I get postings about the Welfare State from around the world, and part of that is a regular diet of drivel from American conservatives. A statement by Pat Buchanan caught my eye:
The more liberal the welfare state, the greater the disincentive to work and the more ruinous the impact upon a nation’s work ethic.
This is easy enough to check empirically. These are the most recent (2012) figures from the OECD; I have only left off those countries which don’t have both sets of figures.
|Government social spending as a % of GDP||Employment|
It’s possible to make it look as if there’s a relationship by picking some countries and ignoring others. Choose Iceland, Australia, New Zealand, Slovenia and Italy and it looks as if employment falls when welfare expenditure increases. Choose Slovak Republic, the Czech republic, the UK, Germany and Austria and it looks as if employment increases when welfare spending increases. The simple truth, however, is that there is no consistent relationship between the two.
One thought on “The welfare state and employment”
Paul, I enjoy your posts, usually what I call a reality check! On this occassion I felt the need to reply as the data you provide related to government social spending as a % of GDP could also include payments for people who are unable to work due to disability or illness, to me this could further distort things.