Varieties of welfare capitalism

Abstract

Despite the considerable influence of Esping-Andersen’s categorization of three ‘worlds’ of welfare capitalism, researchers have largely neglected investigation of his dimensions of welfare state policy and politics. Building on and extending the foundations provided by Esping-Andersen, we explore the identities and consequences of welfare state regime dimensions. Our principal components analyses identify two such dimensions. The first, which we label ‘progressive liberalism’, rearranges Esping-Andersen’s separate ‘social democratic’ and ‘liberal’ dimensions into two poles of a single dimension. Its positive pole is characterized by extensive, universal and homogeneous benefits, active labour market policy, government employment and gender-egalitarian family policies. The second, which we label ‘traditional conservatism’, is similar to but broader than Esping-Andersen’s conservative dimension. It features not only occupational and status-based differentiations of social insurance programmes and specialized income security programmes for civil servants, but also generous and long-lasting unemployment benefits, reliance on employer-heavy social insurance tax burdens and extensions of union collective bargaining coverage. Pooled cross-section time-series regressions covering 18 countries over the 1980s and 1990s suggest that progressive liberalism is associated with income redistribution and greater gender equality in the labour market. The principal consequence of traditional conservatism appears to be weakened employment performance.