welfare state
WELFARE STATE
A welfare state is a concept of government where the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those unable to avail themselves of the minimal provisions for a good life. The general term may cover a variety of forms of economic and social organization.[1]
There are two main interpretations of the idea of a welfare state:
• A model in which the state assumes primary responsibility for the welfare of its citizens. This responsibility in theory ought to be comprehensive, because all aspects of welfare are considered and universally applied to citizens as a "right".
• Welfare state can also mean the creation of a "social safety net" of minimum standards of varying forms of welfare.
There is some confusion between a "welfare state" and a "welfare society," and debate about how each term should be defined. In many countries, especially in the United States, some degree of welfare is not actually provided by the state, but directly to welfare recipients from a combination of independent volunteers, corporations (both non-profit charitable corporations as well as for-profit corporations), and government services. This phenomenon has been termed a "welfare society," and the term "welfare system" has been used to describe the range of welfare state and welfare society mixes that are found.
The welfare state involves a direct transfer of funds from the public sector to welfare recipients, but indirectly, the private sector is often contributing those funds via redistributionist taxation; the welfare state has been referred to as a type of "mixed economy".
HISTORY
The existence of military pensions can be traced back at least to the Roman Empire. The Mauryan Empire was the first welfare state that became of the form when Emperor Ashoka introduced reforms after the Kalinga war.
The modern welfare state developed during the late 19th and 20th century in response to Karl Marx's theory of the inherent instability of capitalism in an attempt to protect the capitalist system from a socialist revolution. The first practical implementation of the welfare state was instituted by German Chancellor Otto von Bismarck as a direct attempt to stave off socialism. These welfare programs differed from previous schemes of poverty relief due to their relatively universal coverage. The development of social insurance in Germany under Bismarck was particularly influential. Some schemes, like those in Scandinavia, were based largely in the development of autonomous, mutualist provision of benefits. Others were founded on state provision. The term was not, however, applied to all states offering social protection. The sociologist T.H. Marshall identified the welfare state as a distinctive combination of democracy, welfare and capitalism.
Examples of early welfare states in the modern world are Germany, all of the Nordic Countries, the Netherlands, Uruguay and New Zealand and the United Kingdom in the 1930s.
Changed attitudes in reaction to the Great Depression were instrumental in the move to the welfare state in many countries, a harbinger of new times where "cradle-to-grave" services became a reality after the poverty of the Depression. During the Great Depression, it was seen as an alternative "middle way" between communism and capitalism. In the period following the Second World War, many countries in Europe moved from partial or selective provision of social services to relatively comprehensive coverage of the population.
The activities of present-day welfare states extend to the provision of both cash welfare benefits (such as old-age pensions or unemployment benefits) and in-kind welfare services (such as health or childcare services). Through these provisions, welfare states can affect the distribution of wellbeing and personal autonomy among their citizens, as well as influencing how their citizens consume and how they spend their time.
After the discovery and inflow of the oil revenue, Saudi Arabia, Brunei, Kuwait, Qatar, Bahrain, Oman, and the United Arab Emirates all became welfare states for their respective citizens if not for guest labourers.
In the United Kingdom, the beginning of the modern welfare state was in 1911 when David Lloyd George suggested everyone in work should pay national insurance contribution for unemployment and health benefits from work.
In 1942, the Social Insurance and Allied Services was created by Sir William Beveridge in order to aid those who were in need of help, or in poverty. Beveridge worked as a volunteer for the poor, and set up national insurance. He stated that 'All people of working age should pay a weekly national insurance contribution. In return, benefits would be paid to people who were sick, unemployed, retired or widowed.' The basic assumptions of the report were the National Health Service, which provided free health care to the UK. The Universal Child Benefit was a scheme to give benefits to parents, encouraging people to have children by enabling them to feed and support a family. One theme of the report was the relative cheapness of universal benefits. Beverage quoted miner's pension schemes as some of the most efficient available, and argued that a state scheme would be cheaper to run than individual friendly societies and private insurance schemes, as well as being cheaper than means-tested government-run schemes for the poor. The cheapness of what was to be called National Insurance was an argument alongside fairness, and justified a scheme in which the rich paid-in and the state paid-out to the rich, just as for the poor. In the original scheme, only some benefits called National Assistance were to be paid regardless of contribution. Universal benefits paid to rich and poor such as child benefit were particularly beneficial after the second world war when the population of the United Kingdom declined. Universal Child Benefit may have helped drive the Baby boom. The impact of the report was huge and 600,000 copies were made.
