Welfare State Spending Research Articles

The Effect of Welfare State Policy Spending on the Equalization of Socioeconomic Status Disparities in Mental Health.

This article examines whether and how the relationship between socioeconomic status (SES) and depression is modified by welfare state spending using the 2006, 2012, and 2014 survey rounds of the European Social Survey (ESS) merged with macroeconomic data from the World Bank, Eurostat, and SOCX database (N = 87,466). Welfare state spending effort divided between social investment and social protection spending modifies the classic inverse relationship between SES and depression. Distinguishing policy areas in both social investment and social protection spending demonstrates that policy programs devoted to education, early childhood education and care, active labor market policies, old age care, and incapacity account for differences in the effect of SES across countries. Our analysis finds that social investment policies better explain cross-national differences in the effect of SES on depression, implying policies focused earlier in the life course matter more for understanding social disparities in the mental health of populations.

Fiscal policy preferences, trade-offs, and support for social investment

AbstractA common finding in the literature is that social investment policies are broadly popular among citizens but still politically difficult to implement. This article provides a partial answer to this puzzle by exploring the fiscal trade-offs associated with such a recalibration. Based on survey data from eight Western European countries, it first explores citizens’ fiscal policy preferences with regard to the preferred size of the public sector and the distribution of spending across different subsectors. These preferences are then shown to be significantly associated with attitudes towards fiscal trade-offs regarding the expansion of social investment policies. The results reveal a political dilemma for policy-makers keen on expanding social investment: People who traditionally support a large public sector and more welfare state spending tend to oppose redistributing spending towards social investment, whereas support for such a recalibration is higher among those who have a sceptical view on public spending.

Care earnings in the United States and 24 European countries: The role of social policy and labour market institutions

AbstractCare occupations are gendered and remain relatively poorly paid, particularly in the United States. Prior research on the ‘care penalty’ primarily points to individual, relational, and market‐valuation factors in explaining the relative earnings of care workers. This study integrates these explanations with a comparative institutional perspective. Using higher‐quality data and methods than previous comparative research in the field—that is, harmonized micro‐data from the Current Population Survey and EU‐SILC from 2005 to 2016, country and year fixed effects models, and a counterfactual analysis—we find that national variance in labour market and welfare state institutions explains most of the difference in the relative earnings of reproductive care workers between the United States and European countries. Higher rates of collective bargaining coverage, stronger employment protection and welfare state spending contribute to higher relative earnings for reproductive care occupations, and lower relative earnings for high‐status nurturant care occupations. Differences in the relative earnings of care workers appear to be mostly a construct of social policy and labour market institutions rather than individual, relational, and market‐valuation factors.

“Women’s Work”: Welfare State Spending and the Gendered and Classed Dimensions of Unpaid Care

This study is the first to explicitly assess the connections between welfare state spending and the gendered and classed dimensions of unpaid care work across 29 European nations. Our research uses multi-level model analysis of European Quality of Life Survey data, examining childcare and housework burdens for people living with at least one child under the age of 18. Two key findings emerge: First, by disaggregating different types of unpaid care work, we find that childcare provision is more gendered than classed—reflecting trends toward “intensive mothering”. Housework and cooking, on the contrary, demonstrate both gender and class effects, likely because they are more readily outsourced by wealthier individuals to the paid care sector. Second, while overall social expenditure has no effect on hours spent on childcare and housework, results suggest that family policy may shape the relationship between gender, income, and housework (but not childcare). Specifically, family policy expenditure is associated with a considerably smaller gender gap vis-à-vis the time dedicated to housework: This effect is present across the income spectrum, but is particularly substantial in the case of lower income women.

Welfare State Spending, Income Inequality and Food Insecurity in Affluent Nations: A Cross-National Examination of OECD Countries

Few studies examine the distribution of food insecurity in advanced capitalist nations. This research investigates cross-national food insecurity in the world’s largest economies by estimating the impact of welfare spending and income inequality on food availability (measured by the FAO’s Dietary Energy and Protein Supply indicators) and food accessibility (measured by the Food Insecurity Experience Scale) in 36 Organization for Economic Cooperation and Development (OECD) countries between the years of 2000 and 2018. Using a series of regression models on panel and cross-sectional data this research found that increases in state spending on social and health care are associated with (1) increases in food availability and (2) increases in food access. However, the findings also suggest that increases in food supplies do not produce more food security. Thus, for the OECD countries in this analysis, food availability is unrelated to food accessibility. We conclude by suggesting that high income countries that seek to promote global health should not only focus their efforts on poverty reduction polices that increase food accessibility within their own boarders, but must simultaneously ensure a more equitable global distribution of food.

