Welfare reform by stealth? Cash benefit recipiency data and its additional value to the understanding of welfare state change in Europe

Abstract

Trends in social protection schemes have been one of the main subjects in comparative welfare state research, not least since the financial crisis and the austerity measures that many European countries implemented in its aftermath. One of the key debates in literature is about how to measure the extent of public welfare provision as an indicator of welfare state change. Many quantitative researchers have used macro-level data on programmatic social expenditure or on the generosity of benefit rights, bringing forth major theories of welfare state retrenchment, system convergence, path dependency and paradigm changes in social policies. Recently, however, micro-level data on cash benefit receipt is seen as an alternative measure of welfare state change. Instead of gauging the cost reality of spending trends or the law reality of social rights reforms, this indicator is claimed to provide insight into changes of actual welfare receipt. This article studies benefit recipiency data from the EU Statistics on Income and Living Conditions, covering 14 European countries for the period 2003 to 2013. It investigates cross-national welfare state dynamics by analysing national receipt-based benefit access rates and transfer shares and how they relate to dynamics in the prevailing indicators. Results show how much the choice of the indicator for the dependent variable affects the results of descriptive accounts of welfare state change. In addition, findings indicate what could be called welfare state reform by stealth. In several countries, levels of unemployment benefits stay significantly behind the development of median household incomes. This observation applies particularly to countries that are believed to have generous welfare systems, and it has not been revealed by research based on disaggregated social spending data or social rights data.

Social expenditure, social rights, and benefit receipt as indicators of welfare state generosity

“…The findings support previous research suggesting a trade-off between the benefit coverage and the generosity of benefit levels in recent years (Kevins, 2017) as well as research claiming that governments of several European countries seem to keep budgetary control over their welfare expenses by combining broad(er) benefit access with low(er) benefit amounts and vice versa (Otto, 2017b). For example, in Scandinavian welfare systems, universal coverage for unemployment benefits is increasingly accompanied by decreasing relative levels of benefit due to the non-adaptation of amount-related aspects such as benefit indexation rules and benefit assessment bases (Esser et al , 2013).…”

Towards a new consolidated framework for analysing benefit coverage

“…For instance, if fewer people receive unemployment benefits, this could be because of stricter qualification criteria, or an increase in the number of unemployed people with weaker employment histories. Although there are various weighting techniques to reduce this bias (Otto, 2018b;Otto and van Oorschot, 2019), the difficulty in disentangling 'policy supply' and 'policy demand' limits our understanding of policy. The exact reasons for incomplete coverage are obscured further as we typically lack information about those eligible, but who for one reason or the other do not receive a benefit.…”

The political economy of minimum income benefits: How parties, unions and migration influence benefit adequacy

“…What does this say about partisan politics? The results point towards ‘welfare reforms by stealth’ (Jensen et al, 2018; Otto and Van Oorschot, 2019), whereby governments try to avoid blame by enacting ‘invisible’ policies – by not adjusting nominal benefit levels to inflation and wage developments – as ‘frontal assaults on the welfare state carry tremendous electoral risks’ (Pierson, 1996: 178).…”