Austerity or welfare state transformation? Examining the impact of economic crises on social regulation in Europe

Abstract

AbstractThis article provides an encompassing analysis of how economic crises affect social regulation. The analysis is based on an innovative dataset that covers policy output changes in 13 European countries over a period of 34 years (1980–2013) in the areas of pensions, unemployment, and child benefits. By performing a negative binomial regression analysis, we show that economic crises do matter for social policymaking. Our main empirical finding is that crises impinge on social regulation by opening a window of opportunity that facilitates the dismantling of social policy standards. Yet crisis‐induced policy dismantling is restricted to adjustments based on existing policy instruments. We do not find significant variation in policymaking patterns across different macroeconomic conditions for the more structural elements of social policy portfolios, such as the envisaged social policy targets or the policy instruments applied. This suggests that economic crises do not lead to a profound transformation of the welfare state but to austerity.