Welfare Generosity Research Articles

Platforms, Portfolios, Policy: How Audience Costs Affect Social Welfare Policy in Multiparty Cabinets

When and why do electoral commitments enhance parties’ ability to implement their preferred policy in multiparty governments? We propose an audience costs theory whereby strong platform commitments enhance parties’ negotiating positions in multiparty cabinets but only when they are on a salient policy issue for core voters and the party controls the policy-relevant portfolio. Utilizing new data on portfolio allocations in eight parliamentary democracies over 40 years, we show that absent a strong platform commitment, control of the portfolio of social affairs by social democrats, alone, is not associated with changes in welfare generosity. Notably, our findings are independent of party size and hold in most multiparty legislative systems not dominated by three parties.

Give Us Your Tired, Your Poor and We Might Buy Them Dinner: Social Capital, Immigration, and Welfare Generosity in the American States

A long-standing debate persists regarding how social capital relates to diversity and inequality in the American states. Putnam argues social capital leads to greater equality and tolerance; however, others find that it increases racial inequality. We build on Soss, Fording, and Schram’s Racial Classification Model (RCM) and theorize that social capital enhances social trust and empathy in homogeneous contexts and favors paternalistic and punitive social controls in diverse contexts. We test this using the case of immigration and welfare generosity following the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996. Using state-level data from 1997 to 2009, we find that under conditions of low immigration, social capital is associated with increased social trust and empathy; however, as immigration increases, social capital pivots toward favoring mechanisms of social control. Specifically, social capital increases Temporary Assistance for Needy Families (TANF) cash benefit levels, but only when immigration levels are low. In high-immigration contexts, social capital is associated with decreased welfare generosity.

Rethinking the Risks of Poverty: A Framework for Analyzing Prevalences and Penalties

This article develops a framework for analyzing the risks of poverty in terms of prevalences (share of the population with a risk) and penalties (increased probability of poverty associated with a risk). A comparison of the four major risks (low education, single motherhood, young headship, and unemployment) across 29 rich democracies reveals there is greater variation in penalties than prevalences. The United States has high poverty partly because it has the highest penalties despite below average prevalences. Also, U.S. poverty in 2013 would be worse with prevalences from 1970 or 1980. There is little evidence that penalties discourage prevalences, while welfare generosity significantly moderates the penalties for unemployment and low education. The authors conclude that a focus on risks does not provide a convincing explanation of poverty, single motherhood may be the least important of the risks, and studies based solely on the United States are constrained by potentially large sample selection biases.

A fuzzy set approach to economic crisis, austerity and public health. Part I. European countries' conformity to ideal types during the economic downturn.

This is the first part of a two-part paper that takes an explorative approach to assess crisis and austerity in European countries during the Great Recession. The ultimate aim of this two-part paper is to explore the "crisis-austerity" thesis by Stuckler and Basu and assess whether it is the interplay between austerity and crisis, rather than the current economic crisis per se, that can led to deterioration in population health. In Part I of this paper we offer one way of operationalizing crisis severity and austerity. We examine countries as specific configurations of crisis and policy responses and classify European countries into "ideal types." Cases included were 29 countries participating in the European Union Statistics on Income and Living Conditions (EU-SILC) surveys. Based on fuzzy set methodology, we constructed two fuzzy sets, "austerity" and "severe crisis." Austerity was measured by changes in welfare generosity; severe crisis was measured by changes in gross domestic product (GDP) per capita growth. In the initial phase of the Great Recession, most countries faced severe crisis combined with no austerity. From 2010-2011 onward, there was a divide between countries. Some countries consistently showed signs of austerity policies (with or without severe crisis); others consistently did not. The fuzzy set ideal-type analysis shows that the European countries position themselves, by and large, in configurations of crisis and austerity in meaningful ways that allow us to explore the "crisis-austerity" thesis by Stuckler and Basu. This exploration is the undertaking of Part II of this paper.

Can a comparative capitalism approach explain fiscal policy activism?

