Social Welfare and Insurance

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Young-sun Hong

The welfare state is one of those essentially contested concepts that haunt all narratives of modern society, and, as a result, even the most basic account assumes a prior interpretation of its origin, nature, and significance. Its genealogy has often been traced to the first organized measures, both public and private, to deal with the masterless, migrant poor who emerged as a distinct social group at the end of the Middle Ages as a result of the breakdown of manorial community, parish, and extended household. However, the use of the term "welfare" to describe all such efforts to meet the needs of society's weakest members over the past six hundred years inflates the concept beyond all usefulness and obscures the novelty of modern welfare systems which have developed since the 1880s and the important changes they brought about in the relationships between state, market, individual, and the family.


The origin of both the "social question" and the modern systems of poor relief, welfare, social insurance, and social security which have developed in response to it can be traced to the rise of the market society, the commodification of labor, and the increasing dependence of individual well-being on the ability to secure the necessities of life through the labor market alone. The social question has been defined, on the one hand, by the complex relationship between work and character (for example, individual responsibility, industry, and foresight) and, on the other, by concerns about the corrosive impact on family, community, and national solidarity of the growing economic insecurity of wage labor, an experience which was itself the obverse of the expansion in the economic freedom of the individual associated with the coming of the market. Welfare may be understood as an attempt (by either the state or voluntary associations) to alter the distribution of wealth and opportunity that would result from the unrestricted play of market forces in order to achieve a greater degree of equality (of outcome or opportunity); strengthen the solidarity of the community (which can be seen either as intrinsically valuable in itself or as a political necessity in an age of intensified national competition); discharge a moral obligation to protect children, the family, the sick, the elderly, and the unemployed; increase the economic and/or demographic strength of the nation by insuring the fullest development of its human capital; or any number of other goals.

The development of the welfare state and its systems of social welfare, social insurance, and social security is significant for the social history of the modern West in a number of ways. These programs affect the standard of living and quality of life of a large section of the population both directly through the monetary assistance and services they provide and indirectly through their impact on the dynamics of the labor market. They redistribute both income and opportunity, and they strengthen the bonds of social solidarity upon which the legitimacy of the nation-state ultimately depends. However, this Whiggish perspective must be counterbalanced by an awareness that the provision of welfare benefits and services is never a socially neutral act. For example, there are many different ways of providing benefits to the unemployed, the sick, the elderly, or single mothers, and the specific strategies adopted to meet the perceived needs of these groups are often of greater significance than the level of benefits itself. Consequently, the various regimes of social service provision define the concrete meaning of the rights of the individual and, through this, the meaning of citizenship, the nature of the state, and the structure of individual subjectivity and experience. The most important and creative studies of welfare and the welfare state in recent years have been comparative studies of the differences between welfare systems, the heretofore hidden ways in which these systems have created and reproduced social inequalities and gender roles, the cultural assumptions underlying these systems, and the political processes that have determined their contours.


The emergence of welfare can only be understood against the horizon of—and as a reaction to—the specific forms of assistance for the poor and the laboring classes established in the nineteenth century. Up to the late nineteenth century, many members of both Christian and secular social reform circles, especially in western Europe, regarded indigence as prima facie evidence of individual moral failing, which manifested itself in sloth, improvidence, various forms of vice and deviance, and ultimately in the material and moral distress of the needy. On the basis of this individualist, voluntarist conception of poverty, two antithetical yet complementary systems for providing for the needs of the poor were established across the middle decades of the nineteenth century in Europe and the United States. While the deterrent, disciplinary public poor relief system provided the most minimal assistance under harsh and socially stigmatizing conditions in order to insure that assistance in no way undermined individual responsibility, industry, and foresight, an extensive network of voluntary charity provided supplementary aid to the deserving poor whose need was not considered to be the result of individual moral failings. In England, these policies were institutionalized by the Poor Law Amendment Act of 1834 and the formation in 1869 of the Charity Organisation Society. In Germany the model was established in 1853 by the reform of municipal poor relief in the town of Elberfeld. In France, by contrast, the Catholic Church and its associated voluntary organizations continued to be the primary provider of assistance to the needy, and France was the only west-European country without a statutory municipal assistance program until the 1890s. These programs were designed to satisfy the universally recognized moral obligation to aid the needy, but to do so in a way that would not further demoralize those persons whose indigence was already regarded as a sign of their weakness of character or impair the efficient functioning of the labor market.

Beginning in the 1880s and 1890s, this individualist conception of indigence was gradually displaced by a new social perspective on poverty, which regarded poverty less as the result of individual moral failing than as the result of social factors that lay outside the control of the individual: the unequal distribution of income; the impact of business cycles on employment levels; dangerous working conditions; unsanitary living conditions; the susceptibility of the laboring classes to the existential uncertainties of accident, old age, and illness; the financial burdens of large families (especially when coupled with the death or disability of the family breadwinner); and the inability of working-class women to shoulder the multiple burdens of work and family. This social perspective on poverty reflected the changing living and working conditions created by continued urbanization, massive migration, and the second industrial revolution. However, the resulting social dislocation acquired its immediate political resonance due to the rise of socialism among the skilled, organized factory working classes, the concern among the propertied classes that the working-class milieux were breeding moral disorder and weakening the health and physical constitution of the nation and race, and the sense that these developments were negatively impacting the unity of the nation at the very moment when economic, political, and military competition between the industrial nations of Europe and the world was reaching an unprecedented intensity.

