From Social Insurance to Social Assistance

In attempting to establish a social security system that would function to smooth the transition from a planned to market economy, the government of China has, for most of the time in the past decades, focused its efforts on setting up social insurance programs in the urban areas. Along with the emergence of urban poverty since the mid 1990s, the emphasis of the government has shifted to means-tested social assistance programs as the major means to combat poverty and maintain social stability. However, with the absence of more equitable social and economic policies that can protect people against the many risks associated with a market economy, the role of social assistance is very limited.     

Aiming to keep poor Mexican families at the breadline (but no higher): The effects of minimum wage,tax, and social policy changes between 1994 and 2012

Welfare policy in Mexico has been transformed in recent decades. During the years of the import‐substitution industrialization economic strategy and the hegemonic party political regime, social policy was based on social insurance programs of limited coverage to urban formal sector workers and their families. In the mid‐1990s, an unprecedented expansion of social protection through social assistance programs was triggered, along with social insurance reform. This article assesses the effects at the household level of social policy changes, in combination with changes in taxes and the minimum wage, which also impact the welfare of the population. The research applies “model families” to establish effects of social, tax, and minimum wage policy changes across population groups, and their combined potential to combat poverty. Findings show that although taxation and social policy changes increased redistribution towards poor families, their capacity to lift and keep them above poverty thresholds was limited by the drop in the real value of the minimum wage and by strict targeting mechanisms, which exclude families that do not meet eligibility criteria but still fall below poverty lines. Social policy expansion merely subsidized the drop in real minimum wage, and poor families at best remained at similar income levels. Hence, the logic of the design of welfare policy changes can be characterized as aiming to keep poor families on the breadline, but no higher.     

The protection of atypical work in the Australian, British and German social security systems

It is a common feature of Australian, British and German social security law to exclude atypical work from many normal standards of protection. Social insurance and occupational welfare law still concentrate on the standard employment relationship, as they use length and continuity of employment as the major criteria for distributing benefits, and means-tested systems put those who depend on different sources of income, as most atypical workers do, at a disadvantage. However, equal treatment and even promotion are granted to one type of atypical work: the combination of domestic and atypical labour market work. Examples are the law of unemployment insurance in Great Britain and Germany, the family components within the social insurance schemes, the special British and Australian means-tested benefits for the working poor family, and parental leave legislation in Germany.     

Making ends meet: perceptions of poverty in Sweden

During the era after the Second World War, Sweden has built a welfare system based on labor market participation and income maintenance. Low unemployment and decent wages are supposed to guarantee people a labor market income or income maintenance, which in turn should provide a proper standard for everyone. However, a rapid increase in unemployment and economic problems have made the future of the Swedish welfare state more uncertain than ever. These circumstances have, among other things, led to the suggestion that Sweden should abandon the income maintenance policy and create a social policy system with the more limited ambition of guaranteeing everyone a minimum income. In that case, one central question must be answered: what constitutes a decent minimum income in today's Sweden? Where should we draw the poverty line under which people will not be forced to live? These questions are central in the current debate. The consensual poverty line method is used in this article to derive a poverty line relevant for today's Sweden. The results shows that more than every fifth household has an income below the consensual poverty line. That is, they have an income that most Swedes would argue is too low to make ends meet. The level of the consensual poverty line was compared with the National Board of Health and Welfare's guidelines for social assistance. The consensual poverty line was shown to be more generous to small households and the norm for social assistance was more generous to larger households. Finally, the expenditure for guaranteeing all Swedish household a minimum income equal to the consensual poverty line was estimated: more than SEK 25 billion per year. The results in the article casts serious doubt on the ability of the Swedish welfare state to secure a decent income to all citizens.     

From industrial restructuring to the financial crisis: Mainstream nationalism and minimum income in the Basque Country

The uneven development of minimum incomes in Spain is one of the factors that explain the significant differences in the poverty indicators that characterize the Spanish regions, generally in favour of the territories most committed to these policies (Basque Country, Navarra and Asturias). However, there are other aspects that deserve some consideration when interpreting the specific method of developing minimum incomes in southern Europe. One aspect has to do with the differing dynamics of countries, such as Spain and Italy, which have opted for a decentralized regional model. In this regard, the regional autonomous initiative of the Basque Country played a decisive role in promoting minimum income programs in the late 1980s. Without its leadership in the launch of the regional minimum income policy, Spanish trade unions would probably not have opted for this method as a mechanism for combating poverty in the 1990s. No Italian region went on to play this driving role at that time. This article analyses the ideological foundations of the Basque minimum income policy introduced in the late 1980s and which grew significantly before and during the crisis that started in 2007-2008. It examines the dominant political narrative on this issue by analysing the discourse of some of the key nationalist leaders involved in the birth and development of the minimum income scheme. The approach shows that the experience of social decline linked to industrial restructuring processes was instrumental in the construction of the nationalist narrative.     

