New Risks, New Welfare The Transformation of th European Welfare State Edited by Peter Taylor-Gooby Mittuntver.sitetetN Biblioteket J 831 25 Öscersund^/ to- OXFORD UNIVERSITY PRESS Contents List of Figures and Tables x List of Abbreviations xi Notes on the Contributors xii iT) New Risks and Social Change i 1~" Peter Taylor-Gooby 2. New Social Risks in a Conservative Welfare State: The Case of Germany 29 Andreas Aust and Frank Banker 3. The UK—A Test Case for the Liberal Welfare State? 55 Peter Taylor-Gooby and Trine P. Larsen , 4. New Risks—-Are They Still New foT the Nordic Welfare States? 83 Virpi Timonen 5. France: A New World of Welfare for New Social Risks? in Bruno Palier and Christelle Mandin 6. Spain's Transition to New Risks: A Farewell to 'Superwomen' 133 Luis Moreno 7. Switzerland: Negotiating a New Welfare State in a Fragmented Political System 157 Giuliano Bonoli (sT^ew Risks at the EU Level; A Spillover from v-'Open Market Policies? 1S1 Trine P. Larsen and Pater Taylor-Gooby (9!) New Social Risks and Welfare States: New Paradigm and New Politics? 209 ... Peter Taylor-Gooby Index 239 I New Risks and Socia! Change Peter Taybr-Gooby introduction: The Post-Industrial Welfare State This book presents a new perspective on the question of what to do about the welfare state. Changes in population, family structure, labour markets, and in the coming to maturity of expensive welfare systems present formidable challenges to the current welfare settlement. For the most part, discussion of these developments focuses on the pressures they impose on existing benefits and services (see, for example, Pierson, 2001«, b; Scharpf and Schmidt, 2000; Ferrera and Rhodes, 2000a, b; Kuhnle, 2000). Key questions in the literature concern the maintenance of standards and the politics of retrenchment, realignment, and recalibration. In this book, we consider different and parallel changes that require new policies and offer the possibility of more positive directions in welfare reform—the emerging policy agenda of new social risks. The development of European welfare states in the 19,50s, 1960s, and SUs-lOj 1970s took place under highly favourable circumstances, aided by four key factors: a ^golden age' of relatively continuous growth in economies charactgns_ed_byjarge stable manufacturing sectors which provided high levels of family-wage employment for the mass of the population;^table nuclear family structures which supplied care for young children, frail older people, and other dependent groups^overnments able to manage their national economies through broadly neo-Keynesian policies wjiich achieved continuing low unemployment and secure wages;%nd political systems in which coalitionl^FwoYking and midjiljejtes^^ to press effectively for the provision of benefits and services to meet their needs and in which theJa2c_£onsej^jjgi^g^.of such ptovisioji_c^>ujj^be This chapter has benefited from debates in the WRAMSOC group, and particularly from PXtPTlripH Hicrmtrcl^rti* r^..3;«—~ D~~~1t C-*.~. Ul-----------:_l ..3.,.. IT.... .1' Kl tu 1AYLÜR-GÜ0EY Mi W Ki'i K Al i legitimated. These circumstances favoured the development of a family of European welfare states characterised by a. specific division between the appropriate spheres of public and private action. As an ideal type, the main business of the welfare state in industrial society was to provide for needs which wgrejiotade_quately met through the_maricet—intemrpri^^ (retirement, unemployment, sick- ness, or disability) and mismatch between income aiidjaeejldur^ cycle (e.g. child endowment)—or for needs where state provision was widely recognised as desirable (e.g. highly-valued services in areas where the costs of privately checking professional expertise are high, such as health care or education). Social care, however, was mostly provided through the family system. Interventions in the family were limited and the corresponding services weakly developed in most countries. The outcome was the Keynes-Beveridge or Keynes-Bismarck welfare state: gov-\ ^ernments managedeconomies to promote full employmerrtanj_gjrganjsed S social provision for needs which market and family did not meet. ~ _ Things have changed. In an ideal typical post-industrial society, . joS ('/VjH/^JX. economic growth rates are lower and more uncertain,. Technological substantial tax and social insurance contributions. For this reason, and because they involve mainly horizontal redistribution, they tend to require a politics of solidarity, for example through the notion of a 'generational contract', 'risk-pooling', or a state that provides 'cradle-to-grave' care or offers a 'people's home'. Since the overwhelming majority of the population of industrial societies thought they might need the services supplied, such solidarity could be mobilised. Virtually all attitude surveys (see, for example, Ferrera 1993; Kaase and Newton 1996; :- 1 i K ! A iluE vjuOS 1' NHW RlShi ANU MJUAI L HANuL Svallfors and Taylor-Gooby 1999; ch. 1; van OoTSchot 2000) concur that pensions, health care and provision for disabled people—the major programmes to meet needs not met through the market—enjoy high legitimacy. Government in the transition to post-industrialism faces the problem of how to justify ait-backs and constraint in these areas while developingnte^hXservices that tend to go to minorities.. This involves the tactics of blame avoidance and cumulative change charted by Pierson (1994) and others, and is expressed in the enormous resilience of these services against change. 