Download Feb. 23

U.S. Social Policy in Comparative Perspective
I. SCOPE: The Rise of the Welfare State
II. INSTRUMENTS: How to Support What People?
III. DISTRIBUTION: Who Pays for How Much?
IV. REFORM: Contemporary Challenges for the Welfare State
I. SCOPE: The Rise of the Welfare State
A. Role of Labor Unions
– effort to reduce unemployment & provide benefits to workers through political process
B. Role of Political parties
– effort to pull in votes from varied constituencies amid universal suffrage & rise of mass
politics
– once covered, groups fight to stay covered
C. Role of “Functionalism”
– effort to preserve and promote capitalism
– business interests often served by having workers’ benefits supported by a broader public
program
D. The Modern Welfare State
– Over the course of the 20th century, industrialized democracies developed public policies
regarding:
unemployment insurance
disability insurance
family policy
– family leave, day care, family allowances
(targeted) assistance to the poor
old-age pensions
health insurance
II. INSTRUMENTS
A. Social Insurance: taxes or premiums leading to an entitlement triggered by
circumstances
– pensions, UE, disability, Medicare until 2003
B. Public Assistance: means-testing to qualify for benefits
– Medicaid, food stamps
C. The U.S. in Comparative Perspective
– more limited benefits & more means-testing: visibly less social spending in U.S.
– far fewer transfers, but more tax expenditures
table on Social Policy Models (2005)
CHILD
ALLOWANCES
CHILD CARE
FUNDING
PAID FAMILY
LEAVE POLICY
UNEMPLOYMENT
INSURANCE
CANADA
MT
PRIVATE > PUBLIC
MATERNITY;
PARENTAL
SI
FRANCE
SI
PUBLIC > PRIVATE
MATERNITY;
PARENTAL
MIXED
GERMANY
MIXED
PUBLIC > PRIVATE
MATERNITY;
PARENTAL
MIXED
ITALY
MT
PUBLIC > PRIVATE
MATERNITY;
PARENTAL
SI
JAPAN
MT
PRIVATE > PUBLIC
MATERNITY;
PARENTAL
SI
SWEDEN
SI
PUBLIC > PRIVATE
MATERNITY;
PARENTAL
SI
UNITED KINGDOM
MIXED
PRIVATE > PUBLIC
MATERNITY
SI
UNITED STATES
MT
PRIVATE > PUBLIC
NONE
SI
NOTE: SI = social insurance; MT = means-tested; MIXED = mix of SI & MT
table on RELATIVE POVERTY & SOCIAL POLICY (2000)
% IN RELATIVE
SOCIAL SPENDING as a % of
POVERTY
GROSS DOMESTIC PRODUCT
CANADA
10.3
5.8
FRANCE
6.0
9.2
GERMANY
8.0
7.3
ITALY
11.5
4.3
JAPAN
13.5
2.2
SWEDEN
5.1
11.6
U.K.
8.7
7.0
U.S.
13.7
2.3
III. DISTRIBUTION: Who Pays for How Much?
A. Individual Equity:
– pay now, collect in accord w/ your own contributions
e.g. privatization of old-age pensions via mandatory individual investment accounts
B. Basic Needs/Rights:
– minimum standard for all  collect revenues and redistribute somewhat
e.g. old-age pensions based on payroll taxes invested into government bonds
IV. REFORM: The Welfare State under Challenge
A. Harmonizing Competing Pressures
– AGING (re: pensions, health care, etc.)
fewer contributors per beneficiary
– GLOBALIZATION & “LABOR DUMPING”
a desire to lower payroll taxes to reduce total labor costs
– POTENTIAL DISINCENTIVE EFFECTS
e.g. “workfare” issue
– DESIRE FOR FLEXIBLE PUBLIC BUDGETS
potential problem of entitlement lock-in
– SHIFTING POLITICAL COALITIONS
amid government deficit worries, groups change alliances to argue that others should
receive less...
B. Reactions to Pressures
– SLOWER GROWTH OR DECLINES IN SOCIAL SECURITY BENEFITS
– CONTRIBUTION RATE HIKES
– INCREASED RETIREMENT AGE
– CUTS TO POLITICALLY VULNERABLE TRANSFER PROGRAMS
i.e. means-tested & non-universal
health & retirement are TOUGH to cut politically -- especially when the programs are social
insurance policies