Welfare production regimes: A Political Economy Approach to the Welfare State

This is the first draft of the introductory chapter to a new book manuscript entitled Capitalism and Welfare: The Political Economy of Social Protection in Democratic Capitalism. It outlines a political economy approach to the study of the welfare state that emphasizes the interaction between production, skill formation, and social protection. One of the key ideas is that workers who have made risky investments in non-portable skills will demand social insurance against risks of long-term unemployment and loss of income from involuntary shifts between jobs with different skill requirements. Mediated by political parties and institutions, the approach helps explain individual differences in social policy preferences and cross-national differences in the (changing) level of social protection. It also helps account for differences in earnings inequality, gender labor market segmentation, government redistribution, and cross-national differences in employment performance.