cheap way of credit claiming, or way to challenges in balancing welfare provision with economic constraints. The
obfuscate retrenchement in pension insurance. Justify future benefit cuts figure might underscore the need for more comprehensive policies to
by presenting anti-poverty strategies at same time. address these issues.
Interpretation of Figure 3
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MIP for the population of working age… (Noel, 2020) Trends and Analysis: The document suggests that while social
investment strategies have been prominent, they have not necessarily
come at the expense of MIP. The study found little evidence supporting a
trade-off between social investments (like active labor market policies and
childcare services) and the adequacy of MIP.

Social Investment vs. Traditional Welfare: Social investment strategies

focus on enhancing human capital and facilitating labor market transitions,
aiming to prepare individuals for economic participation. Critics argue that
these strategies might neglect traditional welfare needs, such as direct
income support for those unable to participate in the labor market.

Political and Economic Influences: The adequacy of MIP is influenced

by various factors, including political ideologies, economic conditions, and
institutional frameworks. For instance, countries with strong social
democratic traditions may maintain higher levels of MIP adequacy due to a
commitment to comprehensive welfare policies.

Implications for Policy: Understanding the balance between social

investment and MIP is crucial for policymakers aiming to address poverty
while promoting economic growth. Ensuring adequate income protection
remains essential for those unable to benefit directly from employment-
focused policies.
Interpretation of Minimum Income Protection (MIP) for the Working-Age Overall, the study highlights that while social investments are crucial for
Population long-term economic stability and growth, maintaining adequate minimum
income protection is vital for supporting vulnerable populations who may
Minimum Income Protection (MIP) refers to the income level that a
not immediately benefit from such investments.
government guarantees to individuals who have no market income,
insurance income, or significant assets. It typically includes social
assistance benefits and associated transfers, representing the last safety
net for the working-age poor.

Adequacy Measurement: The adequacy of MIP is measured by

comparing the minimum income benefits to a country’s median income,
providing an indicator of how well these benefits support low-income
households relative to the average living standards in each country.
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 The Social-democratic regime shows the lowest selectivity, maintaining a
relatively stable rate around 5-7% throughout the period. This reflects a
broader universal approach to social benefits rather than focusing on
means-testing.

Interpretation:

•Liberal Welfare States: These states prioritize targeting benefits

through means-testing, reflecting a more market-oriented approach.

•Conservative-Corporatist and Southern-European States: These

regimes balance between universal benefits and targeted assistance,
showing moderate selectivity.

•Social-Democratic States: Known for their universal welfare

systems, these states focus less on means-testing, emphasizing broad
access to social benefits.

Overall, the data highlights varying approaches to social welfare across

The figures illustrate the selectivity of social spending on means-tested different regimes, with Liberal states leading in selectivity and Social-
benefits as a percentage of total benefits (excluding pensions) from 1995 to democratic states focusing on inclusivity.
2015 across four welfare regimes: Conservative-corporatist, Liberal,
Southern-European, and Social-democratic.

1.Liberal Regime:

The Liberal regime consistently shows the highest selectivity, starting at

around 30% in 1995, decreasing to about 22% in the early 2000s, and then
increasing again to approximately 34% by 2014. This indicates a strong
emphasis on means-testing within this regime.

2.Conservative-Corporatist and Southern-European Regimes:

Both regimes exhibit similar trends with moderate selectivity levels. They
start around 10-12% in 1995 and gradually increase to about 15% by 2015.
This suggests a steady but less pronounced focus on means-tested
benefits compared to the Liberal regime.

3.Social-Democratic Regime:
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126
 are increasingly restricted to a smaller group of labour market insiders. This
reflects a narrowing of benefits to those with stable employment histories,
leaving many without adequate support.

2.Neo-Conservative/Neo-Corporatist Welfare States: The dualization

process is particularly evident in neo-conservative or neo-corporatist
welfare states, where the underlying processes contribute to growing
inequality across all types of welfare states. This trend explains increased
poverty risks due to the exclusion of outsiders from comprehensive social
protection.

3.Dualization Debate: The debate around dualization, as discussed by

scholars like Busemeyer and Kemmerling, focuses on the “drift” towards
dualization driven by insider power. It emphasizes that the group of
outsiders is heterogeneous, encompassing various demographics such as
temporary workers, part-timers, and those in non-standard employment.