ABSTRACTThis study investigates the implications of models of capitalism for the responsiveness of countries’ fiscal policies during business cycles using new data for member countries of the Organization for Economic Cooperation and Development and China. We expand the literature by adding the category of East Asian nonliberal capitalism to the established distinction of liberal market economies and nonliberal coordinated market economies. These three differ substantially not just in their fiscal policies, but also in monetary policies, degree of financial market orientation, exchange rate regime, and labor market organization. As in previous studies, we find that governments of liberal economies adopt more countercyclical fiscal policies. Departing from existing studies, however, among the nonliberal models of capitalism, (East Asian) state-led models have more countercyclical fiscal policies than (European) coordinated market economies, perhaps as countercyclical as liberal economies, both historically and during the 2007–9 crisis. This is due to less independent central banks, managed float of exchange rates, and limited financial market orientation and financial openness in East Asia, which allow for more active fiscal policy. Among political factors, left-of-center governments, fractionalized party systems, and election years are associated weakly with countercyclical fiscal policy, as expected. Labor market coordination and welfare generosity have unclear roles in regard to fiscal policy, a topic for future research.

Welfare resources and social risks in times of social and economic change: a multilevel study of material deprivation in European countries

ABSTRACTThis paper studies the association between collective welfare resources, levels of and inequalities in, material deprivation among ‘new’ as well as ‘old’ social risk groups four years into the global crisis. The data are based on the cross-sectional survey EU-SILC (European Union Statistics on Income and Living Conditions) 2012. The multilevel analysis includes 27 European countries and 294,803 individuals between 18 and 64 years of age. The results demonstrate that the risk of material deprivation decreased in absolute terms with increasing welfare generosity among all three risk groups studied: individuals facing limiting long-standing illness, the non-employed and the low educated. In some instances the modifying effect of welfare generosity was stronger among the advantaged group than among the disadvantaged groups. The low educated benefitted the most in terms of a substantially lower risk of material deprivation. Results also show that both the absolute inequalities and levels of material deprivation were consistently lower in generous welfare states. The findings support the view that directing undue weight on risks, risk assessment and risk management in the context of social work practices should not reduce the importance of collective welfare resources to alleviate welfare problems among disadvantaged groups.

Generous to all or ‘insiders only’? The relationship between welfare state generosity and immigrant welfare rights

Two sharply contrasting accounts exist for the relationships between welfare generosity and immigrant social rights. The dualization hypothesis argues that due to fiscal pressures and welfare chauvinism, generous welfare states are more likely to exclude immigrants from access to welfare benefits. The generosity hypothesis argues that on the contrary, in generous welfare states, an immigrant will be granted greater access to benefits for material, institutional and cultural reasons. Using newly collected data from the Immigration Policies in Comparison (IMPIC) project that covers 18 Organisation for Economic Co-operation and Development (OECD) states over 30 years (1980–2010) the two hypotheses are tested using pooled time series analyses. Both a composite index of welfare generosity and social welfare expenditures are used as explanatory variables. Furthermore, the analyses include a number of controls from the welfare state literature, as well as a measure for overall immigration policy restrictiveness. The results broadly support the generosity hypothesis. By contrast, the analyses yield no support for the dualization hypothesis. The index of welfare generosity is positively and significantly associated with immigrant access to benefits, while social welfare expenditures are positively signed but not significant. A number of sensitivity analyses confirm the robustness of the results. Ultimately, this study demonstrates that generous welfare states are more likely to grant immigrants access to welfare benefits, and less generous welfare states are more likely to exclude immigrants from access.

A Benefit Recipiency Approach to Analysing Differences and Similarities in European Welfare Provision

In comparative welfare state research, the question of how to measure and understand cross-country differences and similarities in extents of public welfare provision has led to a major discussion about the indicators that could be used for this purpose. Much scholarly attention approaching this so-called ‘dependent variable problem’ concentrates on social expenditure or on social rights data as indicators of ‘welfare stateness’ or ‘welfare generosity’. However, recently, micro-level data on benefit receipt as another promising but hitherto underused indicator was brought into this discussion. The article at hand extends existing knowledge about the conceptual, methodological and empirical potentials and challenges of this alternative indicator compared to the two prevailing indicators. For the empirical analysis, it uses cash benefit recipiency data from the EU-SILC to investigate differences and similarities in extents of public welfare provision between 29 European countries for the period 2003–2012. The study reveals parallels to findings from research in which indicators of social expenditure and social rights are applied, but it also adds new insights beyond their cost and paper reality. This is mainly the case where priority is given to household-related assistance benefits rather than individual insurance benefits. The main conclusion of the paper is that the benefit recipiency indicator—despite not being flawless and requiring further research—complements existing knowledge on differences and similarities in welfare provision by European welfare states.

