Business Interests and the Development of the German Welfare State
Chapter for the edited volume: Business Interests and the Development of the Welfare State Editors: Pierre Eichenberger and Dennie Oude Nijhuis, Forthcoming
26 Pages Posted: 21 Nov 2016
Date Written: November 18, 2016
This chapter analyses the impact of national employers’ associations on the adoption of the main social insurance programs in Germany. The chapter focuses on four programs: work injury insurance, health insurance, old-age and disability pensions, and unemployment insurance. These four programs form the core of the model of the ‘Bismarckian welfare state’, for which Germany became the prototype. After giving a brief overview of the main characteristics of the German welfare state and its historical origins, the chapter analyses the attitudes of German employers towards the adoption of these four programs. Which policy features did German employers support which ones oppose, and why? Did employers’ positions vary across these four programs, and if yes, how? Was support stronger for some programs than for others?
The chapter finds that support was strongest for work injury insurance, and weakest for unemployment insurance, health insurance and old-age pension fall in between. The chapter suggests that differential impact on work incentives best explains this variation. Employers were most opposed to policy provisions that erode work incentives, but more accommodating towards policy provisions that target segments of the population outside of the labor force, like the old and the sick.
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