The Comparative Political Economy of Social Assistance Benefits

With the return of mass unemployment and the substantial cutbacks in first-tire social insurance across many European and other OECD countries, social assistance benefits have become more important as a safeguard against low income and poverty. Remarkably, in comparison to other welfare state programmes, the comparative political economy literature has paid little attention to the developments of social assistance benefit schemes. In this paper, we analyse the determinants of the cross-national variation in social assistance benefits. As such, this paper aims to make two contributions. First, this paper develops hypotheses regarding several socio-economic, political and institutional factors which may explain the variation in the developments of social assistance benefits across countries and over time. Such factors have been extensively analysed for unemployment benefit schemes, active labour market policies and pension schemes, but not for social assistance benefits. In this respect, this paper aims to make a theoretical contribution to the comparative political economy literature. The second contribution has an empirical character. One explanation for the lack of scholarly attention for social assistance benefits is the limited availability of data. Cross-national data on social expenditures and income replacement rates are available for several welfare state programmes, but not for social assistance benefits. Presenting new indicators on benefit levels and replacement rates, this paper analyses the developments of social assistance benefits across 26 OECD countries over the past two decades.