The politics of postindustrial welfare statesExplaining cross-national variation in the adaptation to new social risks

Giuliano Bonoli

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 2 |

The late 2000s: a new « consensus » for the welfare state

The 2000s have seen the emergence of a new

« consensus » on social policy

It puts emphasis on “social investment”

Defended by international organisations, and,

within countries, different political forces

Countries have moved in this direction, but at a

different speed and with different results

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 3 |

Uneven progress towards the new welfare state

Nordic welfare states have been considerably more

successful in adapting the social investment model

Continental European welfare states are lagging

behind

Puzzle: why, in spite of the strong consensus on the

social investment model, is progress uneven?

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 4 |

Examples of old and new social policies

Old

- Pensions

- Survivors benefits

- Short term unemployment

benefits

- Sickness benefits

- Invalidity benefits

New

- Active labour market

policies

- In work benefits

- Child care services

- Family benefits

- Parental leave

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 5 |

It is justified to distinguish between two sorts of social policies, because:

1. They constitute responses to different social

transformations (industrialisation/

postindustrialisation)

2. They have different objectives

(decommodification/ labour market participation)

3. They target different groups

4. Why not?

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 6 |

How do we explain divergence?

Politics: Social vs. Christian democracy Vs. Liberals

The relative timing of postindustrialisation, ageing

and welfare state maturation

Left power with economic openness

The influence of women

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Spending on old and new polices as a % of GDP, averages 1997-2001

2.00 4.00 6.00 8.00

Spending on NSR polices

7.50

10.00

12.50

15.00

17.50

AUS

AB

CAN

DK

FINF

D

I

NL

NZ

N

P

E

S

CH

UK

US

Source: OECD SOCX 2004

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 8 |

The timing of key postindustrial developments in 18 OECD countries

Service employment

as a % of total civilian employment

Female employment rate, as a proportion of

the 15-64 population

Divorce rate (divorces per 100

marriages)

Average benchmark year

Benchmark (Swedish level in 1970)

54% 58% 30

Year in which the Swedish 1970 level was reached (benchmark year) Sweden 1970 1970 1970 1970 Denmark NA 1971 1972 1972 Norway 1972 NA 1981 1977 Finland 1983 1982 1976 1980 UK 1975 1988 1975 1979 US <1970 1984 <1970 1975 Canada <1970 1987 1978 1978 Australia <1970 1995 NA 1982 New Zealand 1978 1988 NA 1979 Germany 1986 2001 1981 1989 France 1978 >2003 1982 1988 Netherlands NA 1998 1981 1990 Switzerland 1980 1987 1980 1982 Belgium NA >2003 1984 1993 Austria 1988 1994 1982 1988 Italy 1985 >2003 >2003 1994 Spain 1989 >2003 >2003 1996 Portugal 1992 1990 >2003 1995

Source: Based on OECD Statistical compendium

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 9 |

Relationship between the average benchmark year and spending on new social risk polices, 1997-2001

1970.00 1980.00 1990.00

Average benchmark year

2.00

4.00

6.00

8.00

AUSA BCAN

DK

FIN

FD

I

NL

NZ

N

PE

S

CH

UK

US

Source: Based on OECD Statistical compendium

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 10 |

Alternative explanations 1: the strength of the left

0.00 25.00 50.00 75.00 100.00

Weighted left cabinet shares 1996-2000

2.00

4.00

6.00

8.00

AUSA BCAN

DK

FIN

FD

GR

I

NL

NZ

N

PE

S

CH

UK

US

Source: OECD SOCX and Armingeon et al. CPDS

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 11 |

Alternative explanation 2: the strength of the Christian democrats

0.00 25.00 50.00 75.00

Weighted Christ. Dem. cabinet share, 1996-2000

2.00

4.00

6.00

8.00

AUS ABCAN

DK

FIN

FD

GR

I

NL

NZ

N

PE

CH

UK

US

Source: OECD SOCX and Armingeon et al. CPDS

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 12 |

Alternative explanation 3: Catholicism

0.00 25.00 50.00 75.00 100.00

Percentage of Catholics, late 1990s

2.00

4.00

6.00

8.00

AUS ABCAN

DK

FIN

FD

I

NL

NZ

N

PE

S

CH

UK

US

Source: OECD SOCX and www.adherents.com

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 13 |

Competing explanations: correlation matrix

Average benchmark

year

Percentage of Catholics, late

1990s

Weighted Christ. Dem.

cabinet share, 1996-2000

Weighted left cabinet shares

1996-2000

Percentage of Catholics, late 1990s

.866**

N 18 18

Weighted Christ. Dem. cabinet share, 1996-2000

.576* .521*

N 17 17 Weighted left cabinet shares 1996-2000

-.157 -.113 -.294

N 18 18 18

Spending on new social risk policies, 1997-2001

-.566* -.509* -.259 .465*

N 18 18 18 19 ** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed).

Source: see previous slides

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 14 |

Alternative explanation: catching upIncrease in spending on the new polices in the 1990s

and spending in 1987-1991

0.00 2.00 4.00 6.00 8.00

Spending on NSR policies, 1987-1991

0.00

1.00

2.00

AUS

B

CAN

DK

FIN

F

D

I

NL

NZ

N

PE

S

CH

UK

US

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 15 |

Unpacking the timing hypothesis: a crowding out effect

It is not time per se that matters, but the different

configurations of variables that one finds at

different points in time

This can be conceptualised as a crowding out effect

We can expect spending on old policies at time t to

impact on spending on new policies at time t+ 1

We need to control for total social expenditure

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 16 |

Pooled time series analysis of spending on childcare and ALMPs

ALMPs: spending data 1981-2003 * 21 OECD

countries, time t

Childcare: spending data 1996-2003 * 23 OECD

countries, time t

IV: strength of the Left, Christian democracy, trade

openness, proportion of women in parliament,

spending on old age (+ controls), at time t-1

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 17 |

Prais-Winsten Regression of spending on ALMPs, 1981-2003.

Model 2 Model 3

Left parties -0.0050** -0.0021

Religious parties 0.0039** 0.0016

Trade openness 0.0018 0.0023*

Left parties * trade open. 0.00011** 0.0000

Spending on old age -0.0564***

Public social expenditure 0.0727***

Unemployment rate 0.0187** -0.0013

p.c. GDP in PPP (1000) 0.0002 -0.0001

Common Rho 0.84 0.76

R-square 0.09 0.33

N 404 380

Source: G. Bonoli, The Political Economy of Activation, Lausanne, IDHEAP, Working paper No. 1/2008, available on www.idheap.ch/ps

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 18 |

Prais-Winsten Regression of spending on family services, 1998-2003.

Model (1) Model (2)

Female employment rate .009*** .014***

Left parties in parliament .006** .001

Religious parties -.007*** -.012***

Women in parliament .023*** .009***

Spending on old age - -.040***

Public social expenditures - .095***

Common Rho .737 .647

R-square .51 .70

N 138 138

| ©IDHEAP – giuliano.bonoli@idheap.unil.ch | | 20/04/23 | | Diapositive 19 |

Conclusions ?

We clearly need a multicausal explanation to account for the divergence

Timing matters, through an institution-induced crowding out effect

Politics also matters. But we need a more complex understanding of politics.

Left parties are not identical across countries Need to focus on new cleavages (gender, age)