2. New risks affect particular subgroups at particular life stages most keenly. They involve political divisions that do not map easily onto the traditional class and party structures and are likely to involve alliances with other social actors interested in the expansion of the workforce and in enhancing national economic competitiveness. If old social risk welfare was often seen as the outcomeof^democrat|c class struggle' (Korpi, 1983), new risk welfare prograrnmeTm^ the interests entrenched by the outcom.e_of that struggle. 3. Oldriskjjolicies were designed primarily to support people at stages in their lives whenjieedswe^noj^met through the wage relationship. They thus involve substantial transfer expenditure and may be seen as , an economic burden at a time of stringency. New risk policies are often ■>m*W '--—-—r-—— vL^,v concerned to help more people support themselves_through paid work. They may form part of a national strategy to mobilise a greater proportion of the population and to enhance economic competitiveness in a globalised market, and open up particular agendas for business and unions. To the extent that policy focuses on these issues, labour market reform predominates and child care becomes a more important issue than care for oldeT people. About 42 per cent of women of prime working age (between twenty and forty-nine) are involved in child care as against 6 per cent in elder care (Eurostat 2002a: table A.17). 4. New risk policies meet needs mg^ ferent choices and behaviour patterns rather than providing benefits' They are concerned with the engagement of the citizen in paid work and with changes in the pattern of family life. They involve issues of responsibility for providing income and for domestic care that cut across the boundary between public and private spheres. New risk politics directs attention to issues of legitimation and moral values. 5. Because new risks are less likely to involve the entrenched interests, major expenditures, and neo-Keynesian apparatus of interventionism that concern national governments and more likely to involve equal access to employment, the balance of family and work and the issues of training and education that concern an open market in labour, the European Union is lij^ytojseeka^ than it has in relation to old risks. New social risk activity will also enable the European Union to intervene directly in citizen's lives and may help to repair the 'democratic deficit' (Richardson, 2001: p. xv). The politics of old social risk policy-making concern the extent to which ^o'ikcs welfare states are able to resolve the tensions that emerge between different e£ ofy ^ groups when governments seek to retrench or contain spending on highly popular policies. Interest focuses on the extent to which it is possible to construct agreements which allow the interests of labour, business, and welfare state service users to be reconciled and to contain the burden of financing provision (Pochet 1999; Rhodes 20or; Hemerijck 2002), and on examples of successful accommodation such as the 'Dutch miracle' (Hemerijk and Visser, 2000). -p*tci S'.x !A| : HANi.,f do more than two per cent of working couple households follow the dual carer model with both partners in part-time work. Similarly, fewer than 2 per cent of working couples follow the reversed traditional pattern of female full-time, male part-time employment (Eurostat 20O2i>). For the vast majority, the division is between themodified industrial and the dual bread-winner pattern. ~~ The proportion of dual earner households is rising across Europe, as part of the shift towards a post-industrial society, and accounts for at least 60 per cent of ail couple households supported through work everywhere except in Greece, Italy, and Ireland, where it exceeds 45 per cent. In all cases, among working couples without children at least two-and-a-half times as many follow the dual earner as follow the modified industrial pattern. However, among rhose with children, there is a rapid shift to the modified industrial model, which predominates for this group in the United Kingdom, Germany, and the Netherlands, and is widespread in the other corporatist and liberal countries with the exception of France (Eurostat 2002b). Table 1.2 shows how motherhood reduces women's engagement with work to a very limited extent in Nordic countries, but nas a much greater impact in the corporatist, liberal, and particularly Mediterranean context, in corporatist and liberal countries, mothers who remain in work are much more likely to do so part time. More detailed analysts of trends between 1984 and 1999 in employment patterns in couple households with a young dependent child (under six) points to a wider impact of child care on women's paid work across the corporatist countries and the United Kingdom. Everywhere there is a trend away from the traditional model of man in full-time work, woman as full-time unwaged mother, which was dominant in 19S4. However, in the Mediterranean countries the majority of those mothers who work do so full time, while in corporatist continental Europe and the United Kingdom, mothers tend to work part time. France with its extensive child support policies is again the exception (OECD 20orc: table 4.2). In relation to long-term care, a recent European study shows that midlife informal care is associated with 'reductions in work hours or exit from the labour force' which is not recovered after care responsibilities end (Spiess and Schneider (2002:33). Regime theory broadly corresponds to patterns of both welfare state inputs and of outcomes in relation to the balance of care and paid work for women and men. However, these outcomes are produced through different means as the following chapters show. In Nordic countries, state support Iři f'l 'IR ta'i'lok (ii >ü;>'i Table 1-2 Women's employment and child care % Women aged 25-55 in Share of part-time employment employment, 2000 for women, aged 25-55, 2001 No One Two All women Those with a children child children child under six Denmark 78-S 88.1 77-2 20.S 6.t Finland 79-2 78-5 73-5 n.a. n.a. Sweden 81.9 80.6 81.8 n.a. n.a. Austria 76.O 7S.6 Ö5-7 24.8 50-4 Belgium 65-Ö 71.8 69-3 33-4 45-0 France 73.5 74-1 58.S 23.8 3*wf?