Protecting the Old in a Young Economy: Old Age Insurance in the West Bank and Gaza Strip

Taking the West Bank and Gaza Strip as a reference point, this paper looks at social protection in developing economies, which are beset by economic stagnation, widespread poverty and unemployment. If the main breadwinner dies, is unable to work or is an older person, these factors are prime causes of absolute poverty. This is hardly surprising, since private and public systems of social security are totally inadequate in this area in particular. Current thinking on social security suggests that what is needed is the rapid introduction of a comprehensive system of retirement provision, comprising a mandatory capital-funded insurance component, with defined contributions, administered on a decentralized basis; and a state-administered pay-as-you-go basic insurance component with lump-sum transfers to safeguard the poorest. A system of this kind works to prevent poverty in old age by redistributing funds from some individuals to others and ensuring an income for life, and it represents a compromise between a fair return on what people have contributed and a fair distribution over society as a whole. It is thus a major force for stability in society.     

Mending Nets in the South: Anti-poverty Policies in Greece, Italy, Portugal and Spain

The marginal role of social assistance and the absence of minimum income programmes have long been thought to constitute defining characteristics of the southern European model of welfare. Nevertheless, over the 1990s significant innovations in this field have taken place. The paper aims to contribute to the analysis of recent developments by critically examining the experience of anti‐poverty policies in Greece, Italy, Portugal and Spain. It is argued that the “patchiness” of safety nets in southern Europe is due to a unique set of constraints, the most relevant of which are the role of families and the “softness” of state institutions. A review of national profiles reveals that new policies introduced in all four countries mark progress towards redressing some of the historical imbalances of that welfare model. In particular, fully fledged minimum income schemes now operate in Portugal and in certain Spanish regions, while an experiment involving a number of Italian municipalities is still in progress. In spite of this, the paper concludes that social safety nets in southern Europe remain frail in terms of institutional design as well as political support and legitimacy.     

Mandatory occupational welfare: Severance pay as an unemployment compensation instrument

This study focuses on the conceptual and empirical development of severance pay (SP)/redundancy pay schemes established through centralized collective agreements (in Nordic countries) and legislation for unemployment compensation. It argues that these “mandatory” occupational welfare benefits have been neglected in social policy debates due to the ambiguity in their conceptualization, overemphasis on their cost implications, and the nonrecognition of their redistributive effects. The study offers quantitative indicators to analyse SPsapos; redistributive structure (coverage, generosity, and benefit equality) during the Global Recession in Canada, the United Kingdom, Australia, Ireland, France, Germany, Austria, Spain, Portugal, Denmark, and Sweden. The findings demonstrate that SP schemes possess distinctive elements in Southern European, Continental European, Anglo-Saxon, and Nordic clusters. The indicators are also used to analyse the interplay between these schemes and unemployment insurance/assistance in these clusters.     

Poverty, welfare problems and social exclusion

This article investigates whether, and to what degree, poverty is linked to other types of welfare problems and, in larger perspective, whether the situation can be understood in terms of social exclusion. Two different measures of poverty – income poverty and deprivation poverty – and 17 indicators of welfare problems were used in the analysis. It was shown that income poverty was rather weakly related to other types of welfare problems, i.e. the most commonly used measure of poverty seems to discriminate a section of the population that does not suffer from the kinds of problems we usually assume that poverty causes. Deprivation poverty, identifying those who most often had to forgo consumption of goods and services, did correlate strongly with other types of welfare problems. Hence, people living under poor conditions do suffer from welfare problems even though this section of the population is not always captured by income poverty measures. The final analysis showed that the types of welfare problems that were most likely to cluster were deprivation poverty, economic precariousness, unemployment, psychological strain and health problems. Whether these types of accumulated welfare problems, from a theoretical perspective, can be seen as indicators of social exclusion is more doubtful.     

Comparing Formal Unemployment Compensation Systems in 15 OECD Countries

This study contributes to the welfare regime literature by analyzing unemployment compensation programmes – unemployment insurance (UI)/assistance (UA) programmes and redundancy pay schemes – of welfare state/occupational welfare regimes. It covers 15 countries of the Organisation for Economic Co‐operation and Development (OECD) selected from Southern European, Liberal, Continental‐corporatist and Social Democratic country clusters. In contrast to the common argument that Southern European countries have underdeveloped formal unemployment compensation systems, this study argues that they (especially in Spain, Portugal, and to some extent Italy) are comparable in strength to those in Continental‐corporatist countries if occupational welfare programmes – notably redundancy pay – are considered alongside welfare state programmes for unemployment protection. The study also outlines the characteristics of redundancy pay schemes in the four country clusters and shows how different redundancy pay schemes are linked to UI/UA schemes in these clusters.     

