Types of Welfare State

Types of Welfare State

Regional Innovation Policy

Celorio, L., Chaix, S., Krovvidi, D.

24.05.2016

What is Welfare state?

a social system where in which a government is responsible for the economy and social welfare of its citizen and has policies to provide them with certain standards of living.

Conceptual approaches

Institutional approach:

1. Is the majority of daily routine activities devoted to servicing the welfare needs of households?

2. Differentiate between residual and institutional welfare.

3. Selection criteria to judge the state.

Market should be free from political intrusion.

Any effort to isolate the economy from political institutions will destroy human society.

Economy must be embedded in social communities in order to survive.

Polanyi sees social policy as one necessary precondition for the integration of social economy.

Political economy and the explanation of welfare state.

System (Structuralist Approach):

Conservative or Corporatist

The welfare state will emerge because modern industrial economy destroy traditional institutions such as family and church.

Anglo-saxon or Liberal.

This type of welfare state is tailor to the needs of male workers. The entailment to the welfare programs is earn through mandatory contributions to the social insurance. The propose is to prevent severe wage losses in hard times.

The most important thing is to maintain order and status.

Is the most capitalist of the three welfare system. Based in a liberal market economy in the industrial sector and a large low-wage service sector. The coordination of both sectors is left to the market.

Therefore the role of the state as income redistributor or welfare provider is minimal in comparison to the other systems.

Characteristic:

Germany, Belgium, Austria, France.

1. Women participation in the labour market low.

2. Dependence of social contributions.

3.Moderate income redistribution.

Higher levels of unemployment.

Characteristics:

USA, Great Britain, Australia, Japan, Canada.

1. Low de-commodification.

Sense of social rights is no strong.

2. Individualistic self reliance.

3. Means-Tested assistance.

4. Benefits cater to mostly low income individuals.

5. Entitlement rules are often strict and stigmatized and benefits are modest.

6. States encourage the market.

Scandinavian or Social Democratic.

Case Study: Germany

Changes:

Unemployment: Arbeitlosgeld I, Arbeitlosgeld II.

Helthcare: Dual system private and public insurance coverage.

Family Benefits: Parental leave up to 3 years, pay leave maximum of 14 months. Kindergeld up the 25th birthday.

Pensions: pay as you go system.

1. Promotion of private pensions.

2. Consideration of child raising time.

3. prolongation of the working age.

The social democratic welfare regime is characterize by a strong role for the state. Universal coverage and high replacement rate of tax-financed welfare schemes lead to high degree of decommodification and redistribution. formal welfare services are offered by the public sector in order to enable women to participate in the labour market.

Case Study: USA

Health care (Medicaid and Medicare).

Social Security Retirement.

Low Income Cash Assistance.

Unemployment

Disability

SNAP

Characteristics:

Denmark, Norway, Finland and Sweeden

High Taxes, high degree of income redistribution, high level of participation of women in the labour market, high standard of living, citizen trust their public system.

Case study: Sweden

Healthcare: Comprehensive healthcare, including general practitioners and specialist care, at very low cost and with high cost ceiling.

Family: Parental Leave with total of 480 days. All children who live in Sweden are entitle to child allowance, a monthly till 16. After that full time education entitled to study allowance.

Sick leave benefit: Sick leave pay around 80% the normal salary.

Unemployment benefit: Based on the previous income level. (80%)

Pension: Contribution during the working years. salary deductions. Plus occupational pension in many cases.

Changes in Sweden:

1. Aging population, older than 80 years.

2. Increase immigrant population in the last 25 years.

3. Union lost significant among of influences.

Conclusion:

There are a lot of criticism of the Three worlds of Welfare Capitalism by Esping-Andersen (1990).However Daniel Buhr thinks that it is a great stating point to Welfare State research.

Due to the fall of communist block, new types of welfare state in Central and Eastern Europe emerge, they are still in process of definition.