Studying social policy in time

1. Studying social policy in time Giuliano Bonoli

2. Social policy in time • At the micro-level: longitudinal analysis • Social processes • Transitions between employment and non employment • Social exclusion • Event history analysis • Child birth • Disability recipiency • But at the macro-level?

3. Three time-related processes • Path dependency • Example: labour market policies • Sequencing • Example: pension reform • Relative timing • Example: Adaptation to new social risks

4. 1. Path dependency • In the early days of a policy, the room for manoeuvre is relatively large. Early decisions are relatively unconstrained • Early decisions, however, put policies on course from which it is difficult to exit • Illustration through “Polya Urn” processes in mathematics • Illustration through the QWERTY keyboard layout in economic history

5. Why path dependency ? Increasing returns (P. Pierson) • Increasing returns : • Policy change requires collective action. • Institutional density or stickiness • Increasing returns in political authority • Complexity of politics and policies

6. Example: Labour market /industrial relations policy in Britain and in Germany in the 1980s (Steward Wood) • PUZZLE: • UK: Liberalisation, deregulation • Germany: status quo prevails in spite of attempts by the Kohl government in the same direction • HYPOTHESES: • Employers preferences are different

7. UK low employment protection allows employers to adjust quickly to demand fluctuations, and keep short term profits high Provides an incentive for workers to acquire transferable skills. Rigidities are detrimental to profitability Germany high employment protection generates a stable labour market which discourages free riding provides incentives for workers to invest in their own skills Collaboration with the unions is important for providing training Employer preferences in the UK and in Germany – shaped by EPL

8. UK: The Thatcher governments reduced the power of the trade unions dramatically

9. Germany: failed attempts to undermine union power because of employers • attempt to restrict access to unemployment benefits for workers indirectly affected by a strike. • Attempt to undermine DGB monopoly in works councils

10. Conclusion: • Decisions taken decades earlier (interwar period for Germany) have shaped current employer preferences

11. 2. Sequencing. Why do policy processes go through sequences? • Social learning (problem solving) • Strategic learning by political actors • Spill over effects (adjustment in the Netherlands). • Staged processes with extension of the range of available options

12. 3. Relative timing of key developments • Key socio-economic developments are not synchronised across countries • Their relative timing may produce interactions that can affect the patterns of opportunity/constraints for policy change

13. Old welfare states and new social risks • Western welfare states were concieved and developed during the postwar years • Socio-economic changes have resulted in the emergence of new social risks • How are welfare states adapting to this?

14. … it depends • Nordic welfare states have been considerably more successful in adapting • Continental European welfare states are lagging behind • Timing of different developments explains divergence

15. Social change and new social risks • Deindustrialsiation and the tertiarisation of employment • Women’s entry into labour markets • Increased instability of family structures • Destandardisation of employment

16. Old Pensions Survivors ben. Short term unemployment ben. Sickness benefit Invalidity ben. and serv. New Long term unempl. ben./ALMP In work benefits Child care serv. Family ben. Parental leave Services for older people Old and new social risk policies

17. It is justified to distinguish between two sorts of social policies, because: • They constitute responses to different social transformations, and have different objectives • The target groups of the two sets of policies are different • Why not?

18. Spending on old and new social risk polices as a % of GDP, averages 1997-2001 Source: OECD SOCX 2004

19. How do we explain divergence? • Politics • Institutional predisposition • The relative timing of postindustrialisation, ageing and welfare state maturation

20. The timing of key postindustrial developments in 18 OECD countries Source: Based on OECD Statistical compendium

21. Relationship between the average benchmark year and spending on new social risk polices, 1997-2001 Source: Based on OECD Statistical compendium

22. Alternative explanations 1: the strength of the left Source: OECD SOCX and Armingeon et al. CPDS

23. Alternative explanation 2: the strength of the Christian democrats Source: OECD SOCX and Armingeon et al. CPDS

24. Alternative explanation 3: Catholicism Source: OECD SOCX and www.adherents.com

25. Competing explanations: correlation matrix Source: see previous slides

26. Alternative explanation 4: catching upIncrease in spending on new social risk polices in the 1990s and spending in 1987-1991

27. Conclusions • Timing matters, but together with politics • If timing matters, we should develop new techniques to introduce time base variables in policy making models • Not good news for those who are hit by NSR in Continental European countries