Trends among social assistance recipients in Sweden since 1945

The proportion of the Swedish population that receives means-tested social assistance has not decreased since 1945. This has been cited as a surprising research finding, since there has been a general increase in the standard of living and in income equality during the same period. The income of assistance recipients is no lower than for a substantial minority of the non-recipient population. This analysis shows that assistance recipients differ from others with low incomes in that they have less wealth and more problems concerning welfare or standard of living. It is shown that groups that traditionally have had an overrepresentation of assistance recipients have generally increased in size since 1945. Even though supply-side hypotheses cannot be ruled out as explanations for the non-decrease of social assistance, evidence indicates the persistence of people in need of assistance due to their marginal economic position in the Swedish welfare state.     

‘In a perfect world it would be great if they didn't exist’: How Australians experience payday loans

In the last few decades, payday lending has mushroomed in many developed countries. The arguments for and against an industry which provides small, short‐term loans at very high interest rates have also blossomed. This article presents findings from an Australian study to contribute to the international policy and practice debate about a sector which orients to those on a low income. At the heart of this debate lies a conundrum: Borrowing from payday lenders exacerbates poverty, yet many low‐income households rely on these loans. We argue that the key problem is the restricted framework within which the debate currently oscillates. Key Practitioner Message: ● Framing payday borrowing as a problem of market failure leads to one‐sided and ineffective regulatory responses; ● Until governments instigate real alternatives for cheap and readily available credit, and broader anti‐poverty measures, curbing access to payday lenders can have the perverse effect of increasing privation; ● For practitioners seeking to abolish payday lending, campaigns for higher wages and a liveable social welfare income are central.     

Social income transfers and poverty: A cross‐country analysis for OECD countries

Caminada K, Goudswaard K, Koster F. Social income transfers and poverty: a cross‐country analysis for OECD countries Poverty alleviation is an important policy objective in developed welfare states. This article reports on a study of the association between social transfer policies and poverty. It has been claimed in several studies that based on a simple bivariate approach, high social effort goes along with low poverty levels. Empirical studies have also found that factors such as demographic and economic conditions may also have an influence on poverty, affecting the relationship between social spending and poverty. In the present study, we empirically analysed the impact of social expenditure on poverty for the period 1985–2005, and in contrast to previous research, demographic and macroeconomic differences across countries were controlled for. Quite a strong negative relationship was still found between the level of social expenditure and poverty. Ageing and unemployment rates were found to have some explanatory power but without affecting the association between social transfers and poverty. Thus, the multivariate approach chosen in this study confirms the results of earlier research.     

Social Welfare Reform Since the 1997 Economic Crisis in Korea: Achievement, Limits, and Future Prospects

Social welfare reform has been implemented in Korea since the 1997 financial crisis. A dominant concern of the reform was on equality and social solidarity. A major means to this end was establishing universalistic social insurance programs like those in developed welfare states. The reform efforts produced some positive results but were not greatly successful. Income polarization and the deteriorating economic status of low-income families have become big social issues. Many low-income families have not gained many benefits from the reformed social security system. The rapid aging of the population is creating an exploding demand for social spending, risking the fiscal sustainability of major social insurance programs. The reform experience suggests that a social welfare system based on western-style universal social insurance may be too expensive to sustain and not very effective in protecting disadvantaged families in Korea. More attention is being paid to expenditure control and efficiency. Social insurance programs may need to be leaner than those in traditional welfare states. Targeted programs, such as the "making work pay" policy, are likely to be expanded more broadly to low-income families. The future of the Korean welfare state may hinge on successful employment support for working families and extensive investment in their human capital.     

Voluntary social insurance for Vietnamese laborers in the informal economic sector

Voluntary social insurance (VSI), a type of social insurance organized by the Government, allows participants, who work in the informal sector with unstable jobs and income, to choose the premium and payment methods in accordance with their income for their retirement plan. The rate of Vietnamese laborers participating in VSI is low. This study aims to examine the current situation of VSI participation of laborers, as well as their perception of VSI visibility and assessment of VSI policies and utilization. Results from survey with 293 laborers, including 144 VSI participants and 149 VSI non‐participants, and semi‐structured interviews with 60 stakeholders in two districts in Northern Vietnam show the lack of awareness of VSI existence among non‐VSI participants, and limited knowledge of VSI policies among VSI participants. Although participants endorsed beneficiaries and premium in the retirement plan, they were concerned about the long 20‐year premium payment duration in the situation of unstable jobs and income, and the lack of other benefits, for example, maternity leave and unemployment benefit. Results recommend better propagandas, distributed documents, and educational sessions on VSI policies on mass and social media, as well as at VSI conferences and their workplace.     

Welfare state dissatisfaction and support for major welfare reform: Towards means-tested welfare or a universal basic income?

