The Redistributive Impact of ‘Old’ and ‘New’ Social Spending

Abstract

AbstractThe welfare state literature has recently identified a shift from the protection against traditional risks to social investment. In this new future-oriented and activation-based social policy, the focus is on the redistribution of opportunities instead of income. Even if vertical redistribution from the rich to poor may be only one rationale of social action, it should not be overlooked when directing social policy from insurance to investment. This article has two objectives: first, it investigates how real this shift is in macro-economic terms, and, secondly, whether the increased focus on new social risks and social investment has possibly changed welfare states’ commitment to redistribute from the rich to poor. I compare the distribution of benefits from ‘old’ spending categories (such as retirement or unemployment) with those from ‘new’ ones (such as having care responsibilities). Analysing six European countries representing different welfare state regimes, I find no evidence that new social spending would mean necessarily renouncing egalitarian ambitions. On the contrary, in all countries the distribution of new spending is more equal or pro-poor than the spending on old social risks. Different households benefit in distinct ways: the elderly benefiting the most from traditional spending (with the exception of elderly care that is categorised here as ‘new’ social spending) and families with children and single parents from new spending.