Graffiti de pandillas

Though there are disagreements, students of the welfare state agree on certain economic changes affecting the environment of modern welfare states (see for example, Pfaller et rrl.. 1991; Pierson. 1991; Taylor-Goohy, 1991_ Esping-Andersen, 1994: OECD. 1988. 1994a). One of these sets of factors concerns changes in the economic environment, including the glohalisation of production, the rise of the emerging economies of East Asia. de-industrialisation. the exposure of governments to global financial markets and (for some) the end of the capacity of states to design their own political economic regime. One commonly perceived

casualty of these shifts is full employment in its traditional sense and the emergence of atypical work. Moreover, pressures mount to cut labour costs, both direct and indirect, in advanced economies, with impacts on taxation, public finances and public spending. These pressures on the labour market and fiscal policy pose questions about traditional features of the welfare state in general and social assistance in particular.

One set of political changes concerns the effect of rising affluence and changing life styles on consumption patterns: it is contended that these undermine political support for traditional universal programmes in favour of differentiated services. Another school of theorists emphasises the effect of growing inequality and new divisions in society on older patterns of solidarity and the impetus for the more affluent to exit from state programmes. Either way. it is argued. political support for inclusive patterns of social provision ebbs.

The particular pressures driving policy change in the area of social assistance can be seen as falling into two groups: first those deriving from forces external to the structure of benefit systems themselves, and secondly those resulting from internal features of policy systems.

New demands from external. j areas demography

Although changing demographic patterns particularly population ageing _ are widely seen as posing a severe challenge for public pension systems, the so-called 'demographic crisis' actually impinges remarkably little on debates about the future of social assistance. This is because in most OECD countries social assistance spending on older people represents a declining share of an already small proportion of total expenditure on social security. The incomes of older people in many countries have increased, partly because of the maturation and improvement of pension schemes. and in a number of countries even poorer older people are protected from having claim assistance by the presence of minimum, non- contributory citizens' pensions. It is the future viability of insurance pension schemes themselves which most excites political debate in many countries of the world.

Older people are more likely to be receiving assistance in the English-speaking countries, where social assistance covers larger proportions of the population. However, the population structures of Australia, New Zealand, the USA, Canada. and Ireland are relatively youthful, whilst the UK has already effectively undergone much of the ageing process. In Australia, there has been some increase in the targeting of pensions. In New Zealand, a more concerted attempt to restrain expenditure has been made, including the taxation of benefits and their de-linking from earning

s. Yet even here, demographic pressures do not in themselves appear to be significant causes.

Where ageing is impacting on social assistance, it is in the area of long-term care of older people. which _{has been creating considerable difficulties in Austria, Germany}

and the UK, in particular. This has led to policy responses such as the creation of the new long-term care insurance in Germany, whil.e in the UK older people are having to rely to a greater extent on their own private resources.

• changing family structures

Fundamental shifts have occurred in the role of women, which impact both on the labour market and on family structure. The rise of divorce, lone parenthood and other non-traditional family forms are examples of common trends, despite significant structural differences across nations. More young people are living apart from their families, which is likely to be one reason why increasing numbers of assistance recipients in some countries are young, single people. One policy response, in the UK. has been to reduce the availability of benefits to people under 18, unless in demonstrable hardship.

Ideas about family obligations and relationships more generally have also been shifting. The rise of cohabitation. for example, has led some countries, such as the Netherlands. to review its payment structure for people sharing households and to shift the burden of proof of non-cohabitation more on to claimants. Cohabitation in the Nordic countries, on the other hand, seems to be regarded as unproblematic in relation to social assistance.

• labour market change

The importance of increasing unemployment - and particularly long-term unemployment as a factor in increasing claims for social assistance has already been emphasised. The changing nature of the labour market in all the industrialised countries has also reduced opportunities for unskilled work, necessitating more pro-active approaches to re-training and job creation. The concentration of long- term unemployment amongst unskilled workers also leads to potential `social exclusion', as the social and labour market difficulties of assistance recipients multiply and deepen. Policy approaches to deal with these problems are considered in more detail below.

• rising housing and fuel cost problems

Another significant factor driving the increase in costs of social assistance in some countries is a rise in housing costs. In the UK, for example, expenditure on Housing Benefit has risen faster than that on Income Support. not primarily because the number of claimants has grown dramatically, but because it has been Government policy to allow rents to rise closer to market levels. Similar pressures have been experienced in a number of other countries.