Food banks, actually existing austerity and the localisation of responsibility

This paper contributes to emerging geographical literature on what is here conceptualised as ‘actually existing austerity’—referring to the uneven ways through which austerity is felt, negotiated, embodied and contested in the varied spatial tapestry of everyday life. Through theorisation of the contemporary operation of food banking in the UK, it will be argued that the gaps in provisioning (in this case, of food) left by welfare reform and state spending cuts in the UK under the guise of austerity are engendering new forms of responsibility that are unevenly distributed and performed—often by those already excluded, marginalised and impoverished. This localisation of responsibility has crucial implications for how austerity becomes embodied and negotiated, as well as the unequal material implications it holds for different people and places. This paper concludes by arguing for a future research agenda concerning actually existing austerity, signalling the need for 'thicker' and more grounded accounts of austerity at scales beyond the nation-state and/or city alone.

Private Wealth Across European Countries: The Role of Income, Inheritance and the Welfare State

Using microdata from the Household Finance and Consumption Survey (HFCS), this study examines the role of inheritance, income and welfare state policies in explaining differences in household net wealth within and between euro area countries. First, about one-third of the households in the 13 European countries we study report having received an inheritance, and these households have considerably higher net wealth than those which did not inherit. Second, regression analyses on households' relative wealth position show that, on average, having received an inheritance lifts a household by about 14 net wealth percentiles. At the same time, each additional percentile in the income distribution is associated with about 0.4 net wealth percentiles. These results are consistent across countries. Third, multilevel cross-country regressions show that the degree of welfare state spending across countries is negatively correlated with household net wealth. These findings suggest that social services provided by the state are substitutes for private wealth accumulation and partly explain observed differences in levels of household net wealth across European countries. In particular, the effect of substitution relative to net wealth decreases with growing wealth levels. This implies that an increase in welfare state spending goes along with an increase—rather than a decrease—of observed wealth inequality.

Migrants' support for welfare state spending in Denmark, Germany, and the Netherlands

AbstractThis contribution describes differences between 10 migrant groups and natives in their attitudes towards government spending in three residence countries: Denmark, Germany, and the Netherlands. Previous research provided evidence that “migrants” as a catch‐all category of people from different origins are in favor of more government spending on social welfare. We study to what extent support for government spending can be explained by self‐interest explanations of welfare state attitudes as well as by differences in ideological position. The contribution employs data from the Migrants' Welfare State Attitudes project, including migrant groups from similar origins in Denmark, Germany, and the Netherlands. The study moves beyond the larger migrant groups of Turks and Poles that received attention in previous research as well, and includes a greater variety of groups that differ in terms of their skill levels. The overall finding is that migrants' welfare state spending preferences are, as in the case of natives, significantly related to socio‐demographic differences and standard ideology measures of attitudes to regulation of the economy and family values. However, even with these standard variables included, spending preferences differ strongly between migrant groups, residence countries, and welfare spending domain. A comparison between country of origin and residence country provisions seems to be a promising path for further understanding migrant group differences in welfare state spending attitudes. The study challenges the idea that all migrants are supportive of extended welfare state arrangements.

The Divisive Welfare State

AbstractAn important tradition in social policy writing sees the welfare state as an agent of social cohesion against the divisive conflicts of market capitalism. Social policy in the UK is now developing in a way that directly conflicts with this approach. This may signal the future direction of change in other countries, as crisis and slow growth limit available resources, and governments become increasingly committed to a neo‐liberal and consolidation agenda. The 2010 Conservative‐led coalition and 2015 Conservative governments in the UK use social policy to exacerbate and embed social divisions as part of a project to achieve permanent cuts in welfare state spending without damaging their own electoral chances. This article reviews the divisive welfare state policies in relation to taxation, benefits for working age people and for immigrants and between pensioners and non‐pensioners because these groups cover much of welfare state activity and are currently salient in a way that gives the project political purchase. It goes on to argue that the divisions mask a further neo‐liberal long‐term project, facilitated by Brexit, of reducing the proportion of national resources going to all recipients of social spending. In this sense, we are all in it together.