Beveridge recommended to the government that they should find ways of tackling the five giants, being Want, Disease, Ignorance, Squalor and Idleness. He argued to cure these problems, the government should provide adequate income to people, adequate health care, adequate education, adequate housing and adequate employment.
Before 1939, most health care had to be paid for through non government organisations, this was done through a vast network of friendly societies, trade unions and other insurance companies which counted the vast majority of the UK working population as members. These friendly societies provided insurance for sickness, unemployment and invalidity, therefore providing people with an income when they were unable to work. But because of the 1942 Beveridge Report, in 5 July 1948, the National Insurance Act, National Assistance Act and National Health Service Act came into force, thus this is the day that the modern UK welfare state was founded. Institutions run by local councils to provide health services for the uninsured poor - part of the poor law tradition of workhouses - were merged into the new national system.
Welfare systems were developing intensively since the end of the World War II. At the end of century due to their restructuring part of their responsibilities started to be channeled through non-governmental organizations which became important providers of social services.
WELFARE EXPENDITURE 2001
Nation Welfare expenditure
(% of GDP)
omitting education Welfare expenditure
(% of GDP)
including education GDP per capita (US$)
Denmark
29.2 37.9 $29,000
Sweden
28.9 38.2 $24,180
France
28.5 34.9 $23,990
Germany
27.4 33.2 $25,350
Belgium
27.2 32.7 $25,520
Switzerland
26.4 31.6 $28,100
Austria
26.0 32.4 $26,730
Finland
24.8 32.3 $24,430
Netherlands
24.3 27.3 $27,190
Italy
24.4 28.6 $24,670
Greece
24.3 28.4 $17,440
Norway
23.9 33.2 $29,620
Poland
23.0 N/A $9,450
United Kingdom
21.8 25.9 $24,160
Portugal
21.1 25.5 $18,150
Luxembourg
20.8 N/A $53,780
Czech Republic
20.1 N/A $14,720
Hungary
20.1 N/A $12,340
Iceland
19.8 23.2 $29,990
Spain
19.6 25.3 $20,150
New Zealand
18.5 25.8 $19,160
Australia
18.0 22.5 $25,370
Slovak Republic
17.9 N/A $11,960
Canada
17.8 23.1 $27,130
Japan
16.9 18.6 $25,130
United States
14.8 19.4 $46,000
Ireland
13.8 18.5 $32,410
Mexico
11.8 N/A $8,430
South Korea
6.1 11.0 $15,090
EU: SOCIAL WELFARE SERVICES
Legislation, policies and programmes of the Social Welfare Services (SWS) are in line with those of the European Union. The SWS are in an ongoing process of monitoring and harmonization with the decisions made at a European level.
The European Union applies the open method of coordination in the areas of social inclusion and social protection which fall within the competence of the SWS.
Projects co-funded by 50% by the European Social Fund and 50% by national fund, Single Programming Document, Objective 3 “Human Resource”, 2004-2006
Social Welfare Services (SWS) are responsible for the implementation of two Projects that are co-funded by 50% by the European Social Fund and by 50% by national funds. The main priority of SWS is the integration of the inactive labour force and the combating of economic and social exclusion.
The Project “Expansion and Improvement of Care Services for the children, the Elderly, the Disabled and Other Dependants’ (Measure 1.4.1) includes the launching of a study about open care services in Cyprus. The results of the study will be used for the funding of 31 open care programmes. The programmes are implemented in cooperation between Local Authorities and Non-governmental organisations. Also, SWS launched a study on the role of Local Authorities in the promotion of care policies for the reconciliation of family and working life. The Project’s actions contribute to the facilitation of women in entering, re-entering or staying in the labour market. It contributes in the reconciliation of family and working life, in the promotion of equal opportunities between the two sexes and in the safeguarding of social cohesion.
The Project “Vocational Training and Promotion of Public Assistance Recipients in the Labour Market” (Measure 1.3.1) contributes to the activation of public assistance recipients, thus assisting their social and employment integration.
Specifically, the Project’s actions aim at the upgrading of their existing professional skills or their acquiring new skills in specialisation according to the labour market needs. The Project’s actions, also, contribute in the combating of digital illiteracy and in enhancing communication skills. It also, contributes in the provision of counselling and in the strengthening of their self-esteem, self-confidence and their employability, so that public assistance recipients become more competitive in the modern Cyprus labour market, thus ensuring equal opportunities to employment.