Pressures f-om within the policy systems

A number of related pressures which impact on social assistance policy stem from within the structure of social security systems themselves. These include:

• the breakdown oftraditional social insurance coverage

Limits to duration of unemployment insurance mean that with longer-term unemployment fewer people are covered. With higher youth unemployment, there are more unemployed young people without entitlement to insurance benefits. This is alleviated in some countries in particular, the Benelux countries _-._ by giving education leavers special entitlement to short-term, non-contributory insurance benefits. The growth in lone parenthood has also exposed gaps in insurance coverage.

• pressures on public expenditure

Pressures on public expenditure on social programmes is common to all the countries in the study to some degree. In most countries where social assistance

represents only a minor expenditure. costs have not in themselves been a major issue. but containment of expenditure on other insurance programmes is sometimes leading to increased claiming of assistance benefits.

s

The individual country chapters in Volume Two, and Chapter Four in this volume. show how in several of the countries with centralllocal cost-sharing for social assistance there has been pressure on local authorities to assume greater responsibility for expenditure. This has happened either through direct reductions in central government subsidies, as in Canada from 1996 onwards. or by local authorities being given cash-limited block funding for exceptional needs expenditure. as in the Netherlands. Such changes may lead to greater geographical variation or inequity, as some of the areas with the most difficulty financing assistance are also those with the highest numbers of claimants.

• public sector staffing

A related issue of costs applies to the staffing of public sector welfare agencies. There is a general pressure to simplify systems that are complex and staff-.intensive, as is often the case in social assistance. In the countries with a tradition of linking social work intervention closely with cash assistance. however, such a pressure results in tensions between a streamlined income maintenance role and the traditional casework approach. Such tensions have been particularly evident in the Nordic countries.

it was stated above that unemployment and labour market change were amongst the factors driving policy on social assistance. We now consider in more detail the different policy approaches to job search activity and work incentives.

Unemployment and work incentives

The pressures outlined above impinge on social assistance programmes in two main ways. First, as we have seen, rising unemployment drives more people to claim social assistance as their entitlement to unemployment insurance benefits (where they exist) is exhausted. Secondly. concern has g

rown that assistance programmes create disincentives to find work and leave welfare beneficiaries in an

'

unemployment trap'. This in turn exacerbates unemployment and boosts social expenditure.

These concerns have stimulated the search for ways to make the welfare system more compatible with the changing labour market, itself driven by shifts from an industrial to some form of post-industrial employment pattern. Policies can be loosely grouped into two familiar categories - 'carrots' and `sticks'. '

Carrots` include reducing the withdrawal rate of benefits as earnings rise, providing education, training

and work experience programmes for jobless claimants, and extending child care and other benefits to enable claimants with caring responsibilities to combine these with paid work. `Sticks' include enhanced monitoring of able-bodied claimants, stricter tests of job-search activity with sanctions for non-compliance. time-limited benefits and straightforward reductions in relative benefit levels.

It would appear from a reading of debates in the English-speaking world that this set of issues has dominated discussions about the future of social assistance. However, comparative study suggests a more variegated pattern. Let us consider the tw o trends in turn. First. the pressure of rising long-term unemployment on claimant numbers can certainly be observed in several countries. These include: Canada. New Zealand, the UK. Ireland, France. Germany. Netherlands and Belgium during the 1980s, and Sweden and Finland in the 1990s. However, not surprisingly. we do not find such pressures in those countries with better job records, including Australia, the USA. Luxembourg, Norway, Austria and Japan (and Finland and Sweden before 1990). Nor is this the case in Denmark and

The sticks have included more intensive requirements for job-search activity in all countries in this group. In addition, Britain is to introduce the new Jobseeker's Allowance, which further reduces the insurance element of unemployment protection and enhances work seeking requirements. Benefits and entitlements in the USA were reduced in 1981, and training requirements have been extended again in the 1990s. Following the recent mid-term elections, debate and policy proposals have become more punitive. Republican congressional leaders have called for ti me-limited benefits for AFDC claimants. yet without federally-funded work programmes, and for public orphanages for those children whose parents cannot support them ( The Economist, 19 November 1994).

Overall. the pattern of response to common economic pressures is complex. In many respects the differences are to be expected, given national differences in labour markets, social assistance regimes, political complexion and broader social traditions. The prominence of work incentives in policy debates is certainly greater in countries with greater reliance on social assistance. Yet even within this group, differences are noticeable between the Australian selective welfare state and the American public assistance state.