Elsevier

Health Policy

Volume 80, Issue 2, February 2007, Pages 328-339
Health Policy

Welfare state matters: A typological multilevel analysis of wealthy countries

https://doi.org/10.1016/j.healthpol.2006.03.004Get rights and content

Abstract

Building on the social science literature, we hypothesized that population health indicators in wealthy industrialized countries are ‘clustered’ around welfare state regime types. We tested this hypothesis during a period of welfare state expansion from 1960 to 1994. We categorized data from 19 wealthy countries into 4 different types of welfare state regimes (Social Democratic, Christian Democratic, Liberal and Wage Earner Welfare States). Outcome variables were the infant mortality rate (IMR) and the low birth weight rate (LBW), obtained from the Organization of Economic Co-operation and Development (OECD) Health Data 2000 and from the United Nations Common Statistical Database (UNCSD). A two-level multilevel model was constructed, and fixed effects of welfare state were tested. Through the 39 years analyzed, Social Democratic countries exhibited a significantly better population health status, i.e., lower infant mortality rate and low birth weight rate, compared to other countries. Twenty percent of the difference in infant mortality rate among countries could be explained by the type of welfare state, and about 10% for low birth weight rate. The gap between Social Democracies and other countries widened over the 1990s. Our results confirm that countries exhibit distinctive levels of population health by welfare regime types even when adjusted by the level of economic development (GDP per capita) and intra-country correlations. It implies that countries, as groups, adopt similar policies or through any other ways, achieve similar level of health status. Proposed mechanisms of such process and suggestions for future research directions are presented in the discussion.

Introduction

This investigation starts with two different aims: one methodological–theoretical and the other empirical. The former is related to the increasing realization of the interdependence among countries, which would require a contextual or multilevel modeling for comparative health policy analyses. The latter is associated with examining the relationship between the type of welfare state and the average levels of population health among wealthy (OECD) countries in the last 39 years (1960–1998). OECD countries have been chosen in comparative public health studies because of the quality of data available for the studies [1], [2], [3]. Also, because OECD countries are the most powerful nations in the world, we can control for external influences on domestic policy decisions, as these are vastly reduced. These two objectives will be explained in detail in the following section.

Since Esping-Andersen's “The Three Worlds of Welfare Capitalism” [5], a number of macro-comparative studies have been conducted using three or four different welfare regime types, and his typology has been proved to be a useful explanatory device for the emergence of welfare states, including national health policies [4]. Esping-Andersen claims that there are qualitatively different arrangements between state, market and family, resulting in three regime type clusters of nations [5]. One of these types is the ‘Liberal’ Welfare State, “in which means-tested assistance, modest universal transfers or modest social-insurance plans predominate”, and this welfare state type is also closely related to traditional work-ethic norms. In the second type, we find ‘Conservative–Corporatist’ welfare states, where states stand up to provide welfare services to their citizens, but at the same time uphold social status differences so that the resulting redistributive impact is minimal. Also, the role of churches and families as providers of social services is emphasized in this type. Lastly, there is ‘Social Democracy’, “in which the universalism and de-commodification of social rights are extended to the new middle classes”. In contrast to the Conservative–Corporatist model, the state in Social Democracy takes over much of the social welfare role of the family. In addition, the Social Democratic regime espouses full employment as an integral part of its welfare state commitment, which is characteristically distinct from the other two regime types.

Huber and Stephens [4] have modified Esping-Andersen's typology by using four categories instead of three. Their approach basically renames Esping-Anderson's “Conservative–Corporatist” group as “Christian Democratic” and distinguishes what Castles and Mitchell [6] call “Wage Earner Welfare States” from Anglo-Saxon countries because before circa 1980, the welfare system in Australia and New Zealand was quite different from the US and the UK [4], [6], [7]. The crux of Castles and Mitchell's observation is that the welfare state regime type or the provision of welfare state services is not only determined by the strength of ‘left’ parties, but also by the strength of ‘right’ parties [6], [7]. These authors classified countries into four categories based on household transfers as a percentage of GDP (“welfare expenditure”: high and low) and average benefit equality (“use of equalizing instrument”: high and low). They argue that countries with high equalizing instruments and low expenditures (what they labeled “Wage Earner” countries) are “nations in which a strong labor movement has found it difficult to translate popular support into cabinet incumbency during the post-war era” (p. 17). The welfare state expenditure of “Wage Earner” countries is low because a long-term incumbency is needed for increases in welfare expenditure. On the other hand, through either trade unions functioning as an ‘extra-parliamentary veto group’ or through ‘strong popular sentiment within the population, which governments of whatever complexion must take into account in their decision-making’, these countries have managed to introduce this “equalizing instrument” into the state policy system [7]. The US and the UK, on the other hand, are countries in which “the role of the labor movement has been vestigial and in which rightist liberal parties have been dominant” (p. 16).1