Social Inclusion
The European Strategy for Social Inclusion is based on the open method of co-ordination combining common objectives, national action plans and common indicators in order to promote the eradication of poverty and social exclusion by 2010.
Member States submitted their second National Action Plans for Social Inclusion, 2003-2005, according to common objectives agreed at the Nice Summit in December 2000 (revised in December 2002).
The Republic of Cyprus, like all new Member States, will submit their first National Action Plans for Social Inclusion, 2004-2006, in July 2006. The Republic of Cyprus has already participated in the social inclusion process through the preparation and of the Joint Inclusion Memorandum which was signed by the European Commission and the Minister of Labour and Social Insurance, in 18.12.2003. The Joint Inclusion Memorandum is a political document identifying the political priorities of Cyprus in the area of social inclusion.
The European Commission published in June 2004 the Working Paper on Social Inclusion in the New Member States, which is a synthesis of the Joint Inclusion Memoranda on Social Inclusion (JIM). This report examines the main challenges which the 10 new Member States face in order to combat poverty /and social exclusion and to promote greater social exclusion.
The SWS have been designated as the co-ordinator of the National Action Plan for Social Inclusion 2004-2006. All actors concerned from the governmental, non-governmental and semi-governmental sectors, academic institutions etc are involved in the process. The NAP/Incl covers a wide range of areas such as health, education, housing, social protection, justice, sports, culture etc.
Cyprus participates in the Community Action Programme for the Encouragement of Co-operation between Member States for the Combat of Social Exclusion. The aim of the Programme is to improve the understanding of social exclusion and poverty, to organise exchanges on policies and promote mutual learning (in the context of national action plans and comparable indicators) and to develop the capacity of actors to address social exclusion and poverty effectively both at national and regional level.
The Peer Review Programme is a key element of the Open Method of Coordination and a key component of the Community Action Programme on Social Inclusion. Peer Reviews are mutual learning processes based on the systematic evaluation of good practice and assessment of selected policies or institutional arrangements coming under the various National Action Plans/Inclusion. Eight Peer Reviews will be held in different Member States in 2004, involving national and regional authorities, representatives of the European Commission, independent social inclusion experts and stakeholder representatives with a special interest in the experience and transfer of the policy. They are intended to ascertain whether and how each reviewed policy, regarded as effective in a national context, can be effectively transferred to other Member States.
Social Protection
The European Union has launched the open method of coordination for a range of policies to promote the exchange between the European Commission and the Member States of the EU about modernising and improving social protection systems.
The European Union encourages the incorporation of active employment measures in social protection systems so that beneficiaries are motivated to (re)enter the labour market.
The public assistance and services for the elderly fall under the social protection policies guaranteeing a minimum standard of living for all persons legally residing in Cyprus.
As of 2004, the SWS participate in the Social Protection Committee which was established in 2000 with the aim of cooperation between the European Commission and the Member States in modernizing and improving social protection systems.
Other
European Employment Strategy
The European Employment Strategy promotes, among others, policies reconciling work and family life to support women΄ s participation in the labour market. Within that framework, the SWS encourage non-governmental organisations to develop social welfare services where necessary. Through technical and financial assistance, the SWS subsidise day care centres for preschool- and school-age children, older persons and persons with disabilities, home care, adult residential care etc.
At the same time, the SWS are responsible by legislation to set up standards and inspect their implementation as regards childcare, adult day care and residential care.
The SWS participate in a Task Force (initiated by the Department of Labour) for the preparation of the Joint Assessment Paper which was signed by the Minister of Labour and Social Insurance and the European Commissioner for Employment and Social Affairs, in 2001.
Who Spends More on Social Welfare: the United States or Sweden?
By STEVEN D. LEVITT
One of our favorite economic historians, Price Fishback, returns to the Freakonomics blog. In the past, Price’s blog posts have focused on what we can learn about today’s economic situation from the experiences of the Great Depression and the New Deal. My personal favorite, which I quote on a weekly basis, is this post pointing out how categorically different the Great Depression was from our recent “Great Recession.”
In today’s post, Price tackles the question of who spends more on social welfare, the U.S. or the Nordic countries? What he discovers will likely surprise you.
Price Fishback is a Professor of Economics at the University of Arizona.
Who Spends More on Social Welfare: the United States or Sweden?
