Economic crisis, European Welfare State Models and Inequality Carlos Ochando Claramunt Department of Applied Economics, University of Valencia (Spain) [email protected]Paper presented to XIII International Colloquium ISEG-Ulisboa 11-13 Mayo 2016. “Post-2008 Global Dynamics and Structural Changes: economic, political and Eco-societal transitions”
14
Embed
Economic crisis, European Welfare State Models and Inequality€¦ · Economic crisis, European Welfare State Models and Inequality Carlos Ochando Claramunt Department of Applied
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Economic crisis, European WelfareState Models and Inequality
Carlos Ochando ClaramuntDepartment of Applied Economics,
The welfare state model correctly explains the initial levels ofinequality in the countries (prior to the crisis) and continues toexplain the absolute levels of inequality that exist between thedifferent countries (the levels of inequality existing in countrieswith a Nordic or Scandinavian welfare state system are lower than,for example, those countries with Anglosaxon or Mediterraneanmodels).
However, as a consequence of the current economic crisis, it canbe seen that simply belonging to one particular welfare state systemor another does not explain the different ways in which inequalityhas evolved in each one of the European countries. That is to saythat, even in countries with the same welfare state model,inequality has not evolved in the same way; this seems to indicatethat it is not only the welfare state system of each country whichexplains the changes in inequality, but that other factors (economic,political and/or social) also play their part.
Main results
2- Welfare state systems and redistribution
Índice de Redistribución. 2012.
0,41
07
0,40
35
0,52
67
0,47
38
0,44
90
0,44
18
0,47
98
0,44
23
0,41
42
0,41
40
0,38
76
0,39
72
0,38
28
0,33
71
0,32
84
0,44
11
0,42
76
0,46
84
0,45
01
0,44
04
0,39
90
0,38
88
0,36
15
0,34
95
0,29
26
0,37
38
0,32
15
0,31
48
0,2000
0,2500
0,3000
0,3500
0,4000
0,4500
0,5000
0,5500
EU15EU28
Sweden
Denmark
Netherla
nds
Finland
Germany
Belgium
Luxe
mbourg
Austria
France
Greece
Portugal
Spain
Italy
Ireland
United K
ingdom
Hungary
Slove
nia
Czech
Republic
Slova
kia
Croatia
Romania
Poland
Bulgaria
Lithuania
Estonia
Latv
ia
Redistribution Index, 2012
The welfare model or system accurately explains the different degreeor index of redistribution reached by each country. So, we can seethat, in terms of their social policies, the highest levels ofredistribution are to be found in the Nordic, Anglosaxon andContinental models; on the other hand, the Mediterranean countries,the Baltic countries and some Central and Eastern Europeancountries redistribute less.
The welfare state model continues to explain the levels of inequality between differentcountries. Namely countries with a Nordic or Scandinavian welfare State have lowerlevels of inequality than, for example, the Anglo-Saxon countries or Mediterraneanmodel.
However, since the current economic crisis started, we find that just belonging to aparticular Welfare State Model does not explain the different evolution of inequality ineach of the European countries.
Inequality has not moved in the same direction in all countries of the same model. Thisseems to prove that, besides belonging to a certain welfare state model, other factors(economic, political and/or social) occurring in a country explain changes in inequality.
The current austerity and fiscal consolidation policies are increasing inequality in mostEuropean countries. Fiscal consolidation policy is not only decreasing domestic demandbut it is contributing to generate a more regressive distribution of income and wealth.