LEGAL UPDATES
| Social Welfare in Europe: An Historical Overview |
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History Immigration Through 1945 1945–1973 1974–1980 1980–1985 1986–1988 1989–1992 1993–1994 1996 1997–2001 2002 2003 2004 2005 2006 2007 Social Security Social Welfare in Europe: An Historical Overview Taxation History of Taxation in France First century BC until 756 AD Church tithes Eleventh century until The French Revolution 1790–1914 Republican Tax from 1799 to 1945 from 1948 to 1976 from 1982 to 1999 from 2000 to 2006 Bibliography History of the OECD Model Tax Convention The history of social welfare in Europe begins in the nineteenth century in Germany, under the impetus of Chancellor Otto von Bismarck (1815–1898). At the time, workers faced extremely difficult and dangerous working conditions resulting from the industrial revolution. Disease, work-related accidents and the need for a replacement income when one could not work encouraged Bismarck to set up a social welfare system to cover this very destitute part of the population. He set up three basic laws: the 1883 law on health insurance, the 1884 law on work-related accidents, and finally the 1889 law on disability-retirement insurance. The system was financed by the payment of dues that were proportional to salaries and shared by the employer and the worker. As such, the system guaranteed compensatory income in case of loss of income linked to work-related accidents, unemployment, illness or disability. The benefits paid out were calculated based on what proportion of the salary was paid in dues, as well as on the number of years insurance dues had been paid. Several European countries modeled their systems on the Bismarckian approach: France as early as 1945, but also Austria, Belgium, Italy, Luxembourg, the Netherlands, Norway, Portugal and Spain. In the 1940s, Great Britain took a different direction, choosing another form of social welfare, which followed the precepts of the British economist and politician Lord William Henry Beveridge (1879–1963). He described his doctrine as follows: “the role of government is to fight squalor, idleness and disease”. As a result, it is the state’s responsibility to cover the expenses of setting up a social security system. Various taxes and duties made it possible to finance this innovative structure. So in 1941–1942, under the influence of his welfare policy, the British National Health Service was born. This free social system guarantees British citizens access to social services without having to pay social dues in exchange, or with only very minimal dues. The expression used to describe this system is “universal welfare system”. A large number of the social welfare systems in northern European countries (Ireland, Denmark, Iceland, Sweden) have universal characteristics. The different systems provide qualitatively different benefits. The universal system provides exclusively fixed-rate benefits. British or Irish managers and workers find themselves granted the same basic fixed-rate pension (State pension), whereas French managers and workers receive pensions proportional to the number of years insurance dues were paid, making them much more generous. However, all European countries are facing inevitable challenges, such as the aging population, which implies major increases in public expenditure on healthcare and pensions. These challenges are forcing countries to undertake major reforms, but also to develop savings plans based on capitalization. Labour market changes, which are increasing social insecurity, constitute the second major challenge. The result is a European social policy that tries to guarantee a minimum of benefits to people facing situations of insecurity, who have lost their jobs or their homes. For this reason, one sees universal welfare approaches developing in countries with Bismarckian traditions: for example, in France, you find the Couverture Maladie Universelle (CMU) universal healthcare coverage and the Revenu Minimum d’Insertion (RMI) minimum integration income. These universal systems set out to respond to the rising level of social insecurity. We are far from finding solutions to these challenges, as society is constantly changing. The search for alternatives continues. Will the challenges be greater or lesser in the decades to come? Will we soon need to write a new history of social welfare? |
| Last Updated on Thursday, 08 October 2009 17:24 |
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