On both sides of the Atlantic, the rise of Progressivism—with its logic of social solidarity and its concern for national efficiency—reflected the fact that industrialization and urbanization had fundamentally altered the social foundations of the prevailing individualist understanding of poverty and the minimalist, deterrent approach to charity and poor relief to which this conception had given rise. Public poor relief and voluntary charity had operated on the assumption that the public provision of services and monetary assistance—before the individual had exhausted all available resources and was faced with imminent indigence—would place a premium on sloth and improvidence and thereby fatally demoralize the working classes. The Progressives insisted that benefits to both the nation and the individual of positive public measures to prevent these new kinds of systemic poverty far outweighed the potential dangers to individual morality. Similarly, the Progressive willingness to use public power to intervene directly in social and economic relations in order to compensate for the deleterious social consequences of impersonal social forces went beyond the limits on state intervention imposed by nineteenth-century legal and social thought. A new conception (based on Progressive commitment to social solidarity and national efficiency) of social citizenship and the development of new strategies for dealing with the social question marked the birth of the modern notion of welfare and the new form of political organization that came to be known as the interventionist, social, or welfare state.

For social reformers, the many dimensions of the social problem condensed around two distinct complexes: the working-class family and the question of social reproduction on the one hand, and, on the other, the worker question and the need to combat the socialist temptation among the predominantly male, organized working classes. The development of separate social programs designed to meet the needs of each of these groups led to the crystallization of the classic two-track structure of the twentieth-century welfare state: preventive, therapeutic social welfare programs to address the perceived crisis of social reproduction and social insurance to reduce the economic and social insecurity of workers who formed the backbone of the socialist movement.


Beginning in the 1880s, voluntary organizations and municipal governments across Europe began to create an increasingly dense network of social assistance programs that were designed to extend the social rights of the urban poor by compensating for the impersonal, structural risks of working-class life. The most serious source of existential insecurity for the working classes was the lack of work. Initially, social reformers advocated rural labor colonies to discipline casual laborers, habitual malingerers, and vagrants, who were particularly prone to drink, panhandling, and petty criminality. However, the impact of projects for disciplinary social engineering for these marginal groups was limited, and in the 1880s and 1890s the "discovery" of unemployment as a systemic social problem for the solid members of the working classes pointed to the need for new departures. Labor exchanges represented an important attempt to reduce un(der)employment and the indigence of casual labor by rendering the national labor market more transparent and efficient. Also, beginning in the mid-1880s, many cities began to rely on public works projects to relieve the need of the working classes during economic downturns. Though these efforts to relieve the poor through labor exchanges and public works programs did reflect a change in spirit, their potential was limited to managing need rather than preventing it.

The first unemployment benefits were those provided on a voluntary basis by workers' friendly societies (often with subsidies provided by middle-class reformers) and by unions. The first attempt to move from such voluntary assistance to genuine insurance was taken in 1894 when the Swiss canton of Saint Gall instituted a compulsory insurance scheme, which soon faltered due to inadequate financing. The decision by the Belgian city of Ghent in 1901 to provide municipal subsidies to existing union unemployment insurance plans was more successful due to its sounder actuarial foundation. The Ghent system was emulated across much of Europe over the following decade, and the better understanding of the possibilities and the limits of such schemes powered the learning process that ultimately made possible the establishment of national unemployment insurance programs. However, the political sensitivity of support for the unemployed insured that progress in this field would be laborious and ultimately quite limited, and most countries did not take the decisive step toward unemployment insurance until after World War I.

This same period saw the proliferation of preventive, social hygiene programs to combat chronic, contagious diseases, such as tuberculosis, social problems that stemmed from poor living and working conditions, and infant mortality and related maternal health problems. The cornerstone of these programs were the maternal and infant welfare centers, which were established in many cities to couple the medical observation of newborns with the dissemination of hygienic advice to mothers. Because bottle-feeding and related digestive tract infections were the leading cause of infant mortality, these centers generally maintained close relations with municipal and/or voluntary programs that offered premiums—paid upon visits to these centers—to encourage needy mothers to nurse their children or that made sterilized milk available either free or at reduced prices to those women who could not or would not nurse their children. By 1914, many European countries had passed labor laws requiring that pregnant women not work during the weeks immediately preceding their expected due date or for a specified period after the birth of their child. However, because this legislation did not provide adequate replacement for the wages lost during this period of enforced abstention from work, expectant and nursing mothers often had no choice but to turn to municipal public assistance. This intrinsic limitation of maternal welfare programs gave rise to a broad movement on both sides of the Atlantic for the creation of mothers' pension and child benefit programs. However, these efforts generally did not bear fruit until the late 1930s and later.

Around the beginning of the twentieth century, social reformers in many European countries began to call for the establishment of school lunch and health inspection programs, which they argued were necessary for the realization of the goals of public schooling. The provision of both school lunches and school medical inspections proved to be surprisingly controversial precisely because it represented an especially clear example of the state taking over the direct provision of services that had previously been the responsibility of the family alone.

The conflict between the principles of deterrence and prevention was one of the major fault lines in the politics of welfare reform. The debate over public guardianship for children, reform schooling, juvenile justice reforms, and the entire panoply of programs aimed at abandoned, endangered, and delinquent youth raised with particular sharpness the question of the implications of preventive, therapeutic social programs for the rights of their ostensible beneficiaries. Although these measures were justified in the name of the national interest in preventing criminality and insuring the proper education of future citizens and workers, they were so controversial because they entailed the extension of state power into the sphere of family and parental authority. The necessity of intervening in the lives of endangered children before they had committed a punishable offense clearly contradicted the principles of liberal jurisprudence. The ensuing debate over the logic of prevention gave birth to a new social conception of law and to a new notion of social citizenship, in which the rights to work, health, and education were extended to the individual but coupled in an uneasy manner with positive obligation of the recipients to engage in socially useful work, actively maintain their health, insure the adequate socialization of their children, and, more generally, discharge those social obligations whose fulfillment was the primary purpose for extending these rights in the first place. However, Jacques Donzelot and Detlev Peukert have argued that, far from bringing about a real extension in the social rights of the individual, the efforts of these programs—and by extension, all preventive, therapeutic social programs—to rationalize juvenile behavior in accordance with the norms of middle-class society actually entangled the individual in a close-meshed network of surveillance and tutelage, which ultimately absorbed and negated, rather than extended, the sphere of individual freedoms.