4.Theoretical Hypothesis and Empirical Testing: While dualization is a

theoretical hypothesis based on macro-level trends, it requires more
empirical testing at lower levels of analysis. The outcome is not necessarily
(TN: CC: negotations at the expense of outsiders. Social insurance is no
dualization at the micro-level or increased poverty because labor market
longer quasi-universal: from income maintenance to poverty prevention.
stratification involves multiple cleavages beyond just the insider-outsider
Growing group of outsiders – pro-welfare alliances between different divide.
groups in favour of activating and redistributive social policy, multiple
Implications for Future Research
dualizations might not overlap. High-educated outsiders are more politically
active and effective.) Complexity of Labor Market Stratification: Labor market stratification is
multifaceted, involving various socio-economic cleavages that interact in
The concept of “dualization” provides a framework for understanding the
complex ways. This complexity suggests that while dualization is a
evolving dynamics of welfare state restructuring, particularly in the context
significant trend, it may not uniformly lead to increased poverty or inequality
of labour market and social policy changes. It highlights the increasing
at all levels.
divide between “insiders,” who enjoy stable employment and
comprehensive benefits, and “outsiders,” who face precarious work Potential for Policy Innovation: Understanding dualization can inform new
conditions and limited access to welfare benefits. research agendas focused on developing policies that address the needs
of both insiders and outsiders. This includes exploring ways to integrate
1.Horizontal Redistribution and Insiders: Social insurance systems,
more inclusive social protection measures that bridge the gap between
traditionally designed to provide horizontal redistribution among workers,
these groups.
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 2.Independent Variable: Degree of Outsiderness: The “degree of
outsiderness” is used as an independent variable to assess how different
levels of labour market risk affect individuals’ preferences for social
policies. This complex construction considers risks at the level of
respondents’ occupational groups, acknowledging that not all outsiders
face the same challenges or have the same needs.

3.Dependent Variable: Preferences for Redistributive Principles: The

study examines preferences for different redistributive principles, including
universalist redistribution, activation/job creation policies, and social
insurance. These preferences are shaped by individuals’ labour market
positions and perceived risks.

4.Argumentation Throughout the Article:

Labor Market Vulnerability: The article argues that labour market

vulnerability now affects large segments of the high-educated population,
particularly young people and women.

Impact on Outcomes: Higher levels of outsiderness correlate with

The concept of “dualisation” describes the increasing divide between disadvantaged labour markets outcomes such as income insecurity and
labour market insiders, who enjoy stable employment and comprehensive lower job satisfaction.
benefits, and outsiders, who face precarious work conditions and limited
Influence on Social Policy Preferences: The degree of outsiderness
access to welfare benefits. In this context, the potential for cross-class
significantly impacts social policy preferences, especially among the highly
alliances emerges as a significant factor in shaping welfare state
educated. Those facing greater risks are more likely to support
preferences and policies, particularly as the group of outsiders grows.
redistributive and activating policies.
1.High-Educated Outsiders as a Cross-Pressured Group: High-
Implications for Cross-Class Alliances
educated individuals who find themselves in precarious labour market
positions are considered a “cross-pressured group.” Despite their high level Potential Alliances: The findings suggest a potential for cross-class
of human capital, they may experience job insecurity and income instability, alliances between high-skilled and low-skilled vulnerable individuals. Both
which influences their welfare state preferences. This group is torn groups may support a more redistributive and activating welfare state that
between their potential to succeed in the market and their current addresses their shared vulnerabilities.
vulnerable status.
Research Agenda: The study highlights the need for further empirical
research to test these hypotheses at micro-levels of analysis. It questions

128
whether dualisation necessarily leads to increased poverty or if cross-class
alliances could mitigate some negative effects by influencing policy
changes.

129
 2.Outsiderness vs. Education: The analysis in Table 4 likely shows that
the degree of “outsiderness” (i.e., the extent to which individuals
experience labour market vulnerability) has a more substantial impact on
welfare state preferences than education level alone. This suggests that
high-educated individuals who are vulnerable in the labour market are
particularly responsive to these vulnerabilities when forming their
preferences for social policies.

3.Dependent Variable: Preferences for Redistributive Principles: The table

likely examines preferences for different redistributive principles such as
universalist redistribution, activation/job creation policies, and social
insurance. High-educated outsiders may show stronger support for
redistributive and activation policies due to their precarious employment
situations.