A new approach to the study of partisan effects on social policy

ABSTRACTMuch research has analysed the influence of government partisanship on social policies. This contribution addresses three challenges in that literature. First, it advocates a dynamic linear modelling (DLM) approach well suited to address time-varying partisan effects. Second, the DLM makes it possible to examine partisan effects country-by-country, thereby avoiding the cross-national pooling approach dominating this literature. Third, it offers a new approach to the challenge of choosing the right control variables. Empirically, we demonstrate the approach using data from 1972 to 2011 from 14 Western European countries. The main conclusion is that the relationship between government partisanship and welfare generosity does not appear to vary over time according to any pattern predicted by existing theories. More generally, findings indicate that in the countries and years covered by this study, government partisanship has very little or no association with the five different social policy measures included in the analyses.

The Influence of Inequality on Welfare Generosity

This article examines the relationship between income concentration and policy outputs that determine the generosity of two major state-level safety net programs: unemployment insurance and cash social assistance. Using a difference in differences framework, it tests the degree to which the top 1 percent share is associated with benefit replacement rates for these programs during the period 1978–2010. The results suggest that higher state income inequality lowers those states’ welfare benefits significantly in ways consistent with a “plutocracy” hypothesis that has been suggested in work by scholars such as Bartels, Bonica, Gilens, and Page. The results are robust to controls for several alternative explanations for benefit generosity, including citizen ideology, party control of government, fiscal pressure on programs, state racial heterogeneity, and public opinion liberalism. The results thus support the notion that growing income concentration at the very top undermines social protection policies.

The Electoral Determinants of State Welfare Effort in the U.S. South, 1960–2008

AbstractThis article examines the impact of electoral politics on state welfare policy in the post-civil rights era South. In contrast to an emerging consensus concluding that southern African Americans materially benefited from rejoining the electorate, this study suggests that higher black registration rates actually reduced states' poverty relief efforts. In the years immediately following the Voting Rights Act (VRA), when Democrats controlled state government, the significant negative relationship between the size of the black electorate and state welfare generosity was moderated to some extent by high levels of partisan competition. In such cases, Democrats ostensibly chose a “core” targeting strategy of pursuing lower-income votes and had the institutional wherewithal to purchase these votes with policy concessions. Overall, however, the liberal “Downsian” policy response to African American mobilization was dominated by an antiredistributive response. In the South, welfare policies were relatively conservative vis-à-vis the other states during Jim Crow and became more so in response to black voting.

The Nordic Model and the Oil Nation

This paper investigates the long-run economic effects of large natural resource endowments, through a comparative quantitative case study. Focusing on three economic features of the so-called Nordic model, namely low income inequality, high labour productivity growth, and high welfare spending, this study estimates the shocks to these key features in Norway after the country became one of the world'’s largest oil exporters. A synthetic control unit constructed by weighting Nordic countries that resemble the economy of Norway without being oil producers provides the most reliable comparison unit to estimate the causal effects constituting the paper’s threefold contribution. First, results show that the resource windfall contributed to relatively higher top income shares, adding natural resources to the set of drivers of income inequality in Norway. Second, the resource windfall boosted labour productivity. Third, resource revenues contributed to financing the steadily increasing gap between Norway and other Nordic countries in the degree of welfare generosity. Sensitivity tests through in-time placebo tests and difference-in-differences estimations confi rm the validity of these results.

Shorter lives in stingier states: Social policy shortcomings help explain the US mortality disadvantage

The United States has a mortality disadvantage relative to its political and economic peer group of other rich democracies. Recently it has been suggested that there could be a role for social policy in explaining this disadvantage. In this paper, we test this “social policy hypothesis” by presenting a time-series cross-section analysis from 1970 to 2010 of the association between welfare state generosity (for unemployment insurance, sickness benefits, and pensions) and life expectancy, for the US and 17 other high-income countries. Fixed-effects estimation with autocorrelation-corrected standard errors (robust to unmeasured between-country differences and serial autocorrelation of repeated measures) found strong associations between welfare generosity and life expectancy. A unit increase in overall welfare generosity yields a 0.17 year increase in life expectancy at birth (p < 0.001), and a 0.07 year increase in life expectancy at age 65 (p < 0.001). The strongest effects of the welfare state are in the domain of pension benefits (b = 0.439 for life expectancy at birth, p < 0.001; b = 0.199 for life expectancy at age 65, p < 0.001). Models that lag the measures of social policy by ten years produce similar results, suggesting that the results are not driven by endogeneity bias. There is evidence that the US mortality disadvantage is, in part, a welfare-state disadvantage. We estimate that life expectancy in the US would be approximately 3.77 years longer, if it had just the average social policy generosity of the other 17 OECD nations.

