Blog Post

Charting public opinion on the future of the welfare state

As part of the of the Vision Europe Summit, a survey was held between July and August 2015 to gauge public opinion on the welfare state after the crisis. The survey revealed citizens’ general confidence in the welfare state, as well as preferences regarding the welfare state’s future goals and financing. We discuss the results.

By: and Date: November 10, 2015 Topic: Macroeconomic policy

Lack of confidence in the welfare state in the year 2050

Rising EU life expectancy and declining fertility represent major challenges to welfare states in the European Union, in particular with respect to future pension and health systems. The European Commission’s Ageing Report (2015) states that the EU will move from four working-age people per person over 65 today, to about two working-age people in 2040. This will affect both revenue and spending: there will be less revenue because of the shrinking working-age population, and more spending because of higher costs for pensions, health and long-term care.

The survey shows that EU citizens are well aware of these developments: when asked about their confidence in the welfare state in 2050, respondents across the eight countries surveyed feared that the provisions of pensions, as well as care for the elderly, would no longer meet citizens’ needs. Another important fear is the adequacy of unemployment benefits, as well as health care in general.

Figure 1: Lack of confidence in the welfare state in the year 2050

Welfare state graph 1

Source: Vision Europe Summit Survey Results: Note: Diagrammed is only the “no”-option in different policy fields as an average across eight countries.

.

Table 1 reports country-level results and reveals that compared to other countries, German respondents are most worried when it comes to pensions and the care of the elderly in the future, with 70 % of respondents fearing that pensions will no longer meet citizens’ needs and 63 % fearing the same when it comes to care for the elderly. Moreover, 67% of French and 63% of Italian and Polish citizens, are pessimistic about the adequacy of pensions

Another important policy measure questioned by citizens is support for the unemployed in the year 2050. Only in Germany and the United Kingdom did fewer than 50 % of citizens express doubts about adequacy looking ahead. The situation is different in Italy, which is recovering slowly from the recent crisis, and reports that 59% of respondents are pessimistic about unemployment benefits.

Table 1: In the year 2050, do you think that the public welfare system in your country will cover the needs of citizens in the following fields? Answers possible: Yes and No, Diagrammed is only the “No”-option.Welfare State table 1

Source: Vision Europe Summit Survey Results. Note: The heat-map ranges from yellow to red following the increasing “No”-answers in the single countries. Answers possible: Yes and No, Diagrammed is only the “No”-option.

Orientation of the future welfare state

In recent years, the importance of a ‘social investment’ approach to the welfare state has emerged (see i.e. European Commission), which sees a shift from a ‘compensating’ welfare state to a ‘capacitating’ welfare state, focusing on policies designed to strengthen people’s skills and capacities and support them to participate fully in employment and social life. Investments in early childhood education and training are one of the pillars of social investment. In line with this paradigm shift, 47% of citizens regard education as the most important aim of the welfare state looking ahead (Figure 2). Health as well as care for elderly people follow closely, with respectively 46% and 43% of respondents classifying these two aims as extremely important.Orientation of the future welfare state

Figure 2: Orientation of the future welfare state

Blog¨11102015_2

Source: Vision Europe Summit Survey Results: Note: Diagrammed is only the “extremely important”-option as an average across eight countries.

On a country level (Table 2), education represents the most important aim in the United Kingdom, Germany, Belgium and Italy, while French and Polish citizens give more or less the same importance to both education and health care. By contrast, respondents in Portugal and Finland find health to be the most important goal looking ahead, as opposed to education. Interestingly, child care gains absolute importance only in Poland.

Table 2: Thinking about the future public welfare system in your country how important should the following aims be? Answers possible: Extremely important, Very important, Somewhat important, Somewhat unimportant, Unimportant. Diagrammed is only the “Extremely important”-option.

welfare state table 2

Source: Vision Europe Summit Survey Results. Note: The heat-map ranges from yellow to green following the increasing importance of policies in the single countries. Answers possible: Extremely important, Very important, Somewhat important, Somewhat unimportant, Unimportant. Diagrammed is only the “Extremely important”-option.

Reform options and future financing

As Table 1 shows, across all eight countries citizens question the adequacy of welfare state provision in the future. In this respect, the topic of citizens’ preferences on the nature of future financing is interesting. Figure 3 reports respondents’ preferences, which can be divided into maintaining the current level of public welfare and increase taxes, as opposed to maintaining taxes and reducing the current level of public welfare.

The largest share of citizens advocating the preservation of current benefits can be found in Finland, where 66% support an increase in taxes to maintain current levels of public welfare. A similar picture emerges for the United Kingdom and Germany, where respectively 56 % and 52% of respondents are in favour of increasing taxes. Importantly, these are also countries with levels of public debt between 60 and 90 % of GDP (see right side column in Figure 3), whereas citizens in countries with higher public debt seem to be less in favour of increasing taxes. Indeed, only 46 % of Italian and 39% of Portuguese citizens support an increase in taxes over the reduction of the current level of benefits. Poland is an exception, as people still favour a reduction of current level of public welfare over an increase in taxes, despite a relatively low public debt ratio.