Key Findings

Labor Market Vulnerability: The study finds that labour market vulnerability
significantly affects social policy preferences, especially among high-
educated individuals. These individuals are more likely to support
Interpreting Table 4: Determinants of Welfare State Preferences
redistributive policies and activation measures that could improve their
In the study by Hausermann, Kurer, and Schwander (2015), Table 4 likely employment prospects.
presents an analysis of how different factors influence individuals’
Impact of Education: While education typically correlates with a preference
preferences for various welfare state policies. The focus is on
for less state intervention (due to higher earning potential), the presence of
understanding how labour market vulnerability and education level affect
labour market vulnerability among high-educated individuals shifts this
these preferences, particularly among high-educated outsiders.
preference towards more supportive welfare policies.
High-Educated Outsiders as a Cross-Pressured Group
Implications
1.Cross-Pressured Nature: High-educated outsiders are described as
The findings highlight the potential for cross-class alliances between high-
“cross-pressured” because they possess high human capital, which
skilled and low-skilled vulnerable individuals in support of redistributive and
theoretically should provide them with strong labour market advantages.
activating welfare state policies. This suggests that as labour market
However, due to precarious employment conditions, they face significant
vulnerabilities spread across different educational groups, there is an
labour market vulnerabilities that influence their social policy preferences.
increasing likelihood of political mobilisation around shared economic
insecurities, potentially influencing future welfare state reforms.

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Seminar 7 - Restructuring, recalibration, and redistribution

Social investment for ‘new social risks’ as new policy paradigm

Efforts to generalize the social-democratic response across

European Union member states have faced mixed results. While New Social Risks (NSRs)
some countries have successfully integrated elements of flexicurity NSRs arise from socio-economic transformations in post-industrial
into their welfare systems, others have struggled due to fiscal societies, such as changes in labour markets and family structures. These
constraints or differing political priorities. The Nordic countries remain risks primarily affect groups like women, young people, and low-skilled
leaders in implementing comprehensive social investment strategies. workers. Key NSRs include:

In summary, while social investment represents a forward-looking •Reconciling work and family life: The shift from traditional male
approach to welfare reform, its success depends on balancing active breadwinner models to dual-earner households has created challenges in
policies with adequate income protection and addressing inherent balancing work and caregiving responsibilities.
inequalities in access to resources. •Single parenthood: Single parents face heightened risks due to limited
income and childcare support.

•Long-term unemployment: Structural changes in labor markets have

increased unemployment duration for certain groups.
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•Low or obsolete skills: Workers with outdated or insufficient skills are more consistently reduced poverty rates, especially for those unable to
vulnerable to job insecurity or poverty. participate in the labor market.

•Lack of social security protection (welfare gaps): Many individuals in non- Link to the European Employment Strategy
standard employment or with atypical career paths lack adequate social
The European Employment Strategy emphasizes “work, work, work,”
security coverage.
reflecting a policy paradigm that ties decommodification (reducing reliance
Social Investment Policies on markets) to commodification (increasing labor market participation). This
EU-driven approach promotes policy transfer across member states but
Social investment policies aim to prepare individuals for economic
faces challenges due to differing national contexts:
participation rather than merely providing passive income support. Key
measures include: - Policy transfer can be “tricky” because countries vary significantly in
their welfare traditions, institutional capacities, and socio-economic
•Active labor market policies (ALMPs): These focus on training, job
conditions.
placement, and employment incentives to integrate people into the
- The strategy prioritises activation measures over passive income
workforce.
support, aligning with the broader goals of increasing employment
•Life-long learning: Continuous skill development is emphasized to keep rates and ensuring fiscal sustainability.
pace with changing labor market demands.
In summary, addressing NSRs through social investment policies
•Childcare and early childhood investments: High-quality childcare services represents a shift towards proactive welfare strategies. However, these
not only support parental employment but also enhance children’s cognitive policies must overcome issues of inequality in access, implementation
development, breaking intergenerational cycles of disadvantage. challenges, and potential trade-offs with traditional welfare provisions.

Challenges of Social Investment Protective/passive social spending vs. Productive/active social

spending
1. Matthew Effect: Social investment policies often disproportionately
benefit middle- and higher-income groups due to better access to emphasizing the shift in welfare state priorities toward productive
resources like childcare and education, potentially exacerbating investments that enhance labor market participation and human capital.
inequalities.
Protective/Passive Social Spending: These are traditional welfare
2. Implementation Gaps: Many countries struggle to fully implement these measures aimed at providing income support and mitigating immediate
policies due to fiscal constraints or political trade-offs between social social risks. Examples include unemployment benefits, pensions, and other
investment and traditional income support programs. forms of cash transfers that act as safety nets but do not actively promote
labor market engagement or skill development.
3. Limited Poverty Reduction: Despite their focus on activation and
human capital development, social investment policies have not Productive/Active Social Spending: This focuses on long-term investments
to enhance individuals’ skills and capacities, enabling them to participate in

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the labor market and reduce dependency on welfare. Examples include
active labor market policies (ALMPs), life-long learning initiatives, childcare
services, and early childhood education.

