Prospects for Further Research and the Transformed Welfare State Constellation

In view of the radical changes that social policy has undergone worldwide, this comparative study has systematically explored how economic, social and political inequalities have been affected by the transformations of the welfare state and its central policies. The study covers both classical social policies and some neighbouring policy areas like taxes, migration and education. The findings may inform both decision-makers in international organizations and domestic policy-makers about the degree and conditions of the effectiveness of welfare policies in the light of their distributional outcomes, and provide insights into broad trends of welfare state transformation.

Notwithstanding the various contributions of this study, our results also raise new issues and pose new puzzles for future research on the effects of changing governmental activities in the welfare sector on social inequality. Further studies are necessary to fully explore the implications of transformations of the welfare state in different social policies for the multi-dimensional inequality landscape of OECD countries.

Corresponding to the relatively broad Scandinavian concept of the welfare state that embraces all public responsibilities except for military tasks, future research should assess the possibility of transferring the theoretical and methodological approaches of our analyses to the study of other public policies like primary education, special needs education, economic policy, housing and social assistance. So, how have policy changes in primary education such as the introduction of obligatory kindergarten attendance in some countries affected the inequality in opportunity of young generations? Furthermore, a systematic analysis of the institutional and political spillover effects of and complementarities among different policy areas—especially regarding the integrative function of education and training—has not been undertaken in sufficient depth, and thus is an important task left to future research.

Based on our findings, various questions in different policy areas should be addressed by social policy scholars. Increased inequality among EU citizens and the resulting cross-border movements reinforce welfare state boundaries and restrict mobility rights (see Roos in this volume). This raises the question: what kind of inequality can be morally accepted? (See also Gosepath in this volume.) When we see EU freedom rights as granting life chances, this discussion seems to become more urgent as opportunities for spatial mobility and its attendant effects on social mobility are increasingly attainable only for already socially advantaged EU citizens. Furthermore, future research on the effects of global social policy on inequalities (see also Kaasch in this volume) could employ case studies of especially ‘vulnerable’ groups of society such as the young and persons with atypical employment or disabilities. In family policy (see Dingeldey in this volume), comparative research should assess whether the particular development of the German model is exemplary for other coordinated market economies when combined with conservative welfare states, or whether other gender models do induce different social outcomes. Also, coordinated market economies should be contrasted with liberal ones.

The results of the studies in this volume may also be used to comparatively analyze the potential influences of welfare state reforms not only on economic inequality but also on the equality of opportunity and political representation in other geographical regions of the globe. For example, are there any mechanisms at work in developing nations that are comparable to those in the OECD world examined here? Comparative research of and within a larger number of geographic regions may offer a broader and, therefore, more general contribution to the study of inequality as transformed by recent welfare state change. Further studies should also assess the development of social policy regionalism (Bianculli and Hoffmann 2016)—that is, the delegation of policies and political authority to regional institutions—in other world regions, such as the Association of Southeast Asian Nations (ASEAN) or the African Union, and its outcomes. For example, it would be fruitful to elaborate the specific conditions and forces driving policy diffusion of particular ideas and institutional settings of OECD countries to other parts of the world. Such research could contribute to knowledge on how Western-style policies and modes of governance have travelled and turned into a global template for social policy reform initiatives to address current inequality issues.

The socio-political consequences of welfare state reforms are another string of topics not covered in depth here. Political reforms may be perceived very differently by the groups affected (like retirees, students or workers) than they are by the initiating politicians. How are the changes in outcomes evaluated by societal stakeholders, and how does this translate into actual social movements? Empirical findings on such issues would further our understanding of the real world impact of macro-level reforms on micro-level actors and of potential feedback loops back from the micro- to the macro-level.

Related to perceptions of various stakeholders, the crucial topic for the sustainability of the transformed welfare state is its democratic legitimacy. Does the latest upsurge in economic inequality and do the observed policy reactions damage the democratic foundations of national welfare states? While legitimacy of and public opinion on the transformed welfare state constellation need to be researched in more depth, our results point to damages for democratic legitimacy. During the so-called Golden Age of the national state, full employment, steadily increasing real wages, high levels of growth and the continuous expansion of compensatory social policy legitimized representative democracy and, at the same time, democratically legitimized the welfare state itself (Busemeyer et al. 2013). In other words, democratic political structures were legitimized by steadily increasing economic prosperity and social security shared by all voters (Przeworski 2010). Against today’s background of slow or even negative growth rates and market pressures pushing for unequal distribution in recent years, the transformed welfare state can no more rely on this gratuitous external source of legitimacy. Thus, in order to sustain the supply- oriented welfare state, the content and outcomes of such social policy changes need to convince a political majority per se plus again and again.

In terms of distribution, the paradigmatic ambition backing the s upply-oriented welfare state is increased equality of opportunity plus equality of gross outcomes through social investment and more incentives to raise employment and self-reliance. The volume has shown that these pre-distributive policies can indeed be successful if applied sensibly, such as through public subsidies for education and higher risk solidarity in healthcare financing. However, the window of opportunity for such policy-making is limited by trends in market pressures that consistently push for higher gross inequality. Therefore, sensible supply-oriented policies need to complement rather than substitute for ‘old fashioned’ compensatory social policies. Otherwise, gross inequality will continue to transform into growing net inequality, producing detrimental social outcomes and severely undermining the legitimacy of the transformed welfare state itself.

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