Trade-Offs Between Social Investment and Passive Transfers in the New Welfare State : New Political Coalitions in European Welfare States?

Abstract

In the wake of the global economic and fiscal crisis, welfare states are now entering a new phase of austerity. At the same time, new social risks related to single parenthood or care for the elderly lead to new demands and expectations vis-à-vis the welfare state. This paper engages in an analysis of how these competing demands come into conflict with each other by using a new and original dataset on individual-level attitudes and preferences towards social investments and passive social transfers in eight European countries. I find strong evidence for citizens’ dislike of trade-offs. When confronted with the reality of trade-offs between different parts of the welfare state, citizens are less likely to support additional social investment in education, in particular when they would have to be financed by cutbacks in social transfers such as pensions. I also find evidence for the implication of the “new politics” school that in the era of retrenchment, distributive conflicts within existing welfare states exhibit a different political dynamic compared to the large-scale conflict about the scale and size of the welfare state. In particular, membership in particular welfare state constituency groups is a more significant determinant of individual preferences, whereas for redistributive preferences more broadly defined large-scale cleavage structures indicated by socio-economic position and partisan ideology are more important.