The governance of poverty: Welfare reform,activation policies,and social assistance benefits and caseloads in Nordic countries

Abstract

Social assistance benefits are the last resort in national social protection systems, and decentralizing reforms leading to increasing local discretion over implementation of national legislation was an international trend frequently referred to as devolution. More recent reforms have instead often implied recentralization and/or involved mandatory institutional cooperation between welfare agencies located at different hierarchical levels. In contrast to North America, there is little European evidence on the extent to which shifting responsibilities influence benefit levels and benefit receipt. Using individual level register data from Denmark, Finland, Norway and Sweden and applying a difference-in-difference approach, we link changes in legislation to changes in municipal benefits as well as caseloads during the period 1990–2010. We only find indications of reform effects linked to distinct benefit centralization, concluding that other reforms were too insubstantial to have an impact. Combined with earlier evidence, this suggests that in order to have an impact, welfare reform requires marked changes in authority.