The welfare state and relative poverty in rich Western democracies , 1967 - 1997
نویسندگان
چکیده
This study investigates the relationship between the welfare state and poverty with multiple measures of the welfare state and poverty in an unbalanced panel of 18 Western nations from 1967 to 1997. While addressing the limitations of past research, the analysis shows that social security transfers and public health spending significantly reduce poverty. Less robust evidence exists that social wages reduce poverty, while public employment and military spending do not significantly affect poverty. The welfare state's effects are far larger than economic and demographic sources of poverty. The significant features of the welfare state entirely account for any differences in poverty between welfare state regimes, and these features have similar effects across welfare state regimes. The welfare state's effects on poverty did not change in the 1990s. Sensitivity analyses show the results hold regardless of the U.S. cases. The welfare state emerges as the primary causal influence on national levels of poverty. Perennially a contentious issue, the welfare state has recently come under a storm of criticism. For the first time since inception, the generous West European welfare states appear unsustainable and possibly even counterproductive. Regarded for decades as egalitarian havens, many social democracies appeared to struggle with rigid, unproductive labor markets in the 1990s. The social democratic Sweden suffered a crisis of three straight years of negative economic growth, massive budget deficits, and high unemployment (Freeman et al. 1997). By contrast, the
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