«£, to include thedistinctions (which are most marked in relation to family policies) within the corporatist category and to analyse welfare goals in terms of recommodification and flexibility as well_as decommodification and stratification. In general, Nordic countries secure higher labour market participation overall and among women and mothers; corporatist societies come next, followed by the Mediterranean societies. The liberal_regime suc-ceeds in activating some population groups but provides less support for women and young people. We now move on to consider the role of the European Union. The European Union and New Social Rrisks The growing importance of new risks opens up particular opportunities for the European Union in welfare policy-making, which we discuss in Chapter 8. Although the 1957 Treaty of Rome called on member states to cooperate to improve living standards and working conditions (article 117) and article ir8 referred to 'close cooperation' in social security, attempts to develop a positive social policy, alongside economic policy have met with limited success. These attempts are encapsulated in the rebuff to the 1993 Green Paper on European Social Policy (EC, 1993a: part III), which led to no positive policy proposals, while an Employment White Paper in the same year advanced a different set of priorities, promoting mjmetary stability and an open and decentralised labour market characterised by greater flexibility (EC, igg^b: r2-r6). Economic policy co-ordination has enjoyed spectacular N I- vV r! I s AN!1 iOe. IAI . HAM success in the creation of a common currency and an open market across much of Europe. Social policy has only progressed in areas directly relevant to economic issues, such as equal rights for women in training, education, employment and pay, or the use of structural funds to foster employment opportunities (Geyer, 2001: ch. 9). The official summary of recent developments in employment policies highlights measures to address new risks: Activation has become the main theme of labour market policy reforms .., member states have sought to increase financial incentives to take up work ... accompanied by increased pressure on those on benefits to participate in active labour market programmes, to intensify their efforts to look for work and to accept job offers. ... In many parts of the Union, childcare support and parental leave arrangements have been improved to make it easier for women to take up paid employment. (EU, \ 2002a: S-9). Social inclusion policy is also directed primarily at the risks associated with access to employment: A stable job providing a steady source of income is recognised as the key factor in preventing social exclusion . .. improvements in childcare and parental leave ... are relevant social inclusion policies, especially when they focus on the vulnerable group of lone parents to help case the difficult transition from benefits into paid employment. Some member states have sought to ensure equitable access to education and training, while a few have sought to enhance job opportunities for immigrants and ethnic minorities. (EU, 2002a: 7-8). The EU social policy is at an early stage of development. However, it seems that attempts to intervene in relation to the 'old risk' areas of social insurance and taxation have not been successful. The chief social policy areas in which EU policies command consensus have been in relation to more equal opportunities in emplqym2gnjt_and in the use of the OpgnMethod 0f Co-ordination to advance employability, entrepreneurship, and adaptability in thelabour market. These policies address the new social risks of balancing work and family and gaining access to employment, and proceed by encouraging progress towards common goals rather than attempting to impose a legal harmonisation of national poiicy instruments. As the European Union develops, its capacity to support new risk policy-making may become stronger. This must be set in the context of the progress of EU economic policies which stress market freedoms. Open markets may expand the availability of jobs, but also increase the risks for more vulnerable groups and the need for further policy-development to deai with the problems that emerge. £r>o«.*e5 The Emergence of and Response to New Social Risks New social risk issuesfiaveentered^^ at different periods and have met with varying responses. The pace of reform also differs. It is the regime frameworks, structured by old social risk policies, that are likely to exert the strongest influence on the recognition and experience of new social risks. In the Nordic context, the well-established care services and the active labour market policies^mitigate' the impact of the new risks. Citizens are well supported in balancing paid work and domestic care, and in gaining access to work. In this setting, the most pressing new social risks are likely to concern groups such as migrants who have weaker access to existing policies, or to derive from the expansion of private provision. In corporatist countries, the established compromises between social partners and government privilege the interests of core workers, and assumptions about gender roles delay the development of collective provision. New social risks are likely to emerge in an acute form and policy responses have to be [ deferred. The Kberal model tends to offer market solutions to new social risk needs, so that access to care is unequal, and labour market policies prioritise