A Comparative Analysis of Welfare Systems and the Health and Social Sector: Evidence from 16 European Countries

The purpose of this paper is to analyse the differences and similarities between 16 European Member States1 with regard to welfare systems, thereby defining possible groups of homogeneous countries. The model analyses social protection expenditure, the employment characteristics of the social sector and some variables concerning child and long term care.
The dissimilarity measures (cluster analysis and MDS) identify in both models a group of Eastern European countries with similarities. The exception is Slovenia, which is part of a group including Spain and Portugal. A further desegregation of the Eastern cluster provides evidence that 4 sub-groups may be identified: Hungary and the Czech Republic; Latvia and Lithuania; Slovakia and Estonia and finally Poland.
The paper also argues that the private sector, in particular the non-profit sector, is assuming an increasingly key role in social services provision around Europe, facing the challenges launched by demographic changes and the need for flexibility.

1. Introduction
The European Union and market globalisation process conflict with the national systems of welfare. In the context of the EU Member States, the co-existence of different Welfare States is evident and the process of integration between them is slow, notwithstanding European guidelines promoting cohesion.
Almost twenty years ago, Esping Andersen’s analysis (1990) identified 4 different kinds of welfare models:
•    The Anglo-Saxon model, based on a constant and solid public-private contract relationship. Here the state fixes the rules and the profit and non-profit sector operate in a market where the consumers choose the services they need.
•    The corporative model (i.e. the Netherlands) where the public and private sector collaborate on the basis of the subsidiary principle: non-profit organizations provide social services with the financial support of public authorities and the state signs agreements with the private stakeholders.
•    The Southern Europe model based on a prominent presence of the family in the public-private framework.
•    The Scandinavian model where the public sector has a prominent role, supported by the Third Sector when its contribution may improve efficiency that the state is not able to provide.
Nowadays EU Member States are implementing different strategies to reform welfare in the face of new challenges arising from demographic changes and the Lisbon strategies promoting greater participation of women in the labour market.
This paper intends to cluster EU Member States, including the roles of the family and the private sector in the provision of health and social services. This clustering also includes countries that were not part of the EU during the Esping-Andersen analysis, with the focus on emphasising similarities and dissimilarities in relation to the 1990’s model.
The paper first presents the current debate on the welfare system, with reference to welfare strategies and the role of the Third Sector in the different contexts. Then, it focuses on a quantitative analysis of a multidimensional European dataset using dissimilarity measures and trying to cluster the countries in order to understand the different welfare systems. To do this, the statistical techniques used are a cluster analysis and classical metric multidimensional scaling (MDS). Finally, the paper reflects upon the links among empirical evidence, welfare strategies and welfare systems identified by current literature.