Reformers also searched for ways to provide for specific groups of the worthy poor that would be more adequate to their real needs and entail none of the social stigma or political disabilities associated with poor relief and charity. One example is the movement for public pensions for the elderly and also for working-class mothers. A first step toward the development of pensions for the elderly was taken in 1891, when Denmark approved a plan to provide nondisqualifying monetary aid to those worthy, elderly poor who had previously led upright lives (those who had not depended on poor relief ). This movement was given additional momentum by the establishment of a non-contributory old-age pension plan in New Zealand—a member of the British Commonwealth—in 1898. France (1905) and Britain (1908) both adopted non-contributory, but means-tested old-age pensions (though in 1925 the British program was reformed in the direction of a contributory system). Sweden went even further, establishing the world's first universal, non-contributory old-age pension program in 1913. The Germans, on the other hand, were reluctant to follow this trend and instead opted to meet the needs of the elderly through an old-age and invalidity insurance program. However, due to the low level of benefits and limited coverage, the Germans still had to rely on poor relief and covert subsidies from other social insurance programs to support the worthy elderly.

The emergence of welfare measures in the late nineteenth century has generated a considerable comparative historiography dealing with such issues as the greater commitment to voluntary insurance schemes on the part of the French, versus the more systematic German approach. At the beginning of the twenty-first century this debate also focused on the differing degrees to which various welfare programs emphasized women as welfare recipients and on the emergence of aid to families as an area of particular concern. Finally, social historians continue to grapple with the issue of the impact of welfare measures in welfare's early period: What kinds of welfare measures had an effect, given the limitations in coverage—the focus on urban workers, for instance—and the range of benefits offered? Certainly, early welfare initiatives did not stem the growth of socialism and trade unions, though they did sway many socialists toward a reformist rather than a revolutionary approach.


World War I led to the exponential growth of welfare programs that, until the war, had still faced stiff opposition from the proponents of deterrence. Social programs played a vital role in solidifying the home front by counteracting the disruptive social consequences of total war and promising a greater degree of social citizenship to the working classes. After 1918 the growth of welfare programs continued to accelerate in response to the expanded public commitment of many states—often inscribed in their new constitutions—to the social welfare of their citizens, and the 1920s was a period of unprecedented intensity for major social legislation in both western and eastern Europe. However, the expansion of state social intervention was not an unmixed blessing, for the very act of identifying one social group as deserving of special public solicitude invariably created a sense of discrimination by those groups who were not included. As a result, expanded state social intervention in the interwar years tended to divide the polity as much as unify it, especially when this intervention was accompanied by the struggle for scarce resources and competition between social service providers to shape the norms informing such activity. The later 1920s witnessed a retreat from the optimism that had characterized welfare reforms over the previous decades, and this trend was reinforced by the severe financial retrenchment in the welfare sector during the Great Depression.

One of the more interesting issues in the history of social welfare in the interwar years is the role of welfare in Nazi Germany. Toward the end of the twentieth century, social welfare in Nazi Germany received intense scholarly scrutiny because it has become increasingly clear that social and welfare policies to benefit productive and racially valuable members of the national community cannot be separated from policies designed to segregate and ultimately annihilate those persons whose poverty and social deviance were regarded as evidence of their racial inferiority. Despite the undeniable continuities in welfare theory and practice across the 1933 divide, scholars continue to debate the modernity of Nazi racial policies and the legitimacy of regarding them as a variant of the modern "welfare" state.


In contrast to welfare programs for those who stood outside the labor process or were only partially integrated into it, social insurance was designed primarily to protect the organized, largely male working classes and through them also protect their families against the threat of destitution due to the risks of accident, old age, sickness, and unemployment. The predication of benefits on prior contributions limited the applicability of this strategy of social security to better-paid and regularly employed workers, primarily men employed in the skilled trades. The willingness of the propertied classes to accept the idea of a legal right to benefits depended above all on the adoption of the principle that such a right would strengthen, rather than diminish, the incentive to individual thrift and foresight, as Winston Churchill (1874–1965) insisted with regard to the British unemployment insurance system. As François Ewald has argued, it was the adoption of the technology of insurance that made it possible to transcend the rigid individualism that had dominated nineteenth-century thought in the name of a more social, solidarist worldview.

Under the chancellorship of Otto von Bismarck (1815–1898), Germany took the lead in establishing workers' insurance programs against sickness (1883), work accidents (1884), and old age and invalidity (1889). The introduction of this legislation represented a two-pronged attempt to forestall the further radicalization of the working classes. Bismarck hoped that state subsidies to the insurance funds would gain the allegiance of the workers by demonstrating the paternalistic concern of the state for their well-being and that the very existence of such insurance programs would reduce the number of instances in which these workers would be forced to turn to deterrent, discriminatory municipal poor relief. These insurance programs, and those established in other states over the following decades, were constructed on the foundation laid earlier by friendly societies, unions, and other, often semipublic insurance funds. The novelty of German social insurance legislation lay in the combination of compulsory membership and the decision to insure the actuarial soundness of the programs by initially restricting them to those skilled trades that were politically most sensitive but economically most insurable because of their relatively high wages and steady employment patterns. Although employers were required to contribute to sickness and disability insurance (and bear the entire cost of accident insurance), the redistributive impact of these programs was limited. Workers paid for their benefits in the form of contributions, and the propertied classes benefited from tax reductions loosely tied to anticipated reductions in poor relief costs. The funds were administered by workers and employers (the "social partners") on a parity basis. However, Bismarck's policies failed to stem the rise of Social Democracy in Germany, and in fact, the social insurance funds quickly became administrative strongholds of German Social Democracy.

