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Welfare State Retrenchment: The Partisan Effect Revisited

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Author Info
Bruno Amable () (University of Paris X-Nanterre, PSE and CEPREMAP)
Donatella Gatti () (University of Lyon 2, PSE, CEPREMAP and IZA Bonn)
Jan Schumacher () (University of Mainz)

Additional information is available for the following registered author(s):

Abstract

This paper aims to shed light on the role of the ’ideology’ of political parties in shaping the evolution of the welfare state in 18 developed democracies, by providing empirical findings on the determinants of social programs entitlements and social spending over the period 1981-1999. The paper shows that structural change is a major determinant of the extent of social protection. Our results suggest that overall spending is driven up by structural change. On the other hand, strong structural change has a negative influence on welfare entitlements measured by net replacement rates of sickness insurance or unemployment benefits. Partisan influence plays an important role in the dynamics of the welfare state. Left-wing governments strengthen the positive effect of shocks on aggregate social expenditure while right-wing governments undertake even stronger cutbacks in replacement rates as a reaction to structural change.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1995.

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Length: 31 pages
Date of creation: Mar 2006
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Handle: RePEc:iza:izadps:dp1995

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Related research
Keywords: welfare state; ideology; structural change;

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Find related papers by JEL classification:
H5 - Public Economics - - National Government Expenditures and Related Policies
I1 - Health, Education, and Welfare - - Health
J8 - Labor and Demographic Economics - - Labor Standards

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Gian Maria Milesi-Ferretti & Roberto Perotti & Massimo Rostagno, 2002. "Electoral Systems And Public Spending," The Quarterly Journal of Economics, MIT Press, vol. 117(2), pages 609-657, May. [Downloadable!] (restricted)
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  2. Boeri, Tito & Nicoletti, Giuseppe & Scarpetta, Stefano, 2000. "Regulation And Labour Market Performance," CEPR Discussion Papers 2420, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  3. Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084 Elsevier. [Downloadable!] (restricted)
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  4. Braumoeller, Bear F., 2004. "Hypothesis Testing and Multiplicative Interaction Terms," International Organization, Cambridge University Press, vol. 58(04), pages 807-820, October. [Downloadable!]
  5. Persson, Torsten & Tabellini, Guido, 1997. "Political Economics and Macroeconomic Policy," CEPR Discussion Papers 1759, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  6. Torben M. Andersen, 2003. "European integration and the welfare state," Journal of Population Economics, Springer, vol. 16(1), pages 1-19, 02. [Downloadable!] (restricted)
  7. Alesina, Alberto & Wacziarg, Romain, 1998. "Openness, country size and government," Journal of Public Economics, Elsevier, vol. 69(3), pages 305-321, September. [Downloadable!] (restricted)
  8. Persson, Torsten & Tabellini, Guido, 1998. "The size and scope of government: Comparative politics with rational politicians," Seminar Papers 658, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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  9. Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-55, December. [Downloadable!] (restricted)
  10. Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2001. "Why Doesn't The US Have a European-Style Welfare State?," Harvard Institute of Economic Research Working Papers 1933, Harvard - Institute of Economic Research. [Downloadable!]
  11. Lilien, David M, 1982. "Sectoral Shifts and Cyclical Unemployment," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 777-93, August. [Downloadable!] (restricted)
  12. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages C1-33, March. [Downloadable!] (restricted)
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  13. Alessandro Lizzeri & Nicola Persico, 2001. "The Provision of Public Goods under Alternative Electoral Incentives," American Economic Review, American Economic Association, vol. 91(1), pages 225-239, March. [Downloadable!] (restricted)
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  14. Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2001. "Why Doesn't the US Have a European-Style Welfare System?," NBER Working Papers 8524, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Torsten Persson & Gerard Roland & Guido Tabellini, 2003. "How Do Electoral Rules Shape Party Structures, Government Coalitions, and Economic Policies?," NBER Working Papers 10176, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  16. Torsten Persson, 2002. "Do Political Institutions Shape Economic Policy?," Econometrica, Econometric Society, vol. 70(3), pages 883-905, May. [Downloadable!] (restricted)
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  17. Dani Rodrik, 1998. "Why Do More Open Economies Have Bigger Governments?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 997-1032, October. [Downloadable!] (restricted)
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  18. Abraham, Katharine G & Katz, Lawrence F, 1986. "Cyclical Unemployment: Sectoral Shifts or Aggregate Disturbances?," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 507-22, June. [Downloadable!] (restricted)
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  19. Bruno Amable & Donatella Gatti, 2005. "The political economy of job protection and income redistribution," PSE Working Papers 2005-12, PSE (Ecole normale supérieure). [Downloadable!]
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Bruno Amable & Lilas Demmou & Donatella Gatti, 2007. "Employment Performance and Institutions: New Answers to an Old Question," IZA Discussion Papers 2731, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Bruno Amable & Lilas Demmou & Donatella Gatti, 2006. "Institutions, unemployment and inactivity in the OECD countries," PSE Working Papers 2006-16, PSE (Ecole normale supérieure). [Downloadable!]
  3. Robert Boyer, 2007. "Growth strategies and poverty reduction: the institutional complementarity hypothesis," PSE Working Papers 2007-43, PSE (Ecole normale supérieure). [Downloadable!]
  4. Gatti, Donatella, 2008. "Macroeconomic Effects of Ownership Structure in OECD Countries," IZA Discussion Papers 3415, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. Bruno Amable & Donatella Gatti & Elvire Guillaud, 2008. "How does party fractionalization convey preferences for redistribution in parliamentary democracies?," PSE Working Papers 2008-42, PSE (Ecole normale supérieure). [Downloadable!]
    Other versions:
  6. Bruno Amable & Donatella Gatti, 2005. "The political economy of job protection and income redistribution," PSE Working Papers 2005-12, PSE (Ecole normale supérieure). [Downloadable!]
    Other versions:
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