By Price Fishback
Ask anyone. Who spends more on social welfare: the U.S. or Sweden and other Nordic countries? Nearly everybody will say Sweden. But the answer, at least as of the mid-2000s, might surprise you. It depends heavily on how you deal with taxation, unfunded mandates, and whether you discuss spending as a share of the country’s output or in absolute dollars. Social welfare expenditures are defined as spending for the poor, the unemployed, the disabled, the elderly, and on health care. The material reported comes from a historical study comparing the U.S. and the Nordic countries between 1920 and 2003.
People’s perceptions are driven by the standard statistic reported in the news and in the OECD database: gross public social welfare spending as a percentage of GDP. In 2003, Sweden spent 37 percent relative to GDP, Denmark 32 percent, Norway 28 percent, Finland 26 percent, and the U.S. lagged behind at 17 percent.
Yet gross transfers do not take into account the dramatic differences in tax structure in the U.S. and the Nordic countries. The Nordic countries collect income taxes on the cash payments made to social welfare recipients at rates that are four to five times the rates paid by American recipients. Then when the Nordic recipients go out to make purchases, they pay consumption tax rates on their purchases that are 4 to 5 times the rate paid by the poor in America. Furthermore, the U.S. government offers a series of tax breaks to promote social welfare that are not found in the Nordic countries. After adjusting for the differences in taxation to get net public social spending relative to GDP, Sweden’s figure falls by 8 percentage points to 29 percent, Denmark falls to 24 percent, Norway to 23 percent and Finland to 20 percent. The U.S. figure rises to 19 percent.
The difference between the U.S. and the Nordic countries is closed further when expenditures per total population are considered. Such international comparisons are more difficult to measure than shares of GDP due to the issues related to measuring purchasing power across countries. If the adjustments for purchasing power are correct, net public social expenditures by government in America in 2003 ranked roughly in the middle of the Nordic countries. Per capita net public social welfare spending in 2003 (in 1990 dollars) in the U.S. was $5,400, while Sweden’s was $6,300, Norway’s $5,900, Denmark’s $5,472, and Finland’s $4,200. Note that all of these countries are very rich — they were spending more on net public social welfare per person in society than the per capita incomes of countries with most of the population in the world.
The U.S. differs from the Nordic countries in that it is a safety-net society. Workers and people with adequate incomes purchase directly, or receive through their employer, private life insurance, health insurance, and pension plans. Many make charitable donations for social welfare purposes. Public benefits are available for the elderly, for the disabled, and for families whose incomes fall below various poverty lines. Meanwhile, the Nordic countries adopt a more universal, government-sponsored approach. If we take into account these differences in style, the appropriate measure is net public and private social welfare expenditures per capita. By this metric, the U.S. then leads the way at $7,800, followed by Sweden at $6,700, Norway at $6,300, Denmark at $5,800, and Finland at $4,900.
Some caveats are worth considering. The U.S. costs of health treatment and administration are likely higher. If we cut all U.S. health care costs by one-third, the U.S. figure falls to $6,700, equal with Sweden. The latest figures I used for comparison in the century-long study I did were from 2003, and there have been adjustments since. Norway’s GDP per person has jumped markedly, and the U.S. recently adopted a health reform designed to cover more people.
The differences in the systems have implications for different parts of the income distribution. In all of the countries, taxes and transfer payments lead to a substantial increase in the equality of income after taxes and transfers are incorporated. Comparisons of incomes after taxes and transfers show that Americans at the 10th percentile of the American income distribution (9 percent have less, 90 percent have more) fare about the same as Nordic people at the 10th percentile of their distribution. Americans have more opportunity to reach higher incomes because Americans in the upper half of the distribution have much higher incomes than Nordic people in the upper half of their income distributions. On the other hand, households below the 10th percentile in America fare much worse on average than the lowest group in the Nordic countries. Despite a large array of poverty programs, people in the U.S. are falling through holes in the safety net. We know that a substantial number of people eligible for a wide range of benefits in the U.S. don’t receive them, either because they don’t apply or the U.S. delivery of services is not that good.
Is the U.S. safety net a better system than the universal Nordic programs? Many Nordic people seem to prefer theirs, and many Americans seem to prefer ours. Despite the difference in approaches, the striking feature here is that the amounts spent per person in the population are not that different. The U.S., like most developed and developing countries, has greatly expanded its demand for security, and thus expenditures on social welfare have risen dramatically throughout the past century.