In addition, there is a welfare state type called “Confucian Welfare State” [8] or “East Asian Welfare State” [9]. The concept is a product of debates about Esping-Andersen's welfare state typology, claiming that the typology is too simple to capture the characteristics of former dictatorships (e.g., Southern European countries) or non-western (e.g., Japan) countries. In this type of countries, welfare services are provided by families rather than by the state or the market, which is confirmed by Hong through a qualitative comparative analysis method (Boolean algebra) [10]. However, other authors allege that East Asian countries, including Japan, can be also categorized using Esping-Andersen's typology. Esping-Andersen claimed that Japan showed a mixed type of “Conservative–Corporatist” and “Liberal” Welfare State, and as a whole, could be categorized as “Conservative–Corporatist”, based on the characteristics of the social security system and the popular perception of welfare [5], [11]. He also argued that patriarchy and Confucianism in Japan operated as functional substitutes for conservatism and Christianity in European countries in the process of building a welfare state. While acknowledging that Japan showed characteristics of Conservative–Corporatist, Cho pointed out that Esping-Andersen's “de-commodification” score was similar to Canada or the UK and therefore Japan should be categorized as a Liberal Welfare State [12]. Scholars in this tradition generally agree on the fact that Japan shows a mixed type of “Liberal” and “Conservative-Coporatist” even if they might vary in the final decision to assign Japan to either one of these two categories.

One of the main functions of the welfare state is ‘income redistribution’; therefore, the welfare state framework has been applied to the fields of social epidemiology and health policy as an amendment to the ‘relative income hypothesis’. Welfare state variables have been added to measures of income inequality to determine the structural mechanism through which economic inequality affects population health status [13], [14], [15], [16], [17], [18]. However, while the relationship between income inequality and population health has been examined in several cross-national studies during the last three decades [19], [20], few studies have explored the relationship between political variables and population health at the national level (e.g. [14], [15], [16], [18], [21]) and none, to our knowledge, has included a comprehensive number of political variables to understand their effect on population health, while simultaneously adjusting for economic determinants. Muntaner et al. [17] included a wide range of variables although their analysis was based on GDP adjusted cross-sectional correlations [17]. Overall, these studies suggest that welfare state variables (e.g., access to health care) could be important predictors of population health outcomes. However, all of these studies consider countries to be independent from one another, a fact that follows implicitly from their methodology: country-level fixed effects models or general cross-sectional linear regression, which amount to methodological individualism in international comparative studies. This methodological approach might be insufficient for two reasons. First, based on contemporary history [22], countries with similar types of welfare state regimes should display similar population health outcomes as a result of the similarity between their health and welfare policies. Second, it is unrealistic to merely assume that the countries are independent from one another, especially in an era of increased economic, political and cultural interdependence.

Some of these theoretical concerns were addressed empirically in a couple of articles in the field of historical political sociology. For example, using a method of sequence comparison, or optical matching, Abbott and DeViney analyzed the sequence in which welfare programs were adopted and which of the three levels, individual country, diffusion from one country to another, or world-wide random phenomenon, were responsible for the events in 18 advanced countries [23]. In their conclusion, they strongly suggested that students of welfare states should take the second level (diffusion) and the third level (world-wide) more seriously and that when multilevel modeling is adopted, local effects would become considerably weaker. This means that rather than countries making their own policies, they learn from adjacent countries (diffusion) or from world-wide trends.

A more generous welfare state should result in better population health outcomes. This could be through the direct impact of welfare services which provide physical well-being, for example, change in workers’ compensation and resulting change in occupational health status. Or this could be because more generous welfare states tend to have better health care systems. Either way, population-level indicators should be clustered among countries that fall into the same type of welfare state. Thus, the main goal of this study is to examine whether indicators of welfare state regime types have statistical significance even when models are adjusted by country-specific variances and the country's level of economic well-being (measured by GDP per capita). The implication of confirming the effect of welfare state regime type is that (1) welfare state typologies can be used as a informative analytical tools in public health and (2) historically, a certain type of welfare state establishment has provided a better health care environment to its population than others. Confirming this typology may also limit the amount of ‘exceptionalism’ that can be claimed for any particular country: countries influence each other's policies. The implication will be that health policy analysts need to pay attention to these ‘external’ aspects of policy planning and implementations.

Section snippets

Data sources and variables

The study was conducted among 18 wealthy countries of Europe (13), North America (2) and Asia and the pacific region (3) from the period of 1960–1998 (39 years). Based on Huber and Stephens’ typology [4], we categorized these countries into four different types of welfare state regimes: Social Democratic, Christian Democratic, Liberal and Wage Earner Welfare States. Huber and Stephens did not include Japan in their work, so we categorized it as a Wage Earner Welfare State. Japan is usually

Results

The multilevel approach enables us to decompose the variance into each level. In a usual regression model variances are assumed to be, and should be, random and independent. In multilevel analyses, we assume that errors are correlated. For example, our dataset includes 39 observations from each of the 18 countries. We can logically assume that the observations from one country are more highly correlated with themselves than with those from other countries. By analyzing the within (and between)

Discussion

Our results confirm that countries exhibit distinctive levels of population health (in this study, the infant mortality rate and the low birth weight rate) by welfare regime type. Social Democratic countries as a group showed significantly better health status compared to other countries during the whole period of 39 years investigated. Therefore, our investigation provides additional empirical evidence to previous studies [14], [16], [17], [18], [25] suggesting that Social Democratic countries

Acknowledgements

Authors want to express their gratitude to Dr. Hao (Johns Hopkins University) for her comments on several aspects the data analysis and to two anonymous reviewers.

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