Informed by the German experience but inspired by the transatlantic Progressive spirit that Daniel Rodgers describes in Atlantic Crossings, national insurance programs against accident, sickness and disability, and old age were established (either on a compulsory basis or through state subsidies to voluntary programs) in almost every European country by the 1930s, with most of the remaining gaps being closed immediately after World War II. (See table 1.) During these years, the existing social insurance systems were expanded to cover additional risks and include new social groups—white collar workers, self-employed and farmers, dependent family members (in health insurance, for example), and survivors (in pension insurance). By 1939, almost every west European state had introduced insurance programs that were designed to provide minimal income as security against the major causes of economic insecurity.

Unemployment insurance was usually the most controversial because it entailed the most radical break with liberal political economy. In contrast to the actuarial predictability of accident, sickness, and old age, business cycles—and therefore employment levels—were far more volatile. Moreover, insurance against unemployment was a classic example of moral hazard. And lastly, no system capable of insuring against the high levels of structural unemployment and the extraordinary economic problems of the Great Depression would have been financially feasible in any case. In 1911, Britain established the first compulsory nationwide unemployment insurance program. Although contributions by workers and employers provided the lion's share of the financial means, the state agreed to subsidize the program (though these subsidies were justified less in terms of their redistributive impact than as compensation for anticipated reduction in poor relief costs). The system was linked in an integral manner to the labor exchanges to reduce frictional unemployment and test willingness to work. The incentive to work was to be maintained by waiting periods and limits on the duration of benefits. The British example was followed by a number of other countries after World War I. However, the Great Depression forced all of these countries to retreat from a rigorously constructed system of insurance to various mixtures of unemployment insurance, assistance provided without means testing, and means-tested outdoor relief—the notorious "dole."


The immediate postwar period brought a new wave of social legislation in many European countries. The most influential document of this period was the report prepared for the British government by the economist William Beveridge (1879–1963) in 1942. The Beveridge Report proposed the creation of a national minimum benefit to guarantee freedom from want for all citizens. It also laid out the rationale for legislation on family allowance, old-age pensions, and a national health service, and it was conceptually linked to the postwar commitment by Britain and other states to full employment and Keynesian economic policies (counter-cyclical deficit spending intended to maintain a high level of aggregate demand, in contrast to older economic orthodoxies which espoused the importance of balanced budgets). The Beveridge plan had such an extraordinary resonance across the Western world because its underlying commitment to social justice appeared to hold the key to rejuvenating democratic political systems that had failed in so many respects during the 1930s. Historians have disagreed over whether this postwar wave of social reform was made possible by the expanded influence of the working classes or by Conservative acquiescence to the social programs they had fought tooth and claw before the war. In fact, Social Democratic support for social insurance marked a sharp departure from their previous insistence that such insurance was intrinsically reactionary because it failed to correct the fundamental problem of working-class distress: exploitation that deprived the worker of the full fruits of his or her labor. There was also a similar political moderation on the right, and after 1945 Tory paternalism and the Christian Democratic idea of a social market economy came together with an increasingly deradicalized socialist movement on the common ground of the welfare state. Peter Baldwin has convincingly argued that the universalist, egalitarian social insurance schemes developed in the Scandinavian states and, in part, in the Beveridge system were based not on the weakening of prewar class antagonisms and the acceptance of redistributive social insurance programs, but rather on the incorporation of the middle classes into the welfare system in ways that allowed them to benefit from the socialization of risk while limiting the redistributive burden imposed upon them.

As with every other major welfare program, the movement for family and child allowances had developed in an ad hoc, experimental manner before World War I, but the idea achieved widespread acceptance only from the 1930s. France (1913) was the first country to establish a nationwide system of family allowances, though most U.S. states established similar programs between 1911 and 1919. During the 1930s, Sweden established child allowance and maternity benefit programs, financed through general revenues. Family allowances were regularized as part of the broad expansion of social services in every country after 1945.

By the postwar period at the very latest, most of the states of Western Europe had developed a fairly Text Not Available similar network of social insurance programs. Together, social services and social insurance provided a minimal degree of economic security and insured the needy at a minimal level necessary for them to be considered full-fledged members of the national community. A shift in the development of the welfare state came between the mid-1950s and the early 1970s. During this period, social insurance was extended from workers to the middle classes and the goal of these programs shifted from minimalist income replacement and the equalization of the most egregious class differences of industrial society to the active promotion of the highest quality of life for all citizens in order to give more substance to the idea of social citizenship. To achieve this goal, income maintenance programs became nearly universal, and their benefit levels were constantly improved. Pensions were reformed (Germany, 1957) so that benefits for present retirees reflected real increases in productivity and income, rather than past contributions; this permitted retirees to participate in the postwar economic boom and maintain their relative standard of living, rather than simply satisfy their basic needs. Unemployment benefit systems became less restrictive, and benefits became more generous. Child allowances became increasingly universalistic and were gradually uncoupled from need. The compensation for actual loss of income was increasingly supplanted by preventive measures to forestall the risk through health services, occupational training and rehabilitation, and education, while the scope and quality of all of these services—especially medical care and education—expanded steadily. In England, the victory of prevention over compensation was symbolized by the replacement of contributory national health insurance with a universal, tax-based national health service in 1948. All of these factors contributed to the constantly increasing rate of growth in social spending from the late 1950s through the 1970s. During the postwar decades, the creation of a more comprehensive, more universalist, more solidarist system of social services devoted to the prevention of need and the active promotion of higher standards of living and quality of life all came together to form that new system of welfare known as social security.