To achieve returns on social investments, two key conditions must be

met:
1.Substantial Early Investment: A significant amount of
funding needs to be allocated at the outset. This is particularly true
for areas like early childhood education, childcare, and active labor
market policies, which aim to build human capital and address
inequalities early in life. Early interventions are seen as cost-effective Poverty rates are averaged across the following countries: Austria,
in the long term because they reduce the likelihood of individuals Belgium, Germany, Denmark, Finland, France, Ireland, Luxembourg,
facing persistent social risks later in life, such as unemployment or Netherlands, Norway, Sweden and the United Kingdom – the
poverty. ‘classical’ liberal, conservative-corporatist and social-
2.Consistency and Comprehensiveness: Investments must democratic welfare states. The averaged trends do not deviate
be sustained over time and implemented in a holistic manner. much from the trends for individual countries. Own calculations
Fragmented or inconsistent spending can undermine the based on EU-SILC.
effectiveness of social investment policies. For instance, childcare
services or lifelong learning programs require stable funding and
universal accessibility to ensure equitable benefits across different
socioeconomic groups.
The Paradox of the Social Investment State: ‘Disappointing poverty
trends’

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 1. Political Economy: Dualization Drift and Insider Power
Dualization refers to the growing divide between labor market
“insiders” (those with stable, well-protected jobs) and “outsiders”
(those in precarious, low-paid, or non-standard employment).
Insiders often have stronger political representation and influence,
leading to policies that protect their interests while neglecting
outsiders. This creates structural inequalities in labor markets and
welfare systems.
Outsiders face weaker social protections and higher poverty risks
due to limited access to benefits like unemployment insurance or
pensions, exacerbating poverty among vulnerable working-age
groups.

134
2. Social Policy Literature: Incomplete Social Investment policies. These dynamics highlight the need for more comprehensive
and equitable welfare strategies.
The shift toward social investment policies (e.g., active labor market
programs, childcare, lifelong learning) has not fully compensated for
the retrenchment of traditional welfare provisions. Critics argue that
these policies are often implemented partially or inconsistently,
leaving gaps in social protection.
For instance, while social investment aims to enhance employability
and human capital, it may fail to address immediate income needs or
provide adequate safety nets for those unable to work.
3. Perverse Outcomes of Social Investment
Matthew Effect: Social investment policies often disproportionately
benefit middle- and higher-income groups who are better positioned
to access services like childcare or training programs. This can
exacerbate inequality rather than reduce it.
Trade-Off with Pro-Poor Spending: Social investment may divert
resources away from traditional income support measures that
directly benefit the poor. For example, increased spending on
activation policies might come at the expense of minimum income
protection or unemployment benefits.
Social investment policies designed to address NSRs (e.g.,
Focus on Activation: Over-reliance on activation policies prioritizes
childcare, active labor market policies) are often small in scale,
employment outcomes over poverty reduction. This “workfarist”
fragmented, and targeted at specific groups, such as women, young
approach may neglect the quality of jobs or fail to support those
people, and low-skilled workers.
unable to participate in the labor market effectively.
These policies have not fully compensated for the retrenchment of
In summary, rising poverty rates among working-age individuals
traditional welfare provisions, leading to incomplete or partial social
stem from structural labor market inequalities (dualization),
investment strategies.
insufficient compensation for welfare retrenchment through social
investment, and unintended regressive effects of social investment Why Are These Policies Limited?

135
1.Limited Mobilizing Capacity of NSR Groups:
•The groups most affected by NSRs (e.g., young people, women,
low-skilled workers) lack strong political representation and
mobilizing power. Unlike industrial workers in the past, these groups
are heterogeneous and less organized.
•Factors like lower voter turnout among younger demographics and
weaker representation in democratic institutions further reduce their
influence on policymaking.
2.Dependence on Political Exchange and Blame Avoidance:
•In many cases, the adoption of social investment policies depends
on political exchange or package deals, where their implementation
is tied to other policy objectives that align with the interests of more
powerful actors (e.g., employers or middle-class voters).
•Politicians may also use blame avoidance tactics to minimize
backlash from retrenching traditional welfare programs while
introducing new policies.
3.Modernizing Compromise: In Conservative-Corporatist countries,
social investment policies often emerge as part of a “modernizing
compromise.” This involves balancing affordability with political
claims from post-socialist parties or aligning with employer interests.
The expansion of productive spending under the social investment
paradigm has not fully compensated for cuts in passive spending.
This partial implementation creates significant challenges for
addressing poverty and inequality effectively. To achieve more
equitable outcomes, policymakers need to balance investments in
human capital with robust income protection measures that provide
immediate support for vulnerable populations.

