Welfare State Retrenchment: The Partisan Effect Revisited

31 Pages Posted: 8 Mar 2006

See all articles by Bruno Amable

Bruno Amable

National Center for Scientific Research (CNRS) - Centre d'Etudes Prospectives d'Economie Mathematique Appliquees a la Planification (CEPREMAP); Université Paris I Panthéon-Sorbonne

Donatella Gatti

Paris School of Economics (PSE); PSE; IZA Institute of Labor Economics

Jan Schumacher

University of Mainz

Multiple version iconThere are 2 versions of this paper

Date Written: March 2006

Abstract

This paper aims to shed light on the role of the 'ideology' of political parties in shaping the evolution of the welfare state in 18 developed democracies, by providing empirical findings on the determinants of social programs entitlements and social spending over the period 1981-1999. The paper shows that structural change is a major determinant of the extent of social protection. Our results suggest that overall spending is driven up by structural change. On the other hand, strong structural change has a negative influence on welfare entitlements measured by net replacement rates of sickness insurance or unemployment benefits. Partisan influence plays an important role in the dynamics of the welfare state. Left-wing governments strengthen the positive effect of shocks on aggregate social expenditure while right-wing governments undertake even stronger cutbacks in replacement rates as a reaction to structural change.

Keywords: welfare state, ideology, structural change

JEL Classification: H5, I1, J8

Suggested Citation

Amable, Bruno and Amable, Bruno and Gatti, Donatella and Gatti, Donatella and Schumacher, Jan, Welfare State Retrenchment: The Partisan Effect Revisited (March 2006). IZA Discussion Paper No. 1995, Available at SSRN: https://ssrn.com/abstract=889041 or http://dx.doi.org/10.2139/ssrn.889041

Bruno Amable

National Center for Scientific Research (CNRS) - Centre d'Etudes Prospectives d'Economie Mathematique Appliquees a la Planification (CEPREMAP) ( email )

Ecole Normale Superieure
48 boulevard Jourdan
Paris, 75014
France

Université Paris I Panthéon-Sorbonne ( email )

17, rue de la Sorbonne
Paris, IL 75005
France

Donatella Gatti (Contact Author)

PSE ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Jan Schumacher

University of Mainz ( email )

Saarstrasse 21
Mainz, D-55099
Germany

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