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To affirm the existence of broad trends is not to say that all welfare states and systems are the same. The act of choosing between the various means available for meeting a perceived need always reflects an understanding of the nature of the problem as determined by previous policy precedents, political and cultural traditions, economic and social trends, prevailing perceptions of gender roles, state administrative capacities, and the prevailing balance of political forces. These differences were largely ignored in the first generation of comparative research on the welfare state, which regarded aggregate public social spending as the key to understanding the development of the welfare state.

The most influential comparative analysis of the different forms of the postwar welfare state is the typology of welfare state regimes developed by Gøsta Esping-Andersen in The Three Worlds of Welfare Capitalism (1990). This ideal typology is based on the manner and extent to which welfare systems emancipate the individual by de-commodifying labor, the patterns of income redistribution and social stratification created by these programs, and the relationship between the state, the market, and the family implied by these programs.

The liberal or residual welfare state is based on a dual system. For the majority, individual welfare is to a large degree determined by the play of market forces. For those persons who cannot satisfy their basic needs through the labor market, minimal transfer payments (such as the American Social Security system) and limited entitlements and means-tested public assistance are provided. Such programs do little to reduce social inequalities. The United States, Canada, and Australia are the archetypical examples of this type of welfare regime.

In contrast, in conservative, corporatist welfare states the state plays a much larger role in promoting social security. However, the purpose of this state intervention is not to promote equality, but rather to insure social security in a way which will preserve existing status and income differentials between occupational groups. This type of welfare regime is often described as a "pillared" system because separate health care, retirement, and so on exist for each major occupational group. Benefits are of necessity related most directly to earnings and contributions (rather than citizenship or need), and they are usually determined as a percentage of earnings. Premiums are paid by both employers and employees, and the management of such programs is generally devolved onto the social partners on a parity basis. Occupational benefits are supplemented by means-tested public assistance for those outside the labor force. Family members are generally covered through the breadwinner, rather than each individual member being eligible for benefits in his or her own right by virtue of his or her status as a citizen. The religious, socially conservative nature of this regime type is reflected first in its commitment to the preservation of traditional family structures and discouragement of female labor-force participation, and second in its insistence that public social service providers intervene in a subsidiary manner only if voluntary or confessional agencies are unable or unwilling to provide necessary services to the family or individual. This corporate regime has developed most fully in Germany, which has a strong statist tradition, and in Austria, France, Italy, and the Benelux countries, whose welfare systems have been deeply influenced by social Catholicism.

The third welfare state regime, which is identified most closely with Scandinavian—especially Swedish—Social Democracy, is characterized by the fusion of a high degree of universalism and an equally high degree of de-commodification. Its primary policy goal is less to compensate for the loss of income than to promote a higher standard of living and a more fulfilling way of life for all citizens. This was necessary in order to give substance to the idea of social citizenship and meet the political challenge of capturing the support of the new middle classes for such a solidaristic system. In this Scandinavian system, all occupational and social groups enjoy identical rights and participate in a single universal system, though benefits are graduated according to actual earnings. This system was built on the foundation of the proto-Keynesian ideas developed by Swedish Social Democracy in the 1930s. In addition, by providing grants directly to children and assuming direct responsibility for caring for children, the elderly, and the disabled, the Scandinavian welfare system diverges from the male breadwinner model to a greater extent than in most other states by meeting the needs of these persons in a way that makes it possible for women to choose between work and household.

Not all countries fit neatly into this classificatory schema. From the end of World War II until 1979, Britain was a hybrid mixture of the universalism most closely identified with the Social Democratic model and the low level of benefits (which is the correlate of financing through general tax revenues) characteristic of the liberal, residual model. However, the precise balance of this mixture shifted in the liberal direction under the prime ministers Margaret Thatcher and John Major. Also, some people have suggested that the states of southern Europe, including Spain, Portugal, Greece, and Italy, constitute a fourth regime. In these states, welfare services are provided primarily by church, family, and voluntary organizations, rather than the state, and the systems are marked by fragmented coverage and uneven distribution among occupational groups.


The mirror image of the dynamic Swedish model was to be found in the Soviet Union and other communist states of postwar Eastern Europe. Under communist rule the right to work was constitutionally guaranteed, and the integral connection between economic and social policy that was forged in postwar Western Europe by Keynesian fiscal policy was made in communist systems by centralized state planning for industrial production and full employment. The model of forced industrialization and agricultural collectivization that was implemented in the Soviet Union by Stalin and, later, the communist parties of Central and Eastern Europe, did bring about a rapid increase in productivity and income in these relatively backward regions during the first decades of communist rule. This spurt in economic development made possible real improvements in virtually every area of social security in comparison to the precommunist era.

From the 1930s, social services in the Soviet Union were linked to the performance of that productive labor which was deemed essential to the construction of socialism, and a substantial proportion of social services in the Soviet Union and its East European empire were provided through the workplace, including housing, health care, child care, leisure and cultural activities, and vacation facilities. These services were not fringe benefits, but a necessary complement to wages that were set at an artificially low level in accordance with the dictates of central economic planning. In theory at least they obviated the need for any separate welfare programs except for those persons who were never fully integrated into the labor process. In addition, these communist states also promoted public welfare through substantial state subsidies of basic consumer goods and services, such as food, housing, transportation, energy, and health care.

