It would be hardly feasible to attempt in this book and at this point in time a regular macro-sociological factor analysis of the position of social security institutions in times of economic crisis. But the previous chapters have given us the necessary parameters so as to be able to formulate a judgement on which to base our search for possible ways of preserving the institution from a lasting deterioration and progressive dismantlement.

The impact of economic crises on the institution in a historical perspective

The essential problem of all social security measures based on social insurance has been known from the very beginning, and particularly from the time of the economic crisis in the early 1930s – the simultaneous impact of a reduction in revenue due to a shortfall of contributions paid by a shrinking labour force and defaulting enterprises, and of an increase in expenditure on unemployment benefits with a collateral rise in the volume of long-term sickness, disability and old-age pension benefits.With respect to the last-mentioned risks, experience has shown that during a period of mass unemployment there is an obvious tendency on the part of those who for some reason are not eligible for unemployment benefit to have recourse to the corresponding branches of social insurance.

The numerous and varied reactions to this dramatic situation may have both positive and negative aspects. On the positive side is the resulting pressure on public authorities to take steps towards the improvement of existing social security coverage, as we saw in the impetus given to the development of old-age and disability insurance during the period between the First and Second World Wars. The obvious danger is the tendency of public authorities to use and abuse social security institutions and benefits they provide as the main line of defence or even remedy against what is essentially an economic disease of society. This was the case of the mistaken policy practised in some countries during the period after the first oil shock in the 1970s, which threatened to ruin all branches of social insurance affected by mass unemployment. Fortunately, the message that remedies against unemployment have to be found in measures dealing with the promotion of employment rather than in social security benefits was received before it was too late.