2. Welfare Systems and Informal Social Networks in Europe: The Demand for Long-Term Care and Child Care

The biennial report on social services (EC, 2008) shows there are countries, especially in Southern and Central Europe where the family fulfils the role of a social care provider and meets the supply shortage of public and private services. In Southern Europe2, families are still legally bound to take care of children and elderly people; in Central Europe, family responsibilities are regulated implicitly; while in the UK and Scandinavian countries there is more explicit individual entitlement to a minimum level of service. Central and Eastern European countries have moved back to a care regime which relies heavily on the family3. In accordance with Kolarič (2009: 2), in ex-socialist societies the welfare regime concept represented a “methodological barrier”, because “…in addition to the state, which played a dominant yet insufficient role in ensuring social security and social services to its citizens, a significant role was also played by firms and the family, with the latter bearing a heavy burden…”. In countries like Italy and Germany, the carer is usually a female family member who does not participate in the labour market and who takes care of children when she is young and of parents when she is older (Huber et al., 2007).
The lack of care for children under 3, except in Nordic countries and France, is related to traditional views of childcare within the family. In contrast, for the age-group from 3 to compulsory school age, there is a trend towards universal access to childcare following an educational approach. However, as care regimes strive to adapt to demographic and social changes, common trends are emerging. Solutions to financial constraints have been sought in two directions: reduction of entitlements – targeting services more closely at the population in greatest need – and reduction of care costs. As a consequence of the search for cost effectiveness/reduction, we observe a convergence in the ways the care market is organised: concerning long-term care, all countries are moving towards home care, private provision, and cash transfers; whereas in countries where there is a traditional lack of child care public facilities, other providers are increasingly making up for the lack of the public facilities. Childcare facilities do not cover all the needs of parents in terms of available hours and percentage of children cared for: in Germany and Italy there is an urgent need to increase childcare provision in order to improve female participation in the labour market; in France the system has been shaped to face the problems of single parents and large families; in the Czech Republic the provision of childcare has fallen due to a reduction of the birth rate and parental leave has increased, encouraging the family to play an active role in childcare; finally, in Poland it is only in recent years that the childcare sector has been developed (Huber, 2007). In many cases the family has to pay for the facilities offered by the market. For example, in Bulgaria, the deterioration of public finances requires extensive parental participation in childcare, both in terms of financing and time (Pestoff, 2008). In Italy, there is a lack of public crèches for children under 3 and private ones have to be paid for by the family; in many cases they are not affordable and women have difficulty balancing work and family with negative consequences for their participation in the labour market. Moreover, countries like France, Sweden and also Germany require active participation of parents in childcare (Pestoff, 2008). In this last case, the family cooperates with professionals in the care facilities, creating supportive partnerships where parents spend time in the association and can substitute professional carers. Such associations are often supported by public funds.
In response to demographic changes, health care and long-term care now play a crucial role in promoting active ageing. Good health is a critical precondition for activity in old age. While, with life expectancy steadily progressing, long-term care is claiming an increasing share of resources, in terms of both time and financial expenditure (Cagiano de Azevedo, 2004). Developing innovative ways of providing adequate health and long-term care is crucial to ensure equal and universal access (see the suggestions provided by the Expert Group on Social Determinants of Health Inequalities). Demand for care, however, is increasing rapidly (Oecd, 2005), and all countries are experiencing problems in recruiting enough workers to meet the demand. In some countries, the shortage of care workers has been met by a large inflow of immigrant, mostly female, workers. It has been argued (Simonazzi, 2008) that the way in which care is provided and financed may entail considerable differences in the creation of a formal care market. Provision in kind and ‘tied’ monetary transfers – that is, cash benefits regulated in various ways — are most effective in creating a formal market. Conversely, unconditional cash allowances have slowed down the creation of a formal care market, encouraging, instead, supply from the informal market via either family carers or carers hired by the family in the market.

Gabriella Pappadà: University of Viterbo & CERES — Centre of Socio-Economic Research.Address: Ceres, via Po 102, 00198 Rome. E-mail:
1 This analysis is limited to 16 Member States due to a lack of certain data for Bulgaria, Cyprus, Denmark, Germany, Greece, Ireland, Malta, Romania, Sweden and the UK. Luxembourg has not been included because it risked being an outlier.
2 These results emerged from two different European research projects: ESOPE and YOUTH. The ESOPE project analysed home care in Italy, France and the UK, focusing on local strategies and their impact on employment, in particular regarding women and migrant women. Precarious Employment in Europe: A Comparative Study of Labour Market-Related Risks in Flexible Economies financed by the European Commission, ; Eurofamcare, etc. This project shows that women are often involved in the care of their elderly parents and require the help of the informal market of private unskilled careers because of the problems they have in balancing work, parents and their own families. YOUTH project The main aims of this project commissioned by DG Employment were to get a comprehensive overview of current practices of labour market integration of young people and to identify best practices to improve young people’s pathways to work in the future. This project reveals that young women suffer a lack of child care services and face problems in balancing work and family.
3 While families in Germany and Italy have a traditional role, in the Czech Republic and Poland situations depend on the transition process.

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