Source: http://freakonomics.blogs.nytimes.com/2010/05/25/who-spends-more-on-social-welfare-the-united-states-or-sweden/
A welfare state is a concept of government where the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those unable to avail themselves of the minimal provisions for a good life. The general term may cover a variety of forms of economic and social organization.[1]
There are two main interpretations of the idea of a welfare state:
• A model in which the state assumes primary responsibility for the welfare of its citizens. This responsibility in theory ought to be comprehensive, because all aspects of welfare are considered and universally applied to citizens as a "right".
• Welfare state can also mean the creation of a "social safety net" of minimum standards of varying forms of welfare.
There is some confusion between a "welfare state" and a "welfare society," and debate about how each term should be defined. In many countries, especially in the United States, some degree of welfare is not actually provided by the state, but directly to welfare recipients from a combination of independent volunteers, corporations (both non-profit charitable corporations as well as for-profit corporations), and government services. This phenomenon has been termed a "welfare society," and the term "welfare system" has been used to describe the range of welfare state and welfare society mixes that are found.
The welfare state involves a direct transfer of funds from the public sector to welfare recipients, but indirectly, the private sector is often contributing those funds via redistributionist taxation; the welfare state has been referred to as a type of "mixed economy".
HISTORY
The existence of military pensions can be traced back at least to the Roman Empire. The Mauryan Empire was the first welfare state that became of the form when Emperor Ashoka introduced reforms after the Kalinga war.
The modern welfare state developed during the late 19th and 20th century in response to Karl Marx's theory of the inherent instability of capitalism in an attempt to protect the capitalist system from a socialist revolution. The first practical implementation of the welfare state was instituted by German Chancellor Otto von Bismarck as a direct attempt to stave off socialism. These welfare programs differed from previous schemes of poverty relief due to their relatively universal coverage. The development of social insurance in Germany under Bismarck was particularly influential. Some schemes, like those in Scandinavia, were based largely in the development of autonomous, mutualist provision of benefits. Others were founded on state provision. The term was not, however, applied to all states offering social protection. The sociologist T.H. Marshall identified the welfare state as a distinctive combination of democracy, welfare and capitalism.
Examples of early welfare states in the modern world are Germany, all of the Nordic Countries, the Netherlands, Uruguay and New Zealand and the United Kingdom in the 1930s.
Changed attitudes in reaction to the Great Depression were instrumental in the move to the welfare state in many countries, a harbinger of new times where "cradle-to-grave" services became a reality after the poverty of the Depression. During the Great Depression, it was seen as an alternative "middle way" between communism and capitalism. In the period following the Second World War, many countries in Europe moved from partial or selective provision of social services to relatively comprehensive coverage of the population.
The activities of present-day welfare states extend to the provision of both cash welfare benefits (such as old-age pensions or unemployment benefits) and in-kind welfare services (such as health or childcare services). Through these provisions, welfare states can affect the distribution of wellbeing and personal autonomy among their citizens, as well as influencing how their citizens consume and how they spend their time.
After the discovery and inflow of the oil revenue, Saudi Arabia, Brunei, Kuwait, Qatar, Bahrain, Oman, and the United Arab Emirates all became welfare states for their respective citizens if not for guest labourers.
In the United Kingdom, the beginning of the modern welfare state was in 1911 when David Lloyd George suggested everyone in work should pay national insurance contribution for unemployment and health benefits from work.
In 1942, the Social Insurance and Allied Services was created by Sir William Beveridge in order to aid those who were in need of help, or in poverty. Beveridge worked as a volunteer for the poor, and set up national insurance. He stated that 'All people of working age should pay a weekly national insurance contribution. In return, benefits would be paid to people who were sick, unemployed, retired or widowed.' The basic assumptions of the report were the National Health Service, which provided free health care to the UK. The Universal Child Benefit was a scheme to give benefits to parents, encouraging people to have children by enabling them to feed and support a family. One theme of the report was the relative cheapness of universal benefits. Beverage quoted miner's pension schemes as some of the most efficient available, and argued that a state scheme would be cheaper to run than individual friendly societies and private insurance schemes, as well as being cheaper than means-tested government-run schemes for the poor. The cheapness of what was to be called National Insurance was an argument alongside fairness, and justified a scheme in which the rich paid-in and the state paid-out to the rich, just as for the poor. In the original scheme, only some benefits called National Assistance were to be paid regardless of contribution. Universal benefits paid to rich and poor such as child benefit were particularly beneficial after the second world war when the population of the United Kingdom declined. Universal Child Benefit may have helped drive the Baby boom. The impact of the report was huge and 600,000 copies were made.