However, these initial developments were impressive only in relation to the low level of previous social programs in these regions. The institutionalization in the 1950s and 1960s of an industrial model based on abundant unskilled labor, outdated technology, and productivity that stagnated at a low level could not sustain the long-term improvements in social security beyond the level reached during the initial spurt. The welfare systems of communist Europe also suffered from a number of structural problems. The ambitious commitment of these states to the welfare of their citizens led in practice to the extensive growth of a social service system that was so inefficient and so systematically starved of resources that it was often incapable of providing an even minimal level of basic services to all. Housing shortages, the frequent absence of basic medical equipment in polyclinics, and low pension rates were the most egregious examples of this dysfunctionality. The ensuing shortages created the opportunity for corruption and the temptation to allocate scarce social services on the basis of bribery, nepotism, and/or patronage. In the paternalistic "welfare dictatorships" of communist Europe, everything was done by the party state for the people, who were systematically excluded from the formulation of welfare policies and who had no legally enforceable right to challenge the decisions of the state. The right to social services was limited to individual conformity to the system, creating a vast potential to instrumentalize control over scarce social services for political ends—to reward those groups loyal to the regime and to punish opponents. Despite the state's commitment to the prevention of need, the development of the welfare system was subordinated to the imperatives of production. This, together with the limited scope for public opposition, led the governments of the Soviet Union and Eastern Europe systematically to injure the health of their populations "by requiring work in health-damaging environments, by polluting the earth and atmosphere, and by presiding over a social system that indirectly encouraged alcoholism, unhealthy diet and suicide" (Deacon, p. 3). The negative impact of these trends was even more severe because of the ideological insistence that these societies had already attained a level of development at which the class tensions and contradictions of bourgeois society had been overcome. This view prevented communist policy makers from recognizing the new social, economic, and cultural problems created by the postwar transformation of these societies and developing social policies to meet the challenges posed by these developments.

The combination of political alienation and the inability to redeem those social promises on which communist regimes based their claim to the superiority of their system were major factors in the eventual collapse of communism. In the late-twentieth-century period of transition toward parliamentary democracy and capitalism (at least in most former communist countries), state policy makers faced a sharp dilemma. The legitimacy of these new states rests to no small degree on their promise that capitalism will finally make good on those welfarist promises made by the communists. Yet it is difficult to resolve the contradiction between the fiscal constraints imposed by market-oriented reforms and the pressing need for social services to buffer the consequences of inflation and unemployment. Postcommunist governments have begun to turn their attention to social policy, and the politics of social policy in these states will be shaped by a variety of factors: macroeconomic conditions, institutional legacies from the communist period, precommunist social policy traditions, the ideological orientation of the governing parties, and the structure of the political system within which they operate. However, it is still too early to predict with any accuracy how the welfare systems in these states will evolve in the twenty-first century.


Family policies have been explicitly based on assumptions concerning gender roles. The specific social rights established by welfare programs depend upon whether the beneficiary is regarded primarily as a worker or a citizen, a man or a woman, a father or a mother, the family breadwinner, the family caregiver, the guardian of domesticity, or as the mother of a new generation.

European feminists initially advocated mothers' pensions and family allowances because they hoped that such programs would expand the rights and choices available to women as citizens, regardless of their marital status, and enhance their independence either by recognizing the social value of unremunerated domestic labor and compensating them for it or by freeing them to pursue work outside the household. However, the family policies of most European welfare states have been based fairly explicitly on the ideal of the male breadwinner and stay-at-home housewife. The primary aims of family allowances have been the elimination of children's poverty and/or the promotion of state population policy, not the provision of an alternative to the male breadwinner model. In contrast, the maternity and family policies of the Scandinavian countries have gone the furthest toward extending the rights of women as citizens, rather than in their capacity as mothers.

Esping-Andersen has been criticized by feminist historians, who argue that essential aspects of women's experience within the welfare state are systematically obscured by his gender-blind analysis of work and welfare. More specifically, they point out that, given prevailing patterns in the sexual division of labor, the de-commodification of women's labor has generally led to the restriction of women to the domestic sphere where, secondly, they become primary yet unremunerated providers of welfare services to others. This reflects the fact that most welfare programs were originally designed to reinforce the family wage system and, therefore, had a distinctly paternalist character. Consequently, while de-commodification of labor has been regarded as an important indicator of emancipation for men, these critics argue that for women de-commodification has not led to greater economic independence or enhanced the social citizenship rights available to them outside of marriage.

In the 1990s, feminist historians made important steps toward a fuller incorporation of gender as an independent analytic dimension in accounts of the welfare state. Ann Orloff has, for example, suggested that any adequate description of welfare systems must take into account the extent to which they promote women's access to paid labor and establish those rights necessary for them to maintain an autonomous household independent of their roles as wives and mothers. Other writers have argued that the analysis of gender and the welfare state must focus on "caring regimes," which determine the ways in which the family influences the structure of the labor market by means of the unpaid provision of welfare by women rather than analyzing the relationship between paid and unpaid labor.


The post-1945 consolidation of the welfare state in Western Europe led to steadily accelerating growth in social spending. By the mid-1970s total social spending amounted to between one-fourth and one-third of the gross national product in most western welfare states, and it substantially exceeded this latter proportion in some countries. In the 1970s, this accelerating growth came to an abrupt halt. It appeared that the growth of the welfare state had reached its limits though it was not clear whether this was due to external fiscal constraints or whether the internal forces which had propelled this growth had been exhausted. Conservatives argued that the welfare state had become "ungovernable" because the responsiveness of democratic government to popular political pressures was leading to unsustainable levels of public social spending. Neo-marxists, on the other hand, attributed the looming crisis to the heightening contradiction between the need for ever-greater social spending (to reconcile the laboring classes to the continued existence of capitalism and/or socialize the costs of the reproduction of labor which would otherwise have to be borne by capital alone) and the requirements of the accumulation of capital.