136
 the retrenchment of traditional welfare provisions like unemployment
benefits or minimum income protection.
The groups most in need of support, such as those facing long-term
unemployment or low skills, frequently lack access to these
programs due to limited resources or eligibility barriers. As a result,
social investment has not effectively reduced poverty rates among
working-age populations.
4.Perverse Outcomes of Social Investment
Matthew Effect: Social investment policies often disproportionately
benefit middle- and higher-income groups who are better positioned
to access services like childcare or training programs. This
1. Political Economy: Dualization Drift and Insider Power
unintended consequence exacerbates inequalities rather than
Dualization refers to the growing divide between “insiders” (workers reducing them.
with stable, well-protected jobs) and “outsiders” (those in precarious,
Trade-Off with Pro-Poor Spending: The shift toward “productive”
low-paid, or non-standard employment). Outsiders, including women,
spending on activation measures may come at the expense of
young people, and low-skilled workers, face higher risks of poverty
“passive” spending like income support for the poorest. This trade-off
due to weaker job security and limited access to social protections.
leaves those unable to participate in the labor market—due to age,
Insider Power: Insiders often have stronger political representation disability, or other barriers—without adequate protection.
and influence over policies, which leads to welfare systems that
Focus on Activation: Overemphasis on labor market participation
prioritize their needs while neglecting outsiders. This structural
prioritizes employment outcomes over poverty reduction. This
inequality exacerbates poverty among vulnerable working-age
approach neglects the quality of jobs and fails to address structural
individuals.
issues that keep individuals in low-paid or insecure work.
2. Incomplete or Partial Social Investment
The rise in poverty among working-age individuals is driven by
Social investment strategies, such as active labor market policies structural labor market inequalities (dualization), insufficient
(ALMPs), childcare services, and lifelong learning initiatives, aim to compensation for welfare retrenchment through social investment
address new social risks (NSRs). However, these policies are often policies, and unintended regressive effects of these policies.
fragmented and insufficiently funded, failing to fully compensate for Addressing these challenges requires more comprehensive and

137
equitable welfare strategies that balance social investment with middle- and upper-income groups due to their better ability to access
robust income protection measures. and utilize these services.
For instance:
Childcare: Families with higher incomes are more likely to afford
childcare costs not covered by subsidies and to live in areas where
high-quality childcare is available. This results in higher enrollment
rates for their children, who then benefit from cognitive and non-
cognitive developmental advantages.
Higher Education: Children from higher-income families are
overrepresented in tertiary education due to better preparatory
schooling and financial resources. As a result, investments in higher
education disproportionately benefit these groups.
ALMPs: Even programs aimed at disadvantaged groups may
inadvertently exclude the most vulnerable (e.g., long-term
unemployed, migrants) due to eligibility requirements or labor market
selectivity.
2.Intersection with Class and Inequality:
The Matthew Effect interacts with existing class structures,
refers to the phenomenon where public spending on universal social reinforcing “increasing class differentials.” Higher SES groups
policies disproportionately benefits higher socioeconomic status leverage their political influence to shape policy designs that align
(SES) groups, thereby exacerbating inequality. with their interests.

Matthew Effect in Social Policy Without specific attention to the needs of lower-income groups,
universal policies risk widening inequalities rather than reducing
1.Disproportionate Benefits for Higher SES Groups: them.
Universal social policies, such as childcare services, higher Implications for Social Investment Policies
education, and active labor market policies (ALMPs), often favor
1.Unintended Consequences:

138
The Matthew Effect undermines the goal of social investment
strategies to reduce inequality and enhance opportunities for
disadvantaged groups. Instead of mitigating social risks, these
policies may exacerbate disparities if not carefully designed.
For example, childcare services intended to support labor market
participation may primarily benefit dual-earner households (e.g., the
“1.5 earner model” in the Netherlands), leaving single parents or low-
income families behind.
2. Policy Design Challenges:
To counteract the Matthew Effect, social investment policies must
incorporate targeted measures that ensure accessibility for lower-
income groups. Examples include means-tested subsidies for
childcare or outreach programs for disadvantaged individuals in
ALMPs.
3. Political Economy Dynamics:
The political sustainability of universal welfare states often relies on
broad-based support from middle- and upper-income groups. This
creates a tension between maintaining universal benefits (which can
exhibit Matthew Effects) and addressing the needs of the poorest.
Conclusion
The Matthew Effect highlights a critical challenge in social policy:
ensuring that universal programs do not inadvertently deepen
inequalities. Addressing this requires deliberate policy design that
prioritizes inclusivity and equity while balancing political support for
welfare systems.