Beveridge recommended to the government that they should find ways of tackling the five giants, being Want, Disease, Ignorance, Squalor and Idleness. He argued to cure these problems, the government should provide adequate income to people, adequate health care, adequate education, adequate housing and adequate employment.
Before 1939, most health care had to be paid for through non government organisations, this was done through a vast network of friendly societies, trade unions and other insurance companies which counted the vast majority of the UK working population as members. These friendly societies provided insurance for sickness, unemployment and invalidity, therefore providing people with an income when they were unable to work. But because of the 1942 Beveridge Report, in 5 July 1948, the National Insurance Act, National Assistance Act and National Health Service Act came into force, thus this is the day that the modern UK welfare state was founded. Institutions run by local councils to provide health services for the uninsured poor - part of the poor law tradition of workhouses - were merged into the new national system.
Welfare systems were developing intensively since the end of the World War II. At the end of century due to their restructuring part of their responsibilities started to be channeled through non-governmental organizations which became important providers of social services.
WELFARE EXPENDITURE 2001
Nation Welfare expenditure
(% of GDP)
omitting education Welfare expenditure
(% of GDP)
including education GDP per capita (US$)
Denmark
29.2 37.9 $29,000
Sweden
28.9 38.2 $24,180
France
28.5 34.9 $23,990
Germany
27.4 33.2 $25,350
Belgium
27.2 32.7 $25,520
Switzerland
26.4 31.6 $28,100
Austria
26.0 32.4 $26,730
Finland
24.8 32.3 $24,430
Netherlands
24.3 27.3 $27,190
Italy
24.4 28.6 $24,670
Greece
24.3 28.4 $17,440
Norway
23.9 33.2 $29,620
Poland
23.0 N/A $9,450
United Kingdom
21.8 25.9 $24,160
Portugal
21.1 25.5 $18,150
Luxembourg
20.8 N/A $53,780
Czech Republic
20.1 N/A $14,720
Hungary
20.1 N/A $12,340
Iceland
19.8 23.2 $29,990
Spain
19.6 25.3 $20,150
New Zealand
18.5 25.8 $19,160
Australia
18.0 22.5 $25,370
Slovak Republic
17.9 N/A $11,960
Canada
17.8 23.1 $27,130
Japan
16.9 18.6 $25,130
United States
14.8 19.4 $46,000
Ireland
13.8 18.5 $32,410
Mexico
11.8 N/A $8,430
South Korea
6.1 11.0 $15,090
EU: SOCIAL WELFARE SERVICES
Legislation, policies and programmes of the Social Welfare Services (SWS) are in line with those of the European Union. The SWS are in an ongoing process of monitoring and harmonization with the decisions made at a European level.
The European Union applies the open method of coordination in the areas of social inclusion and social protection which fall within the competence of the SWS.
Projects co-funded by 50% by the European Social Fund and 50% by national fund, Single Programming Document, Objective 3 “Human Resource”, 2004-2006
Social Welfare Services (SWS) are responsible for the implementation of two Projects that are co-funded by 50% by the European Social Fund and by 50% by national funds. The main priority of SWS is the integration of the inactive labour force and the combating of economic and social exclusion.
The Project “Expansion and Improvement of Care Services for the children, the Elderly, the Disabled and Other Dependants’ (Measure 1.4.1) includes the launching of a study about open care services in Cyprus. The results of the study will be used for the funding of 31 open care programmes. The programmes are implemented in cooperation between Local Authorities and Non-governmental organisations. Also, SWS launched a study on the role of Local Authorities in the promotion of care policies for the reconciliation of family and working life. The Project’s actions contribute to the facilitation of women in entering, re-entering or staying in the labour market. It contributes in the reconciliation of family and working life, in the promotion of equal opportunities between the two sexes and in the safeguarding of social cohesion.
The Project “Vocational Training and Promotion of Public Assistance Recipients in the Labour Market” (Measure 1.3.1) contributes to the activation of public assistance recipients, thus assisting their social and employment integration.
Specifically, the Project’s actions aim at the upgrading of their existing professional skills or their acquiring new skills in specialisation according to the labour market needs. The Project’s actions, also, contribute in the combating of digital illiteracy and in enhancing communication skills. It also, contributes in the provision of counselling and in the strengthening of their self-esteem, self-confidence and their employability, so that public assistance recipients become more competitive in the modern Cyprus labour market, thus ensuring equal opportunities to employment.
