What the European and American welfare states have in common and where they differ: facts and fiction in comparisons of the European Social Model and the United States

Abstract

The classification of the American welfare state as ‘residual’ does not square with the empirical facts. The US system is dominated by public provisions for welfare among which social insurance programme, particularly Social Security and Medicare, clearly predominate, while public pensions are more universal, redistributive and generous than in some European countries. Key differences persist with respect to a stronger reliance on private provisions in pensions and health, a stronger emphasis on work-conditioned benefits and a greater importance of selective schemes. The term ‘work-conditioned’ welfare state captures some of these key features more adequately than the concept of the ‘residual’ welfare state. EU member states have not converged towards the US; private welfare spending increased without catching up, and the relative importance of selective benefits shrunk in most countries. There is some convergence on the level of policy discourse, where the idée directrice of European social policies has changed from social protection to activation, whereas the US is moving closer to Europe with respect to health care and the acceptance of state responsibilities.