139
140
 Characteristics: These regimes (e.g., Germany, France) emphasize
earnings-related benefits and family-based welfare provision. SI
efforts are often incomplete and fragmented.
SI policies include workfare measures and family policies but fail to
comprehensively address new social risks.
Dualization: A stark divide between labor market insiders (stable
jobs, strong protections) and outsiders (precarious jobs, limited
protections) persists.
Implications: Dualization exacerbates inequality and poverty among
working-age populations, particularly for outsiders such as low-
skilled workers and migrants.
3. Liberal Welfare States
Characteristics: Liberal regimes (e.g., the UK, the US) prioritize
1. Social-Democratic Welfare States minimal state intervention, means-tested benefits, and market
reliance.
Characteristics: These welfare states (e.g., Nordic countries) have
traditionally emphasized universalism, equality, and generous social SI policies are largely absent or underdeveloped.
protections. However, recent trends show: High levels of in-work poverty persist due to limited support for low-
A shift in Active Labor Market Policies (ALMPs) toward more income workers and weak labor market regulations.
“workfare-like” approaches, focusing on activation and labor market Implications: The lack of significant SI measures leaves many
integration. vulnerable groups without adequate protection or opportunities for
Shrinking social insurance rights, as eligibility conditions tighten and upward mobility.
benefits become less generous. 4. Southern European Countries
Implications: While SI remains relatively strong in these regimes, the Characteristics: These regimes (e.g., Italy, Spain) have historically
increasing focus on activation and reduced income protection may relied on family-based welfare systems with limited state
lead to growing inequalities among vulnerable groups. intervention. Recent developments include:
2. Conservative-Corporatist Welfare States
141
Some modernization of social protection systems to address “old ills” Conservative-corporatist regimes struggle with dualization and
like inadequate pensions or unemployment benefits. incomplete SI strategies.
Limited SI initiatives due to fiscal constraints and austerity measures. Liberal regimes largely lack SI measures, resulting in high in-work
poverty.
A trend toward refamilialization, where families are expected to fill
gaps left by the state. Southern European countries face limited modernization efforts amid
austerity-driven refamilialization.
Implications: The combination of weak SI policies and austerity
measures has limited progress in addressing poverty and inequality. Central and Eastern European countries exhibit minimal SI
development alongside rising informality.
5. Central and Eastern European Countries
These variations highlight how regime-specific institutional legacies
Characteristics: These countries (e.g., Poland, Romania) transitioned
shape the scope and effectiveness of social investment policies in
from socialist welfare systems to more market-oriented models post-
addressing poverty and inequality.
1990s. Key trends include:
Minimal implementation of SI policies.
Rising dualization in labor markets, with a growing divide between
formal and informal employment.
Increased reliance on informal networks and family support
(refamilialization) for the most disadvantaged groups.
Implications: Weak state interventions and high informality contribute
to persistent poverty and inequality.
Conclusion
The implementation of social investment policies varies significantly
across welfare state regimes:
Social-democratic regimes maintain relatively strong SI but face
challenges with activation-focused reforms.

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Policies that work? The intergenerational transmission of financial 3.Mediating Processes: Educational attainment, occupational status,
disadvantage and labor market outcomes mediate the relationship between
adolescent disadvantage and adult poverty.
4.Current Income Poverty Risk: The culmination of these processes
results in a higher likelihood of current income poverty for individuals
who experienced financial disadvantage in adolescence.
This model emphasizes that while structural factors like family
background and SES are critical, adolescent financial disadvantage
has an additive impact on poverty risk that persists even after
accounting for these mediators.

Figure 1: Conceptual Model

The conceptual model presented in Dewilde (2024) illustrates the
mechanisms underlying the intergenerational transmission of
financial disadvantage. It identifies the pathways through which
adolescent financial disadvantage impacts adult income poverty. Key
elements include: Figure 2: Current Income Poverty Risk by Adolescent Financial
Disadvantage
1.Parental Factors: Family structure, socio-economic status (SES),
and parental resources influence adolescent financial conditions. Figure 2 provides empirical evidence on the relationship between
adolescent financial disadvantage and current income poverty risk
2.Adolescent Financial Disadvantage: This refers to experiences of
(measured at the 70% median income threshold). Key findings
financial hardship during adolescence, which can have long-term
include:
consequences.

