IREF Europe - Institute for Research in Economic and Fiscal issues

Fiscal competition
and economic freedom


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Fiscal competition and economic freedom
https://en.irefeurope.org/1400



The contractual approach to welfare state reform
By Sergio Beraldo

WP 2020-04.

In the last three decades, the mainstream perspective to welfare policy design has emphasized the role of personal responsibility. The stress on personal responsibility has materialized through an obligation to stay active in the labour market. Benefit claimants are entitled to support only if they register for job action plans or provide evidence that they are actively looking for a job, and since the OECD Jobs study (1994), behavioural requirements and sanctions have become the standard tool to enforce responsibility of claimants.

In this paper, I examine two issues. First, I try to identify country specific factors that might have played a role in stressing the role of personal responsibility. Second, I investigate whether the mainstream perspective based on personal responsibility has wiped off traditional differences between welfare models.
By resorting to a dataset built from different sources, I use regression and cluster analyses to address these issues. The results suggest that path dependency has governed the adaptation of national welfare systems to changes in the social and economic conditions in the last three decades. However, the traditional models continue to prevail. Moreover, the evidence suggests that the emphasis on personal responsibility was mainly driven by public-finance conditions, rather than by a deliberate attempt to design welfare policies in accord with a responsibility framework.

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