The effect of lowering welfare payment ceilings on children's risk of out-of-home placement

Although much research considers the relationship between family income and child maltreatment, contact with child protective services (CPS), and out-of-home placement, little research provides a strong causal test of these different relationships. And, as such, it remains unclear how increasing or decreasing the generosity of social welfare programs could affect children's risk of experiencing maltreatment, CPS contact, and out-of-home placement. In this article, we use Danish registry data and a 2004 policy shock to estimate the effect of a substantial decrease in welfare generosity—a monthly reduction in disposable income of 30% for those who were on a specific form of welfare for six consecutive months or more—on children's risk of out-of-home placement. Our results indicate that this decrease in welfare generosity increased children's risk of out-of-home placement by about 1.5 percentage points in any given year, representing an increase of about 25% in the annual risk of out-of-home placement. The results also indicate that in a similar group of welfare-dependent individuals who were not affected by the policy shock, there is only a negligible increase in the risk of out-of-home placement, further buttressing the case for causal effects. Taken together, this article shows that substantial changes in the economic conditions of the poorest families can have a substantial effect on the probability that their children will be placed in out-of-home care.

Can a Comparative Capitalism Approach Explain Fiscal Policy Activism?

This study investigates the implications of models of capitalism for the responsiveness of countries’ fiscal policies during business cycles using new data for OECD countries and China. We expand the literature by adding the category of East Asian non-liberal capitalism to the established distinction of liberal market economies and non-liberal coordinated market economies. These three differ substantially not just in their fiscal policies, but also monetary policies, degree of financial market orientation, exchange rate regime and labor-market organization. As in previous studies, we find that governments of liberal economies adopt more countercyclical fiscal policies. Departing from existing studies, however, among the non-liberal models of capitalism, (East Asian) state-led models have more countercyclical fiscal policies than (European) coordinated market economies, perhaps as countercyclical as liberal economies, both historically and during the 2007-2009 crisis. This is due to the less independent central banks, managed float of exchange rates, and limited financial-market orientation and financial openness in East Asia, which allow for more active fiscal policy. Among political factors, left-of-center governments, fractionalized party systems and election years are associated weakly with countercyclical fiscal policy as expected. Labor market coordination and welfare generosity have unclear roles on fiscal policy, a theme for future research.

Welfare Generosity in Europe: A Multi‐level Study of Material Deprivation and Income Poverty among Disadvantaged Groups

AbstractThe aim of this study is to analyze whether and to what extent welfare generosity moderates the risk of income poverty and material deprivation among disadvantaged groups, that is, people with ill health, low education and lack of employment. The data are based on the 2009 European Union Statistics on Income and Living Conditions (cross‐sectional) surveys. The analyses comprise 27 and 28 European countries, including 292,874 and 302,343 individuals between 18 and 64 years of age. Multi‐level analyses demonstrated that welfare generosity moderated the risk of both material deprivation and income poverty. With few exceptions, the risk decreased among disadvantaged groups in absolute terms. Among individuals who experienced the combinations of limiting long‐standing illness and either low education or non‐employment, the absolute inequalities in material deprivation decreased with increasing welfare generosity. Also, the absolute inequalities in income poverty among individuals who experienced the combination of limiting long‐standing illness and low education were lower in more generous welfare contexts. Results indicated lower absolute levels of both material deprivation and income poverty among disadvantaged individuals in generous welfare states. However, for material deprivation the results were more substantial and consistent than for income poverty. Taken together, these findings support the view that generous welfare states reach the worst‐off and are successful in buffering material deprivation and income poverty and, hence, in reducing social inequalities.