limited and incentive-based approaches, excluding vulnerable groups. The Mediterranean context assumes a family basis for social care and more corporatist labour markets, with a large informal sector, so that new risks become pressing in relation to women's employment and the security of those unable to gain access to established jobs. Second, the sjiiftsuvgaradigm and policy discourse and in the recalibra-tion of policy regime required by new risks will differ in different national contexts. Policy contests will be more intense and efforts to legitimate changes in policy assumptions and individual behaviour more marked where the divisions between social groups are most strongly entrenched in the existing welfare system, and where the resources of social solidarltytp sustain new policies in the interests of minorities are weakest. Nordic courK tries with their established broad solidarity find it easier to develop inclus- j ■ ive new risk poiicies, and to pursue them through state interventions. In ' corporatist systems, where new risk issues cut across established insider/ outsider labour market and public/private family divisions, redirection of policy provokes more intense conflict, and blame avoidance is significant. It is difficult to introduce new instruments, so policy typically modifies the existing settlement. In liberal countries, with their orientation towards private solutions, conflict will surround not so much the need to meet the new risks as the role of the state in doing so, but governments will find the strict regulation of private services in a flexible economy difficult. In J Mediterranean countries, changes in women's involvement in paid work \ impose severe stresses on traditional patterns of family support and are i likely to produce conflicts over whether and how far government should { intervene in this area. \ New social risks apply immediately tojnnrinonties. While opportunities to gain access to decision-making vary between countries, new risk minorities tend everywhere politically to be weaker than the established policy actors: tradejynions. employers, and business. Those new risks which relate to the interests of actors who are more powerful than the immediate bearers of the risks (most importantly those which restrict the availability of workers and damage competitiveness) are likely to be most prominent on the political agenda. The risks which relate to the mobilisation of the working population will tend to attract most attention, followed by child care and then the care needs of older people Thus new sociaj_risks will involve debates abou t publicre^ponsibili ties jn^ejfajr^j^ ventions in different regimes, with an overall emphasis on increased involvement in paid work. A New Direction for European Welfare States The welfare politics of new risks provides opportunities for the develop-ment of positive-sum policies which deliver gains to some groups without major penalties for others—for example, moderate-cost child care provision which enables more women to enter the labour market and reduces child poverty, or training programmes which assist those with obsolete skills to find work and aid national productivity. They also enable the formation of constellations of political interests more influential than the_ , risk-bearers themselves, who may promote reform programmes that out- ;\. flank the defensive and sometimes intractable attrition struggles of much traditional welfare policy-making. For these reasons, recognition of the significance of new risks alongside old risks adds an important rider to the .. bleak conclusions of work on permanent austerity. Pierson ends his ';..'" ■' influential study of The New Politics of Welfare (zooih: 456): while reform agendas vary quite substantially across regime types, alt of them place a priority on cost containment, This shared emphasis reflects the onset of permanent austerity ... the control of public expenditure is a central, if not dominant consideration ... the contemporary climate remains a harsh one for efforts to improve social provision ... or to address newly recognized risks. New social risks may involve policy developments that are significant and positive but which may not figure in traditional approaches to the study of welfare states, because they are not primarily concerned with issues of retrenchment and spending constraint. Instead they involve the problems of constructing constituencies of support across different social actors for new policy departures. 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The reform debate has further intensified since the parliamentary elections in September 2002. The current term has seen hectic legislative activities in almost all fields of social policy. In this chapter, we focus on one particular aspect of welfare state development in Germany, the emergence of, and the reaction to, new social risks. The German social policy tradition, structured to meet the needs of traditional breadwinners within an industrial labour market, faces sharp challenges from shifts in family roles and from the rise of non-standard employment (Esping-Andersen, 1999). The conservative welfare regime exerts a strong influence on the way in which new social risks emerge, and the policy-making framework with its multiple checks and balances imposes constraints on the response to them. We first examine how the interplay between the general socio-economic changes outlined in Chapter 1 and national welfare state institutions has shaped the emergence of new social risks. Then we turn to discourses and policy developments and 'Thanks for useful comments on earlier drafts go to Hellmut Woilmann, Karl Kinrichs, .Peter Taylor-Gooby, and other members of the WRAMSOC team.