Incomes and the Welfare State in Southern Europe during the Crisis

On the eve of the Eurozone crisis, average living standards in the southern periphery, adjusted for purchasing power, had converged considerably vis-à-vis the rest of Europe. By 2017, all four countries had lost ground, Greece most dramatically. At the same time, as the demand for social protection increased because of the crisis, its supply was ‘retrenched’ because of the austerity. The paper investigates changes in the distribution of jobs, earnings, incomes and social benefits in Portugal, Spain, Italy and Greece. It attempts to shed light on a number of questions: What are the social implications of southern Europe’s economic decline relative to the rest of the EU? Have poverty and inequality risen in tandem, or have incomes become lower but less unequally distributed? Which social groups were worst affected, and which came out relatively unscathed? What was the role of the welfare state in softening the impact of the crisis on individuals and their families? Have recent policy reforms left the south European model of social protection in disarray? Or have southern European welfare states become leaner and more effective?