European Social Model: No Convergence from the East

Abstract

Abstract Quantitative evidence based on social expenditure suggests that since Esping‐Andersen's seminal study on welfare regimes, there has been a certain general convergence towards a European Social Model (ESM). The data, controlled for cyclical and demographic effects, show that, in recent years, social expenditures of EU‐15 member states have converged, whereas in the mature non‐EU welfare states this has not been the case. In this long‐term quantitative view, a tentative suggestion would be that Europeanization might be prevailing over path dependence of distinct models. However, the data also show a certain deviation from the model — the post‐communist new member states (NMS) form a distinct group. This is confirmed by a cluster analysis based on social benefit generosity. To provide a background to these findings and, especially, to highlight the avenues for further investigation, the paper also looks at the institutional arrangements in the NMS. In particular, it draws attention to pension systems as a particularly sizeable component of the welfare state to illustrate how far most of the post‐communist EU members diverge in terms of the institutional arrangements of their welfare systems. It seems, then, that while the 'deepening' of European integration in other policy areas has been accompanied by a convergence towards a ESM in the EU‐15 countries, the 'widening' of the EU has meant, at the same time, that there is now a group of states within the EU that diverge significantly from the dominant model. Key Words: Deepening and wideningEU integrationEuropean Social Modelsocial policywelfare regimepensions Acknowledgement Olaf van Vliet gratefully acknowledges Stichting Instituut GAK for financial support. Notes 1. 'Race to the bottom' refers to the notion that due to the pressures of globalization, states will engage in competitive cutting of tax rates, with the natural outcome that they will also have to decrease social protection, which they will not be able to finance at previous rates. 2. From the EU‐25, the following countries are not included in Fenger (Citation2007): Cyprus, Ireland, Luxembourg, Malta, Portugal and Slovenia; in Vasconcelos Ferreira and Figueiredo (Citation2005), these are: Cyprus, Malta and Luxembourg. 3. Bulgaria, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia. 4. With each recent enlargement, existing member states can apply a transitional period of up to seven years of curbing access to their labour market to the citizens of newly acceding countries. 5. Another remarkable difference is that the total public social expenditures measure of the OECD includes spending on active labour market policies, whereas the Eurostat measure does not. 6. However, slight declines in the variance measures for the corrected data for the twenty‐five countries in the last two years (not shown here), may indicate a start of a converging trend. 7. More precisely, Cyprus and Ireland are in the sub‐cluster of Spain and Hungary. 8. A third difference between the two studies is that in Fenger's study Slovenia, Cyprus, Malta and Portugal are not included.

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