The economic crisis of the 1970s led to substantial cuts in social spending in almost every country. These retrenchment measures did not lead to the abandonment of the basic features of the existing welfare regime in any country. Retrenchment strategies included such measures as increasing contributions and tightening the connection between benefits and contributions in Bismarckian-type welfare systems; restricting eligibility through greater use of income- and means-testing in flat-rate, Beveridgean systems; increasing co-payments; combining reductions in basic benefits with greater use of means-tested supplements to target expenditure on those who need it most; and changing complex formulas in order to alter conditions and costs of retirement programs.

In Britain and the United States, the Thatcher and Reagan administrations used the economic crisis as a springboard for a broad ideological attack on the welfare state consensus that had prevailed in both countries since the 1940s. However, despite their initial hopes, the Thatcher administration was able to make only incremental changes rather than effect a root-and-branch reform of social service provision. For example, the 1986 Social Security Act in Britain did not bring about the wholesale transfer of pension provison from the state to the private sector, but rather implemented several measures designed to make private pensions more appealing while at the same time making it easier to opt out of the public pension system. The effect of this legislation was to shift the British welfare system toward the liberal, residual model. The plan put forth by the French prime minister Alain Juppé in 1995 was based on an eclectic mixture of policy principles. On the one hand, he proposed transforming the corporatist organization of the national health insurance system into a universalist public health system along the lines of the British model. On the other hand, the increased reliance on means-testing to target family allowances moved in the opposite direction from that universalism which he was trying to establish in the health care system.

Three important socioeconomic forces have been driving European welfare reform since the 1980s. First, the aging of the population and the emergence of new family structures and patterns of labor market participation are creating new needs and altering the patterns of work, family, and gender upon which Western welfare states have rested. In addition, the aging of the population is leading to higher expenditures for pensions and health care, and these fiscal pressures are further intensified by the corresponding reduction in the ratio of active workers to the retired population.

Second, the political economy of the postwar welfare state in Western Europe was altered by the emergence of a new industrial regime, which was based on a more flexible organization of production through electronically controlled machines operated by increasingly highly skilled and highly paid workers, dependence on continuously accelerating technological innovation, and new forms of corporate structure to manage these processes. From 1945 through the 1980s, the state linked the interests of organized capital and labor in a program of full employment and social welfare. Changes in the organization of production have distinct implications for the Keynesian welfare system.

This reorganization of production cannot be separated from a third major force: economic globalization and the increasing integration of the European nation-states into the European Union. The enforced harmonization of social policies is an essential element of the logic of European integration, and the necessary changes put pressure on those national compromises concerning wages and social spending which had been the foundation of the Keynesian welfare state. By making the boundaries of the national economic and social space more porous and subject to the disruptive effects of international economic competition, globalization increases the demand for social programs to cushion the population against these disruptions at the same time that the pressures of international competition are diminishing the capacity of the state and industry to pay for these programs. The disjunction between the global scale of production and the national provision of welfare has even been pulling at the solidarist glue that has held the European welfare systems together for the past half-century.

See alsoThe World Wars and the Depression; Since World War II (volume 1);The Life Cycle; The Welfare State; Communism (volume 2);The Family and the State; Motherhood; Widows and Widowers; The Elderly (volume 4);Working Classes; Labor History: Strikes and Unions; Socialism (in this volume); and other articles in this section.


Alber, Jens. Vom Armenhaus zum Wohlfahrtsstaat: Analysen zur Entwicklung der Sozialversicherung in Westeuropa. Frankfurt and New York, 1982. An influential version of the logic of industrialization approach to the welfare state.

Amin, Ash, ed. Post-Fordism: A Reader. Oxford and Cambridge, Mass., 1994.

Baldwin, Peter. The Politics of Social Solidarity: Class Bases of the European WelfareState, 1875–1975. Cambridge, U.K., and New York, 1990. An influential, critical reinterpretation of the class account of the growth of the welfare state.

Bock, Gisela, and Pat Thane, eds. Maternity and Gender Policies: Women and theRise of the European Welfare States, 1880–1950. London and New York, 1991.

Bonoli, Giuliano. The Politics of Pension Reform: Institutions and Policy Change inWestern Europe. Cambridge, U.K., 2000.

Bradshaw, J., J. Ditch, H. Holmes, and P. Witeford. "A Comparative Study of Child Support in Fifteen Countries," Journal of European Social Policy 5:3 (1993): 175–197. Constructs a typology of welfare state regimes from the perspective of the provision of child benefits.

Briggs, Asa. "The Welfare State in Historical Perspective." In The Collected Essays of Asa Briggs. Volume 2. Champaign-Urbana, Ill. 1985. Pages 177–211. Originally appeared in the European Journal of Sociology 2 (1961).

Canning, Kathleen. Languages of Labor and Gender: Female Factory Work in Germany, 1850–1914. Ithaca, N.Y., 1996. The most ambitious attempt to redefine the social question as a question of gender and family rather than class.

Childs, Marquis William. Sweden, the Middle Way. Rev. ed. New Haven, Conn., 1947.

Deacon, Bob, ed. The New Eastern Europe: Social Policy Past, Present, and Future. London, 1992.

Dingwall, Robert, and Anna Kwak, eds. Social Change, Social Policy, and Social Work in the New Europe. Hants, U.K., and Brookfield, Vt., 1998.

Donzelot, Jacques. The Policing of Families. Translated by Robert Hurley. New York, 1979.

Eghigian, Greg. Making Security Social: Disability, Insurance, and the Birth of theSocial Entitlement State in Germany. Ann Arbor, Mich., 2000.