143
•Individuals who experienced financial disadvantage in adolescence underscores the role of comprehensive social policies in breaking
face significantly higher risks of income poverty in adulthood cycles of intergenerational poverty.
compared to those who did not.
•The disparity is particularly pronounced in countries with weaker
welfare systems or higher levels of labor market dualization.
•These risks are exacerbated for younger cohorts who came of age
during periods of globalization, labor market flexibilization, and
austerity-driven welfare reforms.
Key Insights
1.Impact of Welfare Systems:
Generous welfare systems with robust social protection and active
labor market policies (ALMPs) help mitigate the intergenerational
transmission of financial disadvantage.
In contrast, countries with selective welfare systems or high labor
market dualization see stronger persistence of financial
disadvantage across generations.
2.Policy Implications:
Investments in social policies such as childcare, education, and
ALMPs can reduce intergenerational inequalities but must be
accessible to disadvantaged groups to avoid exacerbating
inequalities (e.g., Matthew Effects).
Reductions in welfare spending that disproportionately affect
“outsider” households may worsen long-term poverty risks by
intensifying intergenerational transmission.
In summary, Dewilde’s research highlights the enduring impact of
adolescent financial disadvantage on adult poverty risks and
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 2.Generational Intensification: The gap in poverty risk between
those with and without adolescent financial disadvantage appears to
widen for younger cohorts. For cohorts coming of age during periods
of globalization, labor market flexibilization, and austerity (e.g., post-
1990s), the intergenerational transmission of financial disadvantage
seems to have intensified. This reflects the growing structural
inequalities in labor markets and welfare systems.
3.Context-Specific Variations: The degree of poverty risk varies
across countries and welfare regimes, influenced by factors such as
labor market dualization, welfare state generosity, and social
investment policies. Countries with more comprehensive social
protections and active labor market policies tend to mitigate the
poverty risks associated with adolescent financial disadvantage more
effectively.
Policy Implications
Dualization dynamics at work (?) - Figure 3 from Dewilde (2024)
illustrates how the predicted probabilities of experiencing income 1.Targeted Social Investment: Investments in early childhood
poverty in adulthood vary based on whether individuals faced education, childcare, and active labor market policies can help break
financial disadvantage during adolescence. Figure 3 highlights the the cycle of intergenerational poverty. However, these policies must
persistent and intensifying impact of adolescent financial be designed to reach disadvantaged groups effectively to avoid
disadvantage on adult poverty risks across cohorts. This exacerbating inequalities (e.g., Matthew Effects).
underscores the importance of comprehensive social policies that
2.Balancing Social Protection and Activation: While social investment
address both immediate needs through income protection and long-
strategies focus on preparing individuals for economic participation,
term opportunities through targeted social investments.
robust income protection measures remain crucial for those unable
1.Higher Poverty Risk for Those with Adolescent Financial to participate in the labor market due to systemic barriers or personal
Disadvantage: Individuals who experienced financial disadvantage circumstances.
during adolescence consistently exhibit a higher probability of being
3.Addressing Dualization: Reducing labor market dualization and
in income poverty as adults compared to those who did not face
ensuring equal access to welfare benefits are essential for
such disadvantages. This pattern holds true across all cohorts,
underscoring the long-term impact of adolescent financial hardship.
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minimizing the long-term effects of adolescent financial disadvantage
on adult poverty risks.

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 mitigated by traditional pathways of social mobility (e.g., education or
employment). The intensification for younger cohorts indicates that
structural changes in labor markets and welfare states—such as
dualization and austerity—may have exacerbated these risks

Table 4: Predicted Probabilities of Current Poverty by Financial

Disadvantage in Adolescence
The table shows that individuals who experienced financial
disadvantage during adolescence have significantly higher
probabilities of being in poverty as adults compared to those who did
not. This pattern holds across all cohorts but is more pronounced for
younger cohorts, reflecting an intensification of the intergenerational
transmission of financial disadvantage over time. The results
highlight the additive impact of adolescent financial disadvantage on
adult poverty risks, even after accounting for mediating factors like Table 5: Cross-National Variations in the Impact of Adolescent
education, employment, and family structure. Financial Disadvantage on Adult Poverty

