Great Recession, great regression? The welfare state in the twenty-first century

Celia Lessa Kerstenetzky and Graciele Pereira Guedes

Cambridge Journal of Economics, 2021, vol. 45, issue 1, 151-194

Abstract: Has the welfare state undergone significant retrenchment in the aftermath of the 2007–08 crackdown? In the literature, two contrasting views can be found. Some commentators argue that expansions that would otherwise be observed during crises have been suffocated due to the imperative of austerity. Other more optimistic assessments see social investment policies as having been experimented with in various places, alongside widespread retrenchment. In this paper, using an Organisation for Economic Co-operation and Development (OECD) database for 35 countries, we check these assessments by examining aggregate figures, such as the evolution—over the 2007–13 period—of social spending and its composition, the participation of social spending in public expenditure, the tax burden and tax composition and welfare state effectiveness. We document expansion in the OECD area alongside stable performance. However, important challenges persist.

Keywords: Welfare state; Social expenditure; Taxation; Inequality; Poverty (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:oup:cambje:v:45:y:2021:i:1:p:151-194.

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