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Welfare Over Time: Three Worlds of Welfare Capitalism in Panel Perspective*

Published online by Cambridge University Press:  28 November 2008

Bruce Headey ,
Robert E. Goodin ,
Ruud Muffels  and
Henk-Jan Dirven
Bruce Headey*
Affiliation:
Public Policy, University of Melbourne
Robert E. Goodin*
Affiliation:
Philosophy, Australian National University
Ruud Muffels*
Affiliation:
Economics, Tilburg University
Henk-Jan Dirven*
Affiliation:
Sociology, Central Bureau of Statistics Netherlands
*
Public Policy Program, 234 Queensbury St., University of Melbourne, Parkville VIC 3052, Australia; Fax: (61)(3) 9349 4442; email: B.W._Headey. POLITICS@muwaye.unimelb.edu.au.
Philosophy, Research School of Social Sciences, Australian National University, Canberra ACT 0200, Australia; Fax: (61)(2)62493294; email: goodinb@coombs,anu.edu.au.
Research Unit on Work & Social Security, Tilburg University, PO Box 90153, Tilburg, The Netherlands; Fax: 31 13 4 66 2053; email: RUUDJ.MUFFELS@KUB.NL.
Department of Socio-Economic Household Surveys, Central Bureau of Statistics, P.O. Box 4481, NL-6401 CZ Heerlen, The Netherlands; Fax: +31 45 5706272; email: hdrn@cbs.nl.
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Abstract

In this paper we analyse the effects, over time, of the liberal (US), corporatist (German) and social democratic (Dutch) welfare states on poverty, inequality and income redistribution 1985–89. Unlike previous international comparisons relying on static frameworks and cross-sectional data, we use panel data from the Dutch Socio-Economic Panel (SEP), the German Socio-Economic Panel (SOEP), and the American Panel Study of Income Dynamics (PSID) — all of which have large samples (15,000+ respondents) and all of which have been running for fully a decade — to compare welfare state performance over one and five years. We find that both the corporatist (German) and especially the social democratic (Dutch) welfare states redistribute income substantially to reduce poverty and inequality, and that in both cases these effects are substantially greater over five years than one. In the social democratic (Dutch) regime very few people have incomes which, taking a five year average, put them below the poverty line. The corporatist (German) regime also turns out to be much more redistributive over five years than would ordinarily be expected. The liberal (US) welfare state, in contrast, is not only much less redistributive on a one-year basis but also no more so over five years than one. There is, however, evidence of efficiency losses in the more ‘generous’ social democratic welfare state, in that fewer people appear to escape poverty through labour markets than in the liberal welfare regime.

Type
Articles
Information
Journal of Public Policy , Volume 17 , Issue 3 , September 1997 , pp. 329 - 359
Copyright
Copyright © Cambridge University Press 1997

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Footnotes

*

An earlier version was presented to the Second German Socio-Economic Panel Conference, Potsdam, July 1996. We gratefully acknowledge the helpful comments of that audience, of Richard V. Burkhauser, Peter Krause, Julian Le Grand, Deborah Mitchell, Stein Ringen, Gert G. Wagner and of the JPP's anonymous referees. Thanks also to Ewa Karafilowska for superb statistical and computing advice. This paper is based on research carried out in the context of the comparative research project entitled ‘The Real Worlds of Welfare Capitalism’. Master sets of the American and German panel data are held at the Center for Demography and Economics of Aging at Syracuse University and the German Institute for Economic Research, Berlin. We are grateful to these institutions for preparing matched data sets. The Dutch data are collected and held by the Central Bureau of Statistics to which we express our gratitude. Views in the paper are those of the authors and not of our employers.

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