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A comparison of welfare

regimes (Germany UK

By Bünyamin Güler
 What is welfare ?
 Esping Andersen analysis
 Welfare regime in Germany (History Goals and
 Welfare regime in U.K (…)
 Welfare regime in Sweden(…)
 Comparison’s and graphs
 Conclusion
 Discussion
What is Welfare ?
A social welfare provision refers to any program which
seeks to provide a minimum level of income, service or
other support for many marginalized groups such as the
poor, elderly, and disabled people.

Social welfare programs are undertaken

by governments as well as non-governmental
organizations (NGO's).

Social welfare payments and services are typically

provided at the expense of taxpayers generally, funded
by benefactors, or by compulsory enrollment of the poor
Sources :R.M. Blank (2001). "Welfare Programs, Economics of," International Encyclopedia of the Social & Behavioral Sciences
What is welfare ?
 Examples of social welfare services include the
 Compulsory pension savings programs.
 Compulsory social insurance programs, often based on
income, to pay for the social welfare service being
 Pensions or other financial aid, including social
security and tax relief, to those with low incomes or
inability to meet basic living costs, especially those who
are raising children, elderly, unemployed, injured, sick or
 Free or low cost nursing, doctor medical and hospital
care for those who are sick, injured or unable to care for
Sources : (19.02.2009)
What is welfare ?
 Welfare money paid to persons, from a government, who
are in need of financial assistance but who are unable
to work for pay.
 Free or low cost public education for all children,
and financial aid, sometimes as a scholarship or
pension, sometimes in the form of a suspensory loan, to
students attending academic institutions or undertaking
vocational training.

Sources :
Gøsta Esping-Andersen’s
Gøsta Esping-Andersen (born 1947) is
a Danish sociologist and author of many
books on the subject. His primary focus in
the field is on the welfare state and its
place in capitalist economies. Esping-
Andersen is a professor at Pompeu Fabra
University in Barcelona and member of
the Scientific Committee of the Juan
March Institute(Madrid).

Sources. (13.02.2009)

Gøsta Esping-Andersen’s

Sources. (13.02.2009)

Describing welfare states
 Three types pf welfare states
 Liberal
 Social democratic
 Conservative
Liberal welfare states
 Market-based social security schemes
 Private schemes
 Means-testing
 Limited benefits
 ‘A blend of a relative equality of poverty
among state-welfare recipients, market
differentiated welfare among the majorities.’
(Esping Anderson)
 Examples: USA, UK
Social-Democratic welfare
 Universalism and equality
 Redistribution of wealth

 High benefits

 State organized childcare

 Encourage women to work

 Examples: Scandinavian countries

Conservative welfare state
 Maintain the differences between social
 No distribution of wealth.

 Traditional role models are protected.

 Examples: Germany
Welfare in Germany (History)
 1883 Workers’ health insurance
 1884 Industrial accident insurance
 1889 Invalidity and old-age insurance
 1911 Reich insurance system extended to civil
servants / white-collar workers
 1927 Unemployment insurance
 Characteristics:
 Contribution financed, not tax financed, no pay-as-you-go
 Contributions shared: 50% paid by employer, 50% by
 Widely supported by middle class

Sources: (14.02.2009)

Welfare in Germany
 Unemployment insurance
 Health care insurance

 Pension insurance

 Long-term care insurance

 Social assistance
Welfare in Germany
 Capital flight is a problem as German companies increasingly invest
 Germany's cash-transfer/benefit social system has the added
disadvantage that German recipients can consume these benefits
abroad (e.g., retired Germans living in Spain).
 Germany's chief problem is that its reliance on contributions,
especially for pension and unemployment, coupled with unfavorable
demographics (aging population) and persisted high unemployment
makes it increasingly difficult to finance the system.
 Mandated by European Union rules and fiscal prudence, the
government can no longer as easily service these social security
deficits through government transfers from the budget as in the

Sources: (14.02.2009)

Welfare in UK
 The United Kingdom's current welfare system began to take shape after
World War II and has continued to change for the following thirty years.
 Welfare benefits in the U.K. include five separate groups of services, which
are cash benefits, health care, education, housing, and the personal social
 The most widely used form in the U.K. are cash benefits that make up
around 10% of the Gross Domestic Product (GDP).
 Health care is the second major part of the U.K.‘ s welfare system. It is
organized through the National Health Service (NHS) and financed by taxes.
 Education is available to all school age children through the ages of five to
sixteen. Yet, as children reach the age of sixteen, fewer lower class children
move on to further their education and move, instead, directly into the work

Sources: (14.02.2009)

Welfare in U.K (Problems)
 As in most other western countries, the aging of the population is
one of the biggest challenges for the welfare state in the U.K.

 Problem in the U.K. have been the low benefit levels. For example,
pension benefits are less than half of a person's active salary.

 Another very important issue affecting social policy is the level of


Sources: (14.02.2009)

Welfare in Sweden
 The welfare state in Sweden was established in the 1930s
 It is usually categorized as a mean way between a capitalist
economy and a socialist economy. Some have referred to it as the
most developed form of capitalism.
 Health care and social welfare services are regarded as very
important parts of the total Swedish welfare system. Both are seen
as public sector responsibilities, which are supported by a national
social insurance system.
 If a person is ill, or must stay home to care for sick children, he/she
receives a taxable daily allowance, 65-90% of lost income,
depending on the length of the absence.

Sources: (14.02.2009)

Welfare in Sweden
 When a child is born, the parents are legally entitled to a total of
twelve months paid leave from work, which can be shared between
them and used any time before the child's 8th birthday. They also
receive a tax-free child allowance, equal for everyone, until the
child's 16th birthday.

 A basic old-age pension, financed by both employees and

employers, is payable to everyone from the age of 65. The State
also pays an income-related supplementary pension financed from
employer payroll fees

 Nine years of schooling are compulsory for all children from the age
of 6 or 7. Over 90% go on to the upper secondary school, which
offers both vocational and academic courses. Schools are run by
municipalities and provide free instruction, books and lunches.
Sources: (14.02.2009)
Graph’ s and Comparison

Sources: (19.02.2009)
Graph’ s and Comparison

Sources: (19.02.2009)
Graph’ s and Comparison

Sources: (19.02.2009)
Graph’ s and Comparison

Sources: (19.02.2009)
 Doespopulation have any effect on welfare?
And What would happen when Germany
changes welfare system to social democratic
? (Would it be better or worse ?)
R.M. Blank (2001). "Welfare Programs, Economics of," International
Encyclopedia of the Social & Behavioral Sciences
Gracias por su atención