Figure 3: Future financing

Source: Vision Europe Summit Survey Results. Note: the figures are adjusted for “don’t know” answers; GGD = General Government Debt in % of GDP, 2014.

 

Blog¨11102015_3

Conclusion

Looking ahead, Europe’s citizens are most worried about the adequacy of pensions and care for the elderly. When it comes to future aims of the welfare state, citizens in each of the eight countries surveyed highlight the importance of education, knowledge and skills. And looking at preferences over the future financing of the welfare state, countries with comparatively lower levels of public debt are willing to contribute more in order to maintain the current level of public welfare benefits, while countries with higher levels of public debt prefer cuts in benefits over increases in taxes.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

Read article
 

Blog Post

European governanceInclusive growth

The socioeconomic effects of COVID-19 on women

The pandemic has disproportionately affected women both professionally and at home. Although the gender gap in labour force participation since the onset of the pandemic hasn't worsened, policy still needs to tackle existing gender gaps, which for some EU countries are very substantive.

By: Maria Demertzis and Mia Hoffmann Topic: European governance, Inclusive growth Date: November 3, 2021
Read article Download PDF
 

Parliamentary Testimony

European ParliamentInclusive growth

Understanding the socioeconomic effects of the COVID-19 pandemic on women

Testimony before the European Parliament's Committee on Economic and Monetary Affairs (ECON) on the consequences of the pandemic on women.

By: Maria Demertzis and Mia Hoffmann Topic: European Parliament, Inclusive growth, Macroeconomic policy Date: October 27, 2021
Read article More by this author
 

Blog Post

Inclusive growth

Making antitrust work for, not against, gig workers and the self-employed

Policymakers should act to deal with labour-market concentration trends that potentially harm workers, especially gig workers and the self-employed.

By: Georgios Petropoulos Topic: Digital economy and innovation, Inclusive growth Date: October 11, 2021
Read article More on this topic
 

External Publication

Winners and losers of energy and climate policy – How can the costs be redistributed?

Who should bear more and who less of the burden achieving climate policy goals?

By: Gustav Fredriksson and Georg Zachmann Topic: Green economy Date: September 24, 2021
Read about event More on this topic
 

Past Event

Past Event

How to strike the right balance between the three pillars of the pension system?

In this event panelists will discuss the future of European pension schemes.

Speakers: Elsa Fornero, Svend E. Hougaard Jensen and Suvi-Anne Siimes Topic: Macroeconomic policy Date: September 23, 2021
Read article More on this topic More by this author
 

Opinion

Inclusive growth

For remote work to work, new ground rules are needed

The pandemic has shown workers and employers that another way to work is possible. The European Union should develop a framework to facilitate hybrid work.

By: Mario Mariniello Topic: Inclusive growth Date: September 23, 2021
Read article More on this topic More by this author
 

External Publication

A Safety Net for the Green Economy

How to protect workers hurt by the fight against climate change.

By: Simone Tagliapietra Topic: Green economy Date: July 20, 2021
Read article More by this author
 

Opinion

Inflation, inequality and immigration: Spelling the digital recovery with three “I”s

The digital transition offers us a new opportunity to reach out across the global economy - hopefully we will find the strength to use it.

By: Rebecca Christie Topic: Digital economy and innovation, Global economy and trade Date: June 3, 2021
Read about event
 

Past Event

Past Event

The Future of Work – a conversation with Commissioner Schmit

EU Commissioner for Jobs and Social Rights Nicolas Schmit joins Bruegel for a conversation around the future of work.

Speakers: Mario Mariniello and Nicolas Schmit Topic: Digital economy and innovation, Inclusive growth, Macroeconomic policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 25, 2021
Read about event More on this topic
 

Past Event

Past Event

Living standards and financial resilience across Europe

What has the impact of the pandemic on households’ financial resilience been, and how should policy makers respond?

Speakers: Romina Boarini, Zsolt Darvas, Maria Demertzis and Daniel Tomlinson Topic: Macroeconomic policy Date: April 21, 2021
Read article More on this topic
 

Opinion

Can households in the European Union make ends meet?

Half the households surveyed by Eurostat see themselves as unable to find the resources they would need to cope with an unexpected expense within a month, estimated by experts at €375 in the case of Greece.

By: Maria Demertzis, Marta Domínguez-Jiménez, Annamaria Lusardi and Bruegel Topic: Banking and capital markets Date: July 24, 2020
Read article Download PDF More by this author
 

Working Paper

The impact economy: balancing profit and impact

Governments and companies can reinforce each other in their pursuit of sustainable development, which is based on three pillars: economic, social and environmental. An impact economy, in which governments and companies balance profit and impact, is best placed to achieve the United Nations sustainable development goals.

By: Dirk Schoenmaker Topic: Global economy and trade, Green economy Date: July 7, 2020
Load more posts