Social Inclusion
The European Strategy for Social Inclusion is based on the open method of co-ordination combining common objectives, national action plans and common indicators in order to promote the eradication of poverty and social exclusion by 2010.
Member States submitted their second National Action Plans for Social Inclusion, 2003-2005, according to common objectives agreed at the Nice Summit in December 2000 (revised in December 2002).
The Republic of Cyprus, like all new Member States, will submit their first National Action Plans for Social Inclusion, 2004-2006, in July 2006. The Republic of Cyprus has already participated in the social inclusion process through the preparation and of the Joint Inclusion Memorandum which was signed by the European Commission and the Minister of Labour and Social Insurance, in 18.12.2003. The Joint Inclusion Memorandum is a political document identifying the political priorities of Cyprus in the area of social inclusion.
The European Commission published in June 2004 the Working Paper on Social Inclusion in the New Member States, which is a synthesis of the Joint Inclusion Memoranda on Social Inclusion (JIM). This report examines the main challenges which the 10 new Member States face in order to combat poverty /and social exclusion and to promote greater social exclusion.
The SWS have been designated as the co-ordinator of the National Action Plan for Social Inclusion 2004-2006. All actors concerned from the governmental, non-governmental and semi-governmental sectors, academic institutions etc are involved in the process. The NAP/Incl covers a wide range of areas such as health, education, housing, social protection, justice, sports, culture etc.
Cyprus participates in the Community Action Programme for the Encouragement of Co-operation between Member States for the Combat of Social Exclusion. The aim of the Programme is to improve the understanding of social exclusion and poverty, to organise exchanges on policies and promote mutual learning (in the context of national action plans and comparable indicators) and to develop the capacity of actors to address social exclusion and poverty effectively both at national and regional level.
The Peer Review Programme is a key element of the Open Method of Coordination and a key component of the Community Action Programme on Social Inclusion. Peer Reviews are mutual learning processes based on the systematic evaluation of good practice and assessment of selected policies or institutional arrangements coming under the various National Action Plans/Inclusion. Eight Peer Reviews will be held in different Member States in 2004, involving national and regional authorities, representatives of the European Commission, independent social inclusion experts and stakeholder representatives with a special interest in the experience and transfer of the policy. They are intended to ascertain whether and how each reviewed policy, regarded as effective in a national context, can be effectively transferred to other Member States.
Social Protection
The European Union has launched the open method of coordination for a range of policies to promote the exchange between the European Commission and the Member States of the EU about modernising and improving social protection systems.
The European Union encourages the incorporation of active employment measures in social protection systems so that beneficiaries are motivated to (re)enter the labour market.
The public assistance and services for the elderly fall under the social protection policies guaranteeing a minimum standard of living for all persons legally residing in Cyprus.
As of 2004, the SWS participate in the Social Protection Committee which was established in 2000 with the aim of cooperation between the European Commission and the Member States in modernizing and improving social protection systems.
Other
European Employment Strategy
The European Employment Strategy promotes, among others, policies reconciling work and family life to support women΄ s participation in the labour market. Within that framework, the SWS encourage non-governmental organisations to develop social welfare services where necessary. Through technical and financial assistance, the SWS subsidise day care centres for preschool- and school-age children, older persons and persons with disabilities, home care, adult residential care etc.
At the same time, the SWS are responsible by legislation to set up standards and inspect their implementation as regards childcare, adult day care and residential care.
The SWS participate in a Task Force (initiated by the Department of Labour) for the preparation of the Joint Assessment Paper which was signed by the Minister of Labour and Social Insurance and the European Commissioner for Employment and Social Affairs, in 2001.
Who Spends More on Social Welfare: the United States or Sweden?
By STEVEN D. LEVITT
One of our favorite economic historians, Price Fishback, returns to the Freakonomics blog. In the past, Price’s blog posts have focused on what we can learn about today’s economic situation from the experiences of the Great Depression and the New Deal. My personal favorite, which I quote on a weekly basis, is this post pointing out how categorically different the Great Depression was from our recent “Great Recession.”
In today’s post, Price tackles the question of who spends more on social welfare, the U.S. or the Nordic countries? What he discovers will likely surprise you.
Price Fishback is a Professor of Economics at the University of Arizona.
Who Spends More on Social Welfare: the United States or Sweden?