This research note investigates how people combine their views on two radically opposing welfare reforms: a universal basic income and a fully means-tested welfare state. Using data from the 2016–2017 European Social Survey, we found that support for transformative welfare reform is rooted in perceptions of the performance of the current system. The preferred direction of reform, however, strongly depends on the specific aspects of the welfare state people are happy or unhappy with. At the country-level, we show that underperforming welfare states—in terms of higher poverty rates and lower social spending—increase popular demand for transformative welfare reform, in either direction. These findings are of crucial importance for ongoing debates about the future of the welfare state.     

Developmentalism in Korea: A Useful Tool for Explaining the Role of Social Security in the Reduction of Poverty and Inequality

It is conventional wisdom that universalism is more effective than selectivism in addressing the problems of poverty and inequality. In providing income security for the elderly, retirement pensions calculated on the principle of social insurance represent universalism and social assistance benefits on the basis of means-test selectivism. Korea has both a contributory pension scheme and social assistance program for the elderly. The social assistance began in 1961. The contributory scheme, the National Pension, started belatedly in 1988 and its coverage expanded to the entire population in 1999. We can, therefore, expect that the social security system, especially the universal pension scheme based on social insurance, has some positive impacts on the reduction of poverty and inequality. This paper, however, raises doubt as to the conventional wisdom and thus reviews the developmental process of the Korean social security system for the aged. It was found that the dominant ideological controversy revolved, not around universalism versus selectivism, but around the option between developmentalism and other strategies. Our empirical analysis showed that the public pension had little impact on the reduction of poverty and inequality, particularly in comparison with advanced welfare states. This is not surprising at all, since poverty eradication and redistribution were not major objectives of the Korean social security system. The controversy between universalism and selectivism was relatively unfamiliar in the policy process of the Korean social security system. Even though the redistributive effect is getting larger as the National Pension system becomes mature, the developmentalist model has been proved to be a more useful tool for explaining the limited role of Korean social security.     

The relationship between different social expenditure schemes and poverty,inequality and economic growth

In this article, we study how social expenditure is related to poverty, income inequality and GDP growth. Our main contribution is to disentangle these relationships by the following social expenditure schemes: 1) “old age and survivors”, 2) “incapacity”, 3) “health”, 4) “family”, 5) “unemployment and active labour market policies” and 6) “housing and others”. For this purpose, we employ OLS and 2SLS regression models using a panel data set for 22 Member States of the European Union from 1990 until 2015. We find total public social expenditure to be negatively related to poverty and inequality, but not related to GDP growth. The results vary substantially between the different social expenditure schemes, which makes more accurate targeting possible.     

Income security for older people: An Asian perspective

In Asia and the Pacific, as in other developing regions, the continuing growth of the aged population has a great impact on social security programmes generally and, in particular, on the income security of older persons. In societies where traditional support systems are breaking up, their need for social security protection is increasingly important. A system of social security for the elderly population exists in most countries of the region. Many are provident fund schemes, which are basically saving schemes, and their coverage is low. Where social insurance pension schemes exist, the levels of benefits provided are also low. The focus for future development, therefore, lies in converting the savings schemes into multitiered pension schemes, extending their coverage and raising the level of benefits. In this context the critical question concerns the role of the State and the type of schemes used. The need for public pension schemes is great in Asia and the Pacific, where the level of poverty is comparatively high. Building pension schemes, whether public or private, involves a set of issues that need to be addressed. This article considers the systems currently in place and the challenges and limitations faced when considering the future development of social security in this area.     

Structural pressures, social policy and poverty

The purpose of this article is twofold. The first aim is to examine 15 OECD countries from the point of view of the so-called third-generation studies, analysing if the development of poverty and income transfers has been uniform in countries classified under the same welfare state models. This has been done to test how appropriate it is to use welfare state models as an analytical tool in comparative welfare state research. The second aim is to examine the effect of different structural factors on poverty and income transfers. Obtained results indicate that two demographic variables studied behave somewhat differently. The share of older people in the population is – not very surprisingly – connected to an increase in income transfers. In the case of younger population groups, the results are the opposite. The results show that the greater the proportion of older people in the population, the lower the poverty rates. Social policy has in many countries consisted primarily of pension policy, and investments in the elderly population are now beginning to bear fruit. Good pension schemes diminish the immediate poverty risk of older people. As a consequence of their increased well-being, the overall poverty rate will fall. In addition to demographic factors, the results indicate that the unemployment rate is connected, on the one hand, to growth in income transfers and, on the other hand, also to increases in poverty. However, unemployment's effect on poverty is not straightforward. The direct effect is indeed an increase in poverty but, if income transfers are taken into account, the indirect effect is a decrease in poverty, since unemployment increases income transfers (unemployment benefits), which on their side alleviate poverty.