Liberalization and income inequality in worlds of welfare: A comparative analysis (1974-2013)

Abstract:

Christian democracy and the Continental welfare state has been a major topic of Kees van Kersbergen’s work (van Kersbergen, 1995). Convincingly, he argued that in Continental welfare states, Christian democratic parties – together with left parties – developed the welfare state with certain features that distinguish it from the liberal and social democratic systems. He argued that in all regimes, the welfare state plays ‘an indispensable role in moderating market-induced inequalities and poverty, with the social democratic regime outperforming the conservative regime (to some degree) and the liberal regime (to a considerable extent)’ (van Kersbergen and Vis, 2014: 101). In this paper, we start from his perspective on the regime-specific effects of welfare states on income inequality. We focus on liberalization policies – the removal of market barriers or the loosening of restrictions on free markets – that started wave-like in the 1980s, peaking at the turn of the century and leveling off thereafter. How did this wave of liberalization impact income inequality, and how has this impact been moderated by the various welfare regimes?