The European welfare state regimes: questioning the typology during the crisis

Abstract

This paper examines the nature of changes within the EU–15 welfare states affected by the 2008 crisis. We try to answer the question of whether the differences that exist among different welfare state regimes, according to prevailing welfare state typologies, lead to different responses to the consequences of the crisis. Welfare state regimes are the result of different institutional perceptions of social risks hence it is realistic to expect specific responses to the effects of crisis among different welfare state regimes, and similar responses among the countries that belong to the same welfare state regimes. In order to recognize convergent vs. divergent processes, we perform a comparative analysis of the dynamics of the key welfare state determinants of the EU–15 countries, grouping according to welfare state regimes, in the pre-crisis and crisis periods. The results indicate that institutional rigidity and inherent inertia has remained a key factor of convergent welfare state processes in countries that belong to the Social Democratic and Corporatist welfare state regimes. Deviations from such a course are the most evident in the Mediterranean welfare state regimes, especially in Greece and Portugal where austerity measures have been formulated under the strong influence of the Troika.

Keywords:

• welfare state
• economic crisis
• the European Union
• institutional changes
• pension system
• unemployment benefit system

JEL Classification::

• D63
• E24
• H53
• H55

Additional information

Kosta JOSIFIDIS, Full Professor, University of Novi Sad, The Faculty of Economics Subotica, Serbia. Research interests: Macroeconomic theory and policy, International finance, Methodology of economics, Political economy of transition, Globalization and European economy.

John B. HALL, Full Professor, The Department of Economics, Portland State University, USA. Research interests: Evolutionary-Institutional Theory, Intersections between Philosophy and Economics, Central and East European Economies in Transition, Economics of Frontier Regions: with special interest on the bacia do rio Amazonas, South America's “third” giant.

Novica SUPIC, Assistant Professor, University of Novi Sad, The Faculty of Economics Subotica, Serbia. Research interests: Economics of the welfare state, Labour economics, Economic policy.

Emilija BEKER PUCAR, Assistant Professor, University of Novi Sad, The Faculty of Economics Subotica, Serbia. Research interests: Exchange rate regimes and monetary regimes.