Welfare states in hard times

Abstract

Welfare states have been subject to a host of conflicting pressures from high unemployment, rising income inequality, population aging, tax competition, rising budget deficits and debts, slow growth, and fears that economic dynamism was being stifled by excessive taxes and benefit levels. Nevertheless total spending on welfare has edged up in many countries and cuts in rates of benefit have generally been fairly modest. The generosity of the welfare state has an enormous influence on poverty and income inequality and still appears to be popular in most of Europe. Suggestions that society would benefit from reduced working time must reckon with the fact that it is paid work which generates the tax revenue required to fund welfare spending. © 2006 Oxford University Press.