Esping-Andersen, Gøsta. The Three Worlds of Welfare Capitalism. Princeton, N.J., 1990. The most influential typology of welfare state regimes based on the comparative study of pensions and labor market policies.

Esping-Andersen, Gøsta, ed. Welfare States in Transition: National Adaptations inGlobal Economies. London, 1996.

Ewald, François. L'État Providence. Paris, 1986. A difficult but pathbreaking Foucauldian interpretation of how social insurance and the technology of risk made possible the transition from a liberal, individualist approach to poverty to a social, solidarist one.

Ferrara, M. "The 'Southern Model' of Welfare in Social Europe." Journal of European Social Policy 6:1 (1996): 17–37.

Flora, Peter, ed. Growth to Limits: The Western European Welfare States since WorldWar II. 4 vols. Berlin and New York, 1986–1988. Volume 4 contains exhaustive detail on the history and structure of the different programs in the various states covered by the book.

Flora, Peter, et al. State, Economy, and Society in Western Europe, 1815–1975: AData Handbook in Two Volumes. Volume 1: The Growth of Mass Democracies and Welfare States. Frankfurt, 1983.

Flora, Peter, and Arnold J. Heidenheimer, eds. The Development of Welfare States inEurope and America. New Brunswick, N.J., 1981. The most influential version of the logic of industrialization interpretation of the welfare state.

Garland, David. Punishment and Welfare: A History of Penal Strategies. Brookfield, Vt., 1985. Excellent account of the variety of social-scientific discourses brought to bear on the problem of poverty and deviance in conjunction with the development of a social perspective on poverty.

Gordon, Linda, ed. Women, the State, and Welfare. Madison, Wis., 1990.

Götting, Ulrike. "Destruction, Adjustment, and Innovation: Social Policy Transformation in Eastern and Central Europe." Journal of European Social Policy 4:3 (1994): 181–200.

Heclo, Hugh. Modern Social Politics in Britain and Sweden: From Relief to IncomeMaintenance. New Haven, Conn., 1974.

Hong, Young-sun. Welfare, Modernity, and the Weimar State, 1919–1933. Princeton, N.J., 1998.

Jones, Catherine, ed. New Perspectives on the Welfare State in Europe. London and New York, 1993.

Köhler, Peter A., and Hans F. Zacher, eds. The Evolution of Social Insurance, 1881–1981: Studies of Germany, France, Great Britain, Australia, and Switzerland. London, 1982.

Kornai, János, et al., eds. Reforming the State: Fiscal and Welfare Reform in Post-Socialist Countries. Cambridge, U.K., 2001.

Koven, Seth, and Sonya Michel, eds. Mothers of a New World: Maternalist Politics and the Origins of Welfare States. New York, 1993.

Lewis, Jane. "Gender and the Development of Welfare Regimes." Journal of European Social Policy 2 (1992): 159–173. Develops a typology of welfare regimes based on an analysis of the welfare effects of paid and unpaid labor.

Lewis, Jane. "Gender and Welfare Regimes: Further Thoughts." Social Politics 4:2 (Summer 1997): 160–177, and the responses on 177–207. An influential argument for the incorporation of gender as an independent analytic category in the interpretation of the welfare state.

Lewis, Jane, ed. Women and Social Policies in Europe: Work, Family, and the State. Brookfield, Vt., 1993.

O'Connor, Julia, and Gregg Olsen, eds. Power Resources Theory and the Welfare State:A Critical Approach: Essays Collected in Honor of Walter Korpi. Toronto, 1998.

Offe, Claus. Contradictions of the Welfare State. London, 1984.

Orloff, Ann Shola. "Gender and the Social Rights of Citizenship: The Comparative Analysis of Gender Relations and Welfare States." American Sociological Review 58 (1993): 303–328. An important analysis of the limitations of gender-blind interpretations of welfare state regimes.

Palier, Bruno, ed. Comparing Social Welfare Systems in Europe. [France] Mission Recherche et Experimentation, Ministère des Affaires sociales. 3 vols. to date [1996–]. The most recent major comparative survey of welfare programs and practices across Europe.

Pedersen, Susan. Family, Dependence, and the Origins of the Welfare State: Britain and France, 1914–1945. Cambridge, U.K., and New York, 1993.

Peukert, Detlev. Grenzen der Sozialdisziplinierung: Aufstieg und Krise der deutschenJugendfürsorge, 1878–1932. Cologne, Germany, 1986.

Pierson, Paul. Dismantling the Welfare State? Reagan, Thatcher, and the Politics ofRetrenchment. Cambridge, U.K., and New York, 1994.

Rhodes, Martin. "Globalization and West European Welfare States: A Critical Review of Recent Debates." Journal of European Social Policy 6:4 (1996): 305–327.

Ritter, Gerhard Albert. Social Welfare in Germany and Britain: Origins and Development. Translated by Kim Traynor. New York, 1986.

Rodgers, Daniel T. Atlantic Crossings: Social Politics in a Progressive Age. Cambridge, Mass., 1998.

Rosanvallon, Pierre. The New Social Question: Rethinking the Welfare State. Translated by Barbara Harshav. Princeton, N.J., 2000.

Sainsbury, Diane, ed. Gender and Welfare State Regimes. Oxford and New York, 1999.

Sainsbury, Diane, ed. Gendering Welfare States. London, 1994.

Shalev, Michael. "The Social Democratic Model and Beyond: Two 'Generations' of Comparative Research on the Welfare State." Comparative Social Research 6 (1983): 315–351. An important critique of the logic of industrialization and class interpretations of the welfare state.

Thane, Pat. Old Age in English History: Past Experiences, Present Issues. Oxford, 2000.