EMU and European Welfare States: Crisis Impact in Comparative Perspective

This paper aims at providing a first stab at the development of welfare states in Europe after the Great Recession. Draconian austerity policies implemented especially after the so-called sovereign debt crisis continue to have European citizens worried. Not only public and policy-practitioner debates but also scholarly conversations typically feature scenarios of radical cutbacks. Are these apprehensive expectations justified? How much change has there been in Europe’s welfare states? In answering these questions, the paper compares welfare state trajectories in three periods: the run-up to EMU membership (1991-2001), ‘normal life’ in EMU (2002-2007) and crisis years (2008-2015). For each of these periods, the paper presents evidence based on multi-method measurement of two influential conceptualizations of the welfare state: ‘welfare effort’ and ‘social rights’. It analyzes quantitative indicators of (i) welfare effort based on expenditure data from the OECD’s Social Expenditure Database, and (ii) legislated social rights based on data from the Comparative Welfare Entitlements Database. Overall, both sets of evidence show that apprehensive scenarios are generally not borne out by empirical evidence as governments in Europe managed to maintain their social provision standards, even in the face of dramatic cost-containment pressures after the Great Recession. The paper also shows that the pace at which welfare states changed is not much different in these post-crisis years than those that characterize the pre-crisis periods.