The rise of the modern welfare state, ideology, institutions and income security: analysis and evidence

In the 25-year period between 1960 and 1985, there was a great expansion of welfare state programs throughout the West. The fraction of GDP accounted for by social expenditures doubled in much of Europe and grew by 40–50% in many other OECD nations. After 1985, growth in social insurance programs slowed relative to other parts of the economy. This paper explores the extent to which institutions and ideological shifts may have accounted for the period of rapid growth, for differences in the extent of that growth, and for the subsequent reduction in the growth rates of social insurance programs.