Weiler_slides - Stanford University

Download Report

Transcript Weiler_slides - Stanford University

Stretching the Safety Net:
Is the European Welfare State
in Crisis?
European Roundtable VI
April 8, 2006
European Roundtable VI
1
Names on welfare …
•
•
•
•
•
•
•
Gerhard Schröder
Dominique de Villepin
Kurt Biedenkopf
Wolfgang Clement
Tony Judt
Fritz Scharpf
Jürgen Habermas
European Roundtable VI
2
Overview
• The background: Different conceptions of
the state in Europe and the US
• A case in point: Welfare policies in
Germany
• Challenges to the welfare state
• Comparative perspectives on the welfare
state
• What’s so good about the welfare state?
European Roundtable VI
3
1. The background: Different
conceptions of the state in
Europe and the US
European Roundtable VI
4
5
6
2. A case in point:
Welfare policies in Germany
• The scope and volume of the German
welfare state
• Course correction: The “Agenda 2010”
European Roundtable VI
7
Social Data: Germany, 1950-2001
Indicator
1950
1970
2001
Population (million)
50.0
60.7
82.3
Employed (% of pop.)
45.9
44.2
50.8
Unemployed (% of
7.2
employable)
Women in labor force (%) 35.7
0.6
9.4
35.9
44.0
White collar (% of labor)
19.8
36.6
56.3
Blue collar (% of labor)
48.6
46.8
32.6
European Roundtable VI
8
The major elements of the German
welfare state (1)
• Insurance-based benefits
– Social security (old age) pensions
– Unemployment insurance
– Mandatory health insurance
– Mandatory hospice insurance
• Contract-based benefits: Company
pensions
European Roundtable VI
9
The major elements of the German
welfare state (2)
• Need-based benefits
– Social assistance (including housing, clothing,
Christmas allowances)
– Unemployment assistance (after exhaustion of
unemployment insurance)
• Policy-based benefits
– Child allowances
– Educational services and financial assistance
European Roundtable VI
10
Welfare Data: Germany
Indicator
Unit
Total
welfare
Billion
€
89.3 243.8 346.9
Total
welfare
% of
GDP
25.7
32.1
30.0
33.8
13.3
16.2
18.0
20.6
Employee % of
Contribut. wages
1970
1980 1989
European Roundtable VI
2000
680.8
11
Number of Welfare Recipients:
Germany, 1970-2000 (in million)
Service
1970
1989
2000
Pensions
10.2
14.8
23.0
Unemployment
benefits
Child subsidies
0.1
1.4
3.2
6.9
9.2
9.7
Social welfare
1.5
3.3
2.7
European Roundtable VI
12
Increase in Welfare Payments:
Germany, 1970-2000 (Billion €)
Service
1970
1989
2000
Pensions
27.9
111.3
232.0
Medical care
12.2
68.7
133.7
Unemployment
1.1
13.2
60.3
Child subsidies
1.5
5.7
25.9
Social welfare
1.7
14.7
23.3
European Roundtable VI
13
Contributions to Social Security
Pension Fund: Germany, 2003
• Premiums: 19.5% of wages (equally
shared between employer and employee)
• Wage limits for assessing premiums:
– Western Germany: € 5.100
– Eastern Germany: € 4.250
• Revenue of pension fund:
– Premiums: 75%
– Federal subsidy: 25%
European Roundtable VI
14
“AGENDA 2010” (Germany 2003):
Major Reform Items (1)
• Tax Reform (previously>1/1/04>1/1/05):
– Lowest tax bracket: 19.9 > 16 > 15%
– Highest tax bracket: 48.5 > 45 > 42
• Modest loosening of job security (esp. for
small firms): facilitating termination
• More flexibility for mini jobs
European Roundtable VI
15
“AGENDA 2010” (Germany 2003):
Major Reform Items (2)
• Tightening unemployment compensation
– Unemployment insurance: 18 > 12 months
– Combine unemployment assistance with
social welfare
– Any reasonable job offer must be accepted
• Reducing health care benefits
– Copayments of 10% for physicians,
prescriptions, hospital (min.€5/max.€10 per
service, max. 2% of gross income/year)
European Roundtable VI
16
“AGENDA 2010” (Germany 2003):
Major Reform Items (3)
• Scaling down social security benefits
– No increase of payments in 2004
– “Sustainability Factor” for adjusting future pay
levels to ratio contributors/recipients
– Cap premiums (now 19.5%) at 20/22%
(’20/’30)
– Increase age of eligibility to 63 (67 in 2035?)
– Enhance employment opportunities for older
workers
European Roundtable VI
17
3. Challenges to the welfare state
• More people are in need of welfare:
– There are more older people
– More people need (increasingly costly)
medical care
– More people are (longer) unemployed
• Resources remain (at best) constant
– Largely stagnant economies
– Shifts in ratio of working to retired population
– Contributory schemes drive up cost of labor
– Limits to tax increases
European Roundtable VI
18
The Ageing of Germany
19
Ratio of population 65 and over to the
labor force, 2000 and 2020 (OECD)
20
Total tax revenue (as % of GDP), 2003
21
4. Some comparative
perspectives on the welfare
state
European Roundtable VI
23
Public social expenditures, 1998
Country
as % of GDP
France
28.82
as % of public
expenditure
55.27
Germany
28.48
59.87
UK
25.07
63.84
USA
14.96
43.77
European Roundtable VI
24
Public social expenditure (as % of
GDP) 2001 (OECD)
Unemployment Compensation,
1998
Country
as % of GDP
France
1.48
as % of public
expenditure
2.83
Germany
1.31
2.76
UK
0.32
0.82
USA
0.25
0.73
European Roundtable VI
26
Public Health Benefits, 1998
Country
as % of GDP
France
7.27
as % of public
expenditure
13.93
Germany
7.80
16.39
UK
5.62
14.32
USA
6.00
17.54
European Roundtable VI
27
Public and private health expenditure
(US-$ per capita) 2003 (OECD)
Infant Mortality (deaths per 1000 live births),
2003
5. What’s so good about the
welfare state?
European Roundtable VI
30
The welfare state and its socioeconomic context: Some evidence (1)
Relationship
Correlates
Correlation
Welfare and
poverty
Social expenditure
rate/Poverty rate
-.74
Change in
Δ Social exp.rate/ Δ -.66
welfare/poverty poverty rate
Welfare and
Social exp. rate/
income inequity Income distribution
European Roundtable VI
-.79
31
The welfare state and its socioeconomic context: Some evidence (2)
Relationship
Correlates
Correlation
Welfare and
Social expenditure
+.23
civic engagem’t rate/% of volunteers
Welfare and
criminality (1)
Welfare and
criminality (2)
Social expend. rate/
# of prison staff per
100 k population
Social expend. rate/
# of police per 100k
European Roundtable VI
-.60
-.79
32
The European Roundtable
Website:
http://www.stanford.edu/~weiler/
ERT_website.htm
European Roundtable VI
33
THE SPEAKERS
• Marina Bourgain, European University
Institute, Florence; University of California
at Santa Cruz
• Isabela Mares, Department of Political
Science, Stanford University
• Jonah Levy, Department of Political
Science, University of California at
Berkeley
European Roundtable VI
34
PRESENTATIONS
• Marina Bourgain: “Stretching the Safety
Net Beyond National Boundaries: The
Welfare State and the Role of the EU”
• Isabela Mares: “Business Interests, Wage
Bargaining, and the Political Economy of
Employment and Unemployment in
Europe”
• Jonah Levy: “On the Compatibility of
Economic Liberalism and Welfare Policies”
European Roundtable VI
35