Publications > Publications > Working Papers > Path dependency or convergence: What welfare model will shape Europe's future?

Research papers to download

Esther Ademmer, Joscha Beckmann and Rainer Schweickert, Large-scale Transformations of Socio-economic Institutions, WWWforEurope Working Paper No. 76, December 2014

Ágota Scharle, Balázs Váradi and Flóra Samu, Policy convergence across welfare regimes: the case of disability policies, WWWforEurope Working Paper No. 75, January 2015

Wilfried Altzinger, Jesus Crespo Cuaresma, Petra Sauer, Alyssa Schneebaum and Bernhard Rumplmaier, Education and Social Mobility in Europe: Levelling the Playing Field for Europe’s Children and Fuelling its Economy, WWWforEurope Working Paper No. 80, January 2015

Path dependency or convergence: What welfare model will shape Europe's future?

Ever since Esping-Andersen seminal work, economists and social scientists in Europe have researched the question which welfare models can be defined in Europe, what their characteristics and advantages are, and whether one model is superior to the others.

A number of WWWforEurope papers also deal with aspects of this broader topic.

In WWWforEurope Working Paper No. 75, "Large-scale Transformations of Socio-economic Institutions", Esther Ademmer, Joscha Beckmann, and Rainer Schweickert analyse the different paths the Central and Eastern (CEE) former transition economies have chosen. They define two clear cut different models: the Coordinated Market Economies (CME) of Continental Europe and Scandinavia and the Liberal Market Economies (LME) in the Anglo-Saxon Countries. These types differ in respect to size of government and regulation, in the degree of inequality as well as in the capacity of innovation. While some CEE countries (Czech Republic, Poland, Hungary, Slovenia) have moved towards a coordinated model, others have gone the liberal way (Romania, Bulgaria, Slovakia and the Baltic States). How did they fare? The authors find that when looking at the impact of these models, they produce different outcomes regarding income inequality and innovation capacity. And there is no one size of government that fits all. There is no indication that per se large public sectors are detrimental for economic growth (if so, rather the opposite seems to be true). The optimal size and scope of government activity depend on the specific economic system. An important point for policy makers though is that regardless of the model chosen institutional quality does increase the effectiveness of the system and enhance growth.

Ágota Scharle, Balázs Váradi, and Flóra Samu look at "Policy convergence across welfare regimes: the case of disability policies" in WWWforEurope Working Paper No. 76. Although they find that welfare regimes differ in their capacity to adapt to external shocks and to reform, almost all welfare regimes in Europe have changed towards more employment friendly policies. This is especially demonstrated in disability policies – the overall policy directions converge although each country still chooses its particular set of policy tools.

The third paper is WWWforEurope Working Paper No. 80 by Wilfried Altzinger, Jesús Crespo Cuaresma, Petra Sauer, Alyssa Schneebaum and Bernhard Rumplmaier, titled "Education and Social Mobility in Europe: Levelling the Playing Field for Europe’s Children and Fuelling its Economy". In times of changing societies and a globalized economy, no country can afford not to make the most of its population’s productivity. It is therefore inefficient if educational level, employment status and income are not based on the skills and competences of the individual but much more related to the social and economic status of his or her parents. By promoting mobility the human capital stock of a society and thereby its growth prospects would improve.

But Europe still shows high levels of intergenerational persistence, more so in Southern and Eastern Europe than in the Nordic countries. For a long time this persistence had been especially strong for girls and young women, a correlation which has become significantly weaker in the last decades. The only deplorable exception are daughters of migrant families – they hardly ever leave the educational class of their fathers.

This path dependency can be mitigated in several ways: Foremost, it is the provision of universal and high-quality childcare which makes children less dependent on the educational attainment of their parents. So the state must publicly invest in education, but at the same time it should strengthen the economic basis of individuals and families and make them more resilient against labour market shocks. Therefore investments in social security programs increase household incomes and thereby increase private investment in children’s educations. Countries which invest both in education and in social security programs (i.e. Scandinavian countries) have significantly lower inherited persistence than those investing mostly in either education (Anglo Saxon countries) or social security (Continental Europe).