Social welfare spending lags

Lyle Scruggs, associate professor, political science

Social scientists in the College of Liberal Arts and Sciences have examined how U.S. benefits for unemployment, sick pay, and pensions compare with other developed countries, and the results are not good.

The U.S. ranks at the bottom of a “generosity index” of 18 developed countries, including Japan, Canada, western European countries, Australia, and New Zealand.

Although the U.S. is a rich country, the “have nots” are less organized here, says Lyle Scruggs, associate professor of political science, whose recent research focuses on welfare policy reform in North America and Western Europe.

Labor unions are relatively weaker here, for example. In countries where the working class is more organized, higher benefits are demanded and extracted, he notes.

A generosity index that tracked three mainstream social insurance programs – unemployment insurance, public pensions and sick pay, showed the U.S. to be the least generous, followed by Australia and Japan. Norway, Sweden, Denmark and the Netherlands were the most generous.

While most indexes of welfare state benefits just look at how much countries spend, this one also looks at how spending is distributed, and whether it reaches lower or higher income groups.

The U.S. and the United Kingdom demonstrated the “worst of both worlds” by that type of measurement, Scruggs says. In the U.S., social spending is not only relatively low, but most of it goes to social security pensions, which are available to people of high and low income levels.

In Germany, where the average income in less than in Mississippi, a lower middle class person is better off than in the U.S. because German welfare state benefits target more people of lower income, the study found.

The most generous welfare states not only spend more but tend to do it in a way that is redistributive, Scruggs says.

The research was done by Scruggs, Christian Zimmerman, associate professor of economics who did sophisticated computational modeling for the project, and a former PhD student here, James P. Allan, who is now an assistant professor of political science at Wittenberg University.

Allan began the project as a graduate student. It is now being updated by another political science PhD student, Daniel Stockemer. The original work was funded by a grant from the National Science Foundation.

The next step will be to look at inequality in the structure of social insurance programs and healthcare outcomes, says Scruggs.

To hear a podcast about the study, click here