By Price Fishback
Ask anyone. Who spends more on social welfare: the U.S. or Sweden and other Nordic countries? Nearly everybody will say Sweden. But the answer, at least as of the mid-2000s, might surprise you. It depends heavily on how you deal with taxation, unfunded mandates, and whether you discuss spending as a share of the country’s output or in absolute dollars. Social welfare expenditures are defined as spending for the poor, the unemployed, the disabled, the elderly, and on health care. The material reported comes from a historical study comparing the U.S. and the Nordic countries between 1920 and 2003.
People’s perceptions are driven by the standard statistic reported in the news and in the OECD database: gross public social welfare spending as a percentage of GDP. In 2003, Sweden spent 37 percent relative to GDP, Denmark 32 percent, Norway 28 percent, Finland 26 percent, and the U.S. lagged behind at 17 percent.
Yet gross transfers do not take into account the dramatic differences in tax structure in the U.S. and the Nordic countries. The Nordic countries collect income taxes on the cash payments made to social welfare recipients at rates that are four to five times the rates paid by American recipients. Then when the Nordic recipients go out to make purchases, they pay consumption tax rates on their purchases that are 4 to 5 times the rate paid by the poor in America. Furthermore, the U.S. government offers a series of tax breaks to promote social welfare that are not found in the Nordic countries. After adjusting for the differences in taxation to get net public social spending relative to GDP, Sweden’s figure falls by 8 percentage points to 29 percent, Denmark falls to 24 percent, Norway to 23 percent and Finland to 20 percent. The U.S. figure rises to 19 percent.
The difference between the U.S. and the Nordic countries is closed further when expenditures per total population are considered. Such international comparisons are more difficult to measure than shares of GDP due to the issues related to measuring purchasing power across countries. If the adjustments for purchasing power are correct, net public social expenditures by government in America in 2003 ranked roughly in the middle of the Nordic countries. Per capita net public social welfare spending in 2003 (in 1990 dollars) in the U.S. was $5,400, while Sweden’s was $6,300, Norway’s $5,900, Denmark’s $5,472, and Finland’s $4,200. Note that all of these countries are very rich — they were spending more on net public social welfare per person in society than the per capita incomes of countries with most of the population in the world.
The U.S. differs from the Nordic countries in that it is a safety-net society. Workers and people with adequate incomes purchase directly, or receive through their employer, private life insurance, health insurance, and pension plans. Many make charitable donations for social welfare purposes. Public benefits are available for the elderly, for the disabled, and for families whose incomes fall below various poverty lines. Meanwhile, the Nordic countries adopt a more universal, government-sponsored approach. If we take into account these differences in style, the appropriate measure is net public and private social welfare expenditures per capita. By this metric, the U.S. then leads the way at $7,800, followed by Sweden at $6,700, Norway at $6,300, Denmark at $5,800, and Finland at $4,900.
Some caveats are worth considering. The U.S. costs of health treatment and administration are likely higher. If we cut all U.S. health care costs by one-third, the U.S. figure falls to $6,700, equal with Sweden. The latest figures I used for comparison in the century-long study I did were from 2003, and there have been adjustments since. Norway’s GDP per person has jumped markedly, and the U.S. recently adopted a health reform designed to cover more people.
The differences in the systems have implications for different parts of the income distribution. In all of the countries, taxes and transfer payments lead to a substantial increase in the equality of income after taxes and transfers are incorporated. Comparisons of incomes after taxes and transfers show that Americans at the 10th percentile of the American income distribution (9 percent have less, 90 percent have more) fare about the same as Nordic people at the 10th percentile of their distribution. Americans have more opportunity to reach higher incomes because Americans in the upper half of the distribution have much higher incomes than Nordic people in the upper half of their income distributions. On the other hand, households below the 10th percentile in America fare much worse on average than the lowest group in the Nordic countries. Despite a large array of poverty programs, people in the U.S. are falling through holes in the safety net. We know that a substantial number of people eligible for a wide range of benefits in the U.S. don’t receive them, either because they don’t apply or the U.S. delivery of services is not that good.
Is the U.S. safety net a better system than the universal Nordic programs? Many Nordic people seem to prefer theirs, and many Americans seem to prefer ours. Despite the difference in approaches, the striking feature here is that the amounts spent per person in the population are not that different. The U.S., like most developed and developing countries, has greatly expanded its demand for security, and thus expenditures on social welfare have risen dramatically throughout the past century.
Source: http://freakonomics.blogs.nytimes.com/2010/05/25/who-spends-more-on-social-welfare-the-united-states-or-sweden/
gratzfeld - 13. Apr, 22:12
