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Fact or fiction? Welfare cuts and fiscal adjustments

Bibliographic Data

ID6297007
AuthorsGeorg Wenzelburger (0000-0001-6195-7664, University of Freiburg, corresponding author)
Year2014
Volume34
Issue1
Pages63-92
Publication date2014-04-01
Open AccessYes
TypeARTICLE
VenueJournal of Public Policy (JOURNAL)
Journal identifiersISSN: 0143-814X • E-ISSN: 1469-7815
PublisherCambridge University Press (CUP) (PUBLISHER)
DOI10.1017/s0143814x13000251
OpenAlexW2322144299
LanguageEN
Citations received5
References cited30

Governments in the industrialised western democracies have repeatedly been advised to curb the welfare state when adjusting public finances in order to stabilise public debt in the long run and to create economic growth. This recommendation has been founded on a vast body of research on fiscal adjustments, which has come to the conclusion that cutting social expenditures leads to expansionary and more sustainable budget consolidations. This paper adds to the existing literature suggesting a more nuanced view, which challenges the simplicity of the “cutting-welfare” advice: first, we find that whereas less social spending is indeed associated with expansionary and successful adjustments, this is not the case for overall welfare state generosity. Second, disaggregating the welfare state in its components reveals that a reduction of pension generosity is indeed related to successful adjustments whereas reducing unemployment generosity does not seem to play a major role

Debt · Economic policy · Economics · Generosity · Labour economics · Macroeconomics · Market economy · Order (exchange · Pension · Political science · Public economics · State (computer science · Unemployment · Welfare · Welfare reform · Welfare state · Finance · Fiscal Policies and Political Economy · Housing, Finance, and Neoliberalism · Social Policy and Reform Studies

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Citations per year0.5
Citation span2016 - 2021 (6)
Highly citedNo

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