Welfare State and Representation: Do Women Make the Welfare State or Does the Welfare State Make Women Representatives?

The relationship between welfare states and women's representation in parliaments has been of great interest to scholars. However, different strands of the literature on gender and political representation suggest opposing directions of causality. On the one hand it is argued that a rise in welfare spending increases women's representation in parliaments, but on the other hand, more women in parliaments is said to expand welfare spending. This paper analyses the problem empirically and finds that the lagged values of women's parliamentary representation are better predictors of welfare spending than the lagged values of spending are of women's per cent in parliaments. In other words, women make the welfare state and welfare spending does not make female representatives.

ECONOMIC GROWTH, PUBLIC DEBT AND SOCIAL SPENDING. SHOULD WELFARE STATE TAKE THE BLAME?

In this paper we trace the relation between economic growth, public debt and social spending treated as a proxy for welfare state spending in the context of 2008+ crisis in advanced capitalist economies. We focus on the alleged causality between high welfare spending and growing public debt which is often said to have contributed to the current debt crisis experienced by many countries and we elaborate on the often heralded thesis that high social spending leads to low growth levels. By doing so we intend to find out if welfare states can indeed be identified as a source of current fiscal problems and prosperity issues. We perform our analysis on a group of 21 highly developed countries in 1991–2014 period basing on OECD data. Our findings suggest that evidence to support such theses are mixed and rather weak and do not allow for drawing firm conclusions about harmful impact of welfare state on economic performance. On this background we also comment on the usability of statistics and case studies in social sciences.

Migration and welfare state spending

Is international migration a threat to the redistributive programmes of destination countries? Existing work is divided. This paper examines the manner and extent to which increases in immigration are related to welfare state retrenchment, drawing on data from 1970 to 2007. The paper makes three contributions: (1) it explores the impact of changes in immigration on social welfare policy over both the short and medium term; (2) it examines the possibility that immigration matters for spending not just directly, but indirectly, through changes in demographics and/or the labour force; and (3) by disaggregating data on social expenditure into subdomains (including unemployment, pensions, and the like), it tests the impact of immigration on different elements of the welfare state. Results suggest that increased immigration is indeed associated with smaller increases in spending. The major pathway is through impact on female labour force participation. The policy domains most affected are ones subject to moral hazard, or at least to rhetoric about moral hazard.

Private Wealth Across European Countries: The Role of Income, Inheritance and the Welfare State

Using microdata from the Household Finance and Consumption Survey (HFCS), this study examines the role of inheritance, income and welfare state policies in explaining differences in household net wealth within and between euro area countries. First, about one third of the households in the 13 European countries we study report having received an inheritance, and these households have considerably higher net wealth than those which did not inherit. Second, regression analyses on households' relative wealth position show that, on average, having received an inheritance lifts a household by about 14 net wealth percentiles. At the same time, each additional percentile in the income distribution is associated with about 0.4 net wealth percentiles. These results are consistent across countries. Third, multilevel cross-country regressions show that the degree of welfare state spending across countries is negatively correlated with household net wealth. These findings suggest that social services provided by the state are substitutes for private wealth accumulation and partly explain observed differences in levels of household net wealth across European countries. In particular, the effect of substitution relative to net wealth decreases with growing wealth levels. This implies that an increase in welfare state spending goes along with an increase - rather than a decrease - of observed wealth inequality. JEL Classification: D30, D31

The sovereign debt crisis, the EU and welfare state reform

This Special Issue examines the EU’s monetary, fiscal, and social responses to the sovereign debt crisis and analyses how the European Union (EU) has affected welfare state reforms in the Member States most severely hit by the crisis. This editorial introduction presents the severe crisis context in which the EU altered existing tools and developed new ones in the governance of the EMU and of social policy. The findings of the Special Issue show that the nature of EU intervention into domestic welfare states has changed, with an enhanced focus on fiscal consolidation, increased surveillance and enforcement of EU measures. Overall, this represents a radical alteration of EU integration, whereby the EU is involved in domestic affairs to an unprecedented degree, particularly with regard to national budgets, of which welfare state spending is an important component. Since these changes are highly institutionalized, particularly the requirement of balanced budgets, it is necessary that the EU encourages social investment much more than it does presently.

