Changing Risks, Changing Welfare States? Exploring an Inter-generational Mismatch

• In Event: The Welfare State: Tracing Changes Over Time

Abstract

The question of whether welfare states have managed to keep up with post-industrial transformations and the changing nature of risks has kept the literature busy for almost two decades. In this regard, many authors have traced the processes of institutional and policy adaptation of welfare states to new realities. However, despite the challenges faced by developed welfare states being quite common, differences on institutional settings and policy mixes necessarily entail heterogeneity in the variation in risks over time. This, however, has been largely overlooked by most literature, a major conceptual shortcoming.
This paper brings in an innovative perspective to the study of welfare state change. While the research question of whether welfare states have adapted to the changing nature of risks remains at the macro level, it uses a micro-level methodological approach that accounts for changes in the needs, life trajectories and household arrangements of individuals across countries and time.
The analysis is developed using an intergenerational perspective, looking jointly at the evolution of the material needs of different age groups and the share of their income coming from public policies. Using LIS (Luxembourg Income Study) data from 1985 to 2014, it shows that there is a mismatch between the variation in needs and the way in which policy has reacted to it. This is especially the case for young adults (those aged 18-25).
Results suggest that the Post-war ‘social contract’ is no longer in place: younger sectors of population fare worse in regards to the average than they used to, while other groups (mostly those aged above 51) have improved their relative position. The existence of a generational mismatch resulting from the lack of dynamism and adaptation of social policies may have consequences both in terms of the opportunities given to younger generations and regarding the social consensus underlying European welfare states.

Author

• Ariane Aumaitre, European University Institute