Implications: The findings suggest that childhood financial

disadvantage has long-term consequences that are not fully

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Table 5 examines how the relationship between adolescent financial policies and protections for “outsiders” show better outcomes in
disadvantage and adult poverty varies across countries with different breaking intergenerational cycles of poverty.
welfare regimes and labor market structures.
3. Policy Recommendations:
Countries with more generous social spending on “outsiders” (e.g.,
To address the persistent effects of adolescent financial
active labor market policies, social exclusion spending) show weaker
disadvantage, policymakers should focus on:
intergenerational transmission of financial disadvantage.
- Expanding universal access to high-quality education,
Conversely, countries with higher labor market dualization or more
childcare, and active labor market programs.
selective welfare systems exhibit stronger persistence of poverty
- Strengthening income protection measures for disadvantaged
across generations.
groups.
Implications: - Reducing labor market dualization to ensure equitable
opportunities for all workers.
The results underscore the importance of comprehensive and
inclusive social policies in mitigating the long-term effects of These findings emphasize the need for targeted interventions to
childhood poverty. address both the immediate needs of disadvantaged groups and the
structural factors perpetuating inequality across generations.
Generous and universal welfare provisions (e.g., in Nordic countries)
are more effective at breaking cycles of intergenerational poverty
compared to selective or fragmented systems (e.g., Southern or
Eastern Europe).
Overall Insights from Tables 4 and 5
1. Intergenerational Transmission:
Adolescent financial disadvantage has a significant and enduring
impact on adult poverty risks, with this effect becoming stronger for
younger cohorts due to structural changes like labor market
flexibilization and welfare retrenchment.
2. Role of Welfare Regimes:
Welfare state generosity and inclusivity play a critical role in
mitigating these risks. Countries with robust social investment
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“Policies can counteract dualization dynamics: Universal Social Protection: Countries with universal welfare systems
(e.g., Nordic states) are more successful at reducing poverty and
Poverty and inequality are the outcome of policy choices / social risk
inequality because they provide comprehensive support to all
protection Something can always be done about it.”
citizens, regardless of labor market status.
The slide emphasizes that poverty and inequality are the outcomes
Investments in Education and Childcare: Early childhood education,
of policy choices and that effective policies can counteract
accessible childcare, and lifelong learning initiatives help reduce
dualization dynamics—the structural divide between labor market
intergenerational poverty by addressing structural inequalities early
“insiders” and “outsiders.” Below is an analysis of how policies can
on.
address these challenges, based on the provided sources:
4.Policy Choices That Counteract Dualization:
1.Poverty and Inequality as Policy Outcomes: Poverty and
inequality are not inevitable; they result from specific policy decisions Generous Minimum Income Protection (MIP): Ensuring adequate
and institutional arrangements. For example, welfare state reforms, income support for those unable to work can mitigate the effects of
labor market flexibilization, and austerity measures have contributed dualization by providing a safety net for outsiders.
to rising inequality and dualization in many countries. Policies that
Reducing Labor Market Segmentation: Policies that promote equal
fail to adequately protect “outsiders” (e.g., low-skilled workers,
access to stable employment for all workers—such as stronger
migrants, or those in precarious jobs) exacerbate these divides.
regulations on temporary contracts—can reduce the insider-outsider
2.Dualization Dynamics: Dualization refers to the growing divide divide.
between “insiders” (workers with stable jobs and strong protections)
Targeted Social Investments: Addressing the needs of
and “outsiders” (those in precarious or informal employment). This
disadvantaged groups through targeted spending on education,
dynamic is often reinforced by selective welfare systems that
training, and social services ensures that resources reach those who
prioritize insiders while leaving outsiders with weaker protections or
need them most.
no safety nets at all. For example, in Central and Eastern Europe,
dualization has been exacerbated by informality in labor markets and 5.“Something Can Always Be Done”:
a lack of comprehensive social investment policies.
The assertion that “something can always be done” reflects the idea
3.The Role of Social Policies: that public policy has the power to shape outcomes. For instance:
Active Labor Market Policies (ALMPs): These aim to integrate Countries with more generous welfare systems have lower rates of
disadvantaged groups into the workforce through training, job intergenerational poverty transmission.
placement, and employment incentives. However, ALMPs must be
inclusive to avoid reinforcing inequalities (e.g., Matthew Effects).
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Proactive social investment policies can reduce long-term inequality
by enhancing human capital and economic opportunities for
marginalized groups.
Conclusion
Poverty and inequality are not fixed outcomes; they are shaped by
policy choices. By adopting inclusive social policies—such as
universal protections, targeted investments in education and
childcare, and active labor market programs—governments can
counteract dualization dynamics and reduce poverty and inequality.
These efforts require sustained political will, adequate funding, and a
commitment to addressing structural barriers faced by
disadvantaged groups.

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