Bringing the median voter back in: The relationship between government debt, median voter preferences, and welfare state spending

Welfare state spending cuts are effective fiscal consolidation tools, but some policymakers use other fiscal policy tools to address high levels of government debt. I argue that the economic incentive to cut welfare spending when government debt is high is undermined by the political incentive to stay in power when the median voter opposes retrenchment. Using survey data to measure the policy position of the median voter as well as hard figures on government debt and government social spending from 18 Organisation for Economic Co-operation and Development (OECD) countries, I estimate a series of regressions that show that government debt has a negative effect on social spending, but only when the median voter does not oppose retrenchment. This holds true for broad measures of social spending as well as for unemployment spending and old-age pension spending.

How have Europeans grown so tall?

Increases in human stature are seen as a key indicator of improvement in the average health of populations. The literature associates stature with a variety of socioeconomic variables, and much of the focus is on the nineteenth century and on the last 50 years. In this paper I present and analyse a new dataset for the average height of adult male cohorts, from the mid-nineteenth century to 1980, in fifteen European countries. In little more than a century average height increased by 11cm--representing a dramatic improvement in health. Interestingly, there was a distinct acceleration in the period spanning the two World Wars and the Great Depression. I examine the influence of socioeconomic variables on height through the two key channels: nutrition and the disease environment. The evidence suggests that the most important single cause of increasing height was the improving disease environment as reflected by the fall in infant mortality. Rising income and education and falling family size had more modest effects. Improvements in health care are hard to identify and the effects of the welfare state spending seem to have been small.

Education state, welfare capitalism regimes, and politics

Esping-Andersen’s welfare state capitalism typology can be extended by including education as one component of the welfare regime. An analysis shows that Liberal welfare regimes put more relative effort into the education state compared with their lower levels of welfare state spending and this acts as a kind of functional substitute for welfare state spending. This pattern is consistent with Liberalism’s emphasis on equality of opportunity over equality of outcomes. In contrast, Social Democratic and Conservative welfare regime countries put less effort into accumulated education investment compared with their welfare state spending. A number of political factors shape this outcome. Greater Left party support tends to expand both welfare state spending and accumulated education investment. Stronger unions tend to expand overall welfare state spending and reduce accumulated education investment. Greater Center party support leaves accumulated education investment unaffected but raises overall welfare state spending. More Catholicism in a country leaves overall welfare state spending unaffected but tends to lower accumulated education investment.

The Double Crisis of the Welfare State and What We Can Do about It

The NHS, education, social care, local government, employment services, social housing and benefits for the poor face major challenges from a government determined to entrench a radical and divisive liberalism permanently in British public life. This book analyses the immediate challenges from headlong cuts that bear most heavily on women, families and the poor, and from a root-and-branch restructuring which will fragment and privatise the bulk of public services. It sets this in the context of escalating inequalities and the longer-term pressures from population ageing. It demonstrates that a more humane and generous welfare state that will build inclusiveness is possible by combining policies that limit child poverty, promote more equal outcomes from health care and education, introduce a greater contributory element into social benefits, invest in better child and elder care and address low wages and workplace rights. It shows that such policies are affordable because they follow the long-term trajectory of welfare state spending across the UK and other developed countries. It analyses the political forces that can be marshalled to support these shifts and shows that, with political leadership, the welfare state can attract mass support.

International migration and the welfare state revisited

Immigration is a controversial topic in most developed economies. The presence of a redistributive welfare state in all major immigrant host countries creates a margin on which immigration affects native welfare. The primary focus of the paper is whether a large intake of immigrants reduces welfare state effort. It is usually argued that steady increases in immigration lead to public pressure for lower levels of publicly-funded social expenditures. In contrastz to the earlier empirical literature on this topic, we find little evidence in favour of this hypothesis. While immigration does have a relatively modest effect on the welfare state, if anything there is some support for the view that a greater influx of immigrants has lead policy-makers to increase welfare state spending.

Political institutions, voter turnout, and policy outcomes

This paper tests whether constitutions directly affect economic outcomes. By introducing citizens' political participation as the driving force connecting institutions to policy outcomes, we empirically show that voter turnout is the channel through which forms of government affect economic policies. We provide evidence of the existence of two relationships. First, presidential regimes appear to be associated with lower voter participation in national elections. Second, higher voter participation induces an increase in government expenditure, total revenues, welfare state spending, and budget deficit. We conclude that forms of government affect policy outcomes only through voter turnout.