Spatial Integration of Immigrants in Nordic Cities: The Relevance of Spatial Assimilation Theory in a Welfare State Context

This article investigates the relevance of spatial assimilation theory in Copenhagen, Helsinki, Oslo, and Stockholm. An important backdrop is the “Nordic model of welfare”: We assume that welfare generosity decreases the speed of spatial integration. The study uses non-Western immigrants as a target group and natives as a reference group. We register location in 2000 and 2008, and analyze integration in terms of neighborhood status and residential segregation. The results show, in all cities, a lack of aggregate upward mobility in the spatial hierarchy. We also find a negligible effect of upward earnings mobility on upward spatial mobility. Upward spatial mobility increases integration in ethnic terms, but other factors work in the opposite direction and contribute to prevailing segregation. The results as a whole strengthen the purported association between welfare state characteristics and spatial integration. Deviant outcomes, particularly in Helsinki, are explained by immigration history and housing market structure.

Welfare States, Labor Markets, Political Dynamics, and Population Health: A Time-Series Cross-Sectional Analysis Among East and Southeast Asian Nations.

Recent scholarship offers different theories on how macrosocial determinants affect the population health of East and Southeast Asian nations. Dominant theories emphasize the effects of welfare regimes, welfare generosity, and labor market institutions. In this article, we conduct exploratory time-series cross-sectional analyses to generate new evidence on these theories while advancing a political explanation. Using unbalanced data of 7 East Asian countries and 11 Southeast Asian nations from 1960 to 2012, primary findings are 3-fold. First, welfare generosity measured as education and health spending has a positive impact on life expectancy, net of GDP. Second, life expectancy varies significantly by labor markets; however, these differences are explained by differences in welfare generosity. Third, as East and Southeast Asian countries become more democratic, welfare generosity increases, and population health improves. This study provides new evidence on the value of considering politics, welfare states, and labor markets within the same conceptual framework.

Young people and home ownership in Europe

The paper investigates home ownership amongst young people in Europe. Studies which compare experiences across European countries on this topic are very scarce. Using European Survey on Income and Living Conditions data, this paper conducts a multilevel analysis in 28 European countries, aiming to provide further insights about young people's home ownership considering both macro and micro factors known to influence levels of home ownership. Based upon an analysis of key literature, the paper focuses on the influence of the housing system, labour market, and welfare state in each country, and on the social class of origin of the individual. The analyses show the relevance of socio-economic family background: young adults from the middle class are more likely to live in homes they own, compared to those from the lower and higher classes. Beyond individual characteristics, social policy has substantial influence on the tenure status of young adults. Most notably, this paper concludes that there is a negative correlation between the welfare generosity of the state and levels of home ownership, supporting the idea of the house as a safe haven and emphasising the importance of the social class of origin, especially in those countries where family is traditionally seen as the social safety net.

Individual-level changes in self-rated health before and during the economic crisis in Europe.

BackgroundChanges over time in self-rated health (SRH) are increasingly documented during the current economic crisis, though whether these are due to selection, causation, or methodological artefacts is unclear. This study accordingly investigates changes in SRH, and social inequalities in these changes, before and during the economic crisis in 23 European countries.MethodsWe used balanced panel data, 2005–2011, from the European Union Statistics on Income and Living Conditions (EU-SILC). We included the working-age population (25–60 years old) living in 23 European countries. The data cover 65,618 respondents, 2005–2007 (pre-recession cohort), and 43,188 respondents, 2008–2011 (recession cohort). The data analyses used mixed-effects ordinal logistic regression models considering the degree of recession (i.e., pre, mild, and severe).ResultsIndividual-level changes in SRH over time indicted a stable trend during the pre-recession period, while a significant increasing trend in fair and poor SRH was found in the mild- and severe-recession cohorts. Micro-level demographic and socio-economic status (SES) factors (i.e., age, gender, education, and transitions to employment/unemployment), and macro-level factors such as welfare generosity are significantly associated with SRH trends across the degrees of recession.ConclusionsThe current economic crisis accounts for an increasing trend in fair and poor SRH among the general working-age population of Europe. Despite the general SES inequalities in SRH, the health of vulnerable groups has been affected the same way before and during the current recession.Electronic supplementary materialThe online version of this article (doi:10.1186/s12939-015-0290-8) contains supplementary material, which is available to authorized users.