The Capacity of Welfare Regimes to Absorb Macro-economic Shocks

The Capacity of Welfare Regimes to Absorb Macro-economic Shocks

National Differences in the Development of Unemployment, Poverty and the Distribution of Income in the Aftermath of the Financial Crisis 2008

eBook - 2014
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The financial crisis, which struck the EU countries in 2008, was followed by the severest economic recession since the end of the Second World War. This book illustrates the development of unemployment, poverty and the distribution of income within the social systems of Sweden, Austria and Spain in the aftermath of the financial crisis 2008. Whether one country has been more effective in cushioning the negative impacts of the economic downturn and whether variations in the development of these socio-political indicators are attributable to the different welfare state models, are central to this piece of research. This analysis supports the findings of previous research. Firstly, it could be observed that some societal groups have been more vulnerable to the negative impacts of the financial crisis 2008 than others. Secondly, less developed welfare states have to react in more active ways to crises compared to countries which have the schemes already implemented before an economic downturn shows its consequences.   Auszug aus dem Text Text sample: Chapter 3, Impact of the Crisis on Unemployment, Poverty and Distribution: 3.1, Unemployment: Developments in Sweden, Austria and Spain in comparison: Given the severity of the Great Recession, it is expected to have impacts on living standards on a scale not seen for almost 80 years. However, the role of governments and the extent of welfare states have developed enormously since the Great Depression in the 20th century, and partly this development has been in response to events following the Black Friday. Instruments of economic and social policy that have been developed would indicate that we are better equipped to deal with a deep downturn. A critical macroeconomic indicator of recessions is the level of unemployment. Indeed, this is likely to be one of the most important mechanisms through which
recessions affect living standards. However, the full impact of a recession may not feed through to living standards until several quarters after the recession officially begins as unemployment is a so-called ̀lagging indicator̀. Selected data from the European Labour Force Survey 2007 until 2010 are used to illustrate the extent to which unemployment increased in the aftermath of the outbreak of the crisis and to spot variations in the effect concerning age groups and the level of education. 3.1.1, Unemployment rate of the total population (from 15 to 74 years): The Labour Force Survey comprises all persons 15 to 74 years of age (16 to 74 in Spain) who were not employed during the reference week, had actively sought work during the past four weeks and were ready to begin working immediately or within two weeks. As a result of the global economic crisis unemployment has risen sharply in the European Union. Every member state is affected by this surge. Nevertheless, the severity varies widely between countries and population subgroups. In the EU as a whole the unemployment began rising in March 2008, whereas the individual member states faced the onset of the rising unemployment at very different points in time. The fact that the member states structure and regulate their labour markets very differently from one another is one explanation for this phenomenon. In Spain, unemployment started to rise already in May 2007, whereas Austria and Sweden faced their turning point in the second quarter of 2008. Not only the starting points of the deterioration but also the further development of the unemployment rate show some interesting differences as illustrated in figure 1 below. Spain was the first country where the worsening economic situation led to increasing rates of unemployment. Since May 2007 the country experienced a continuously downward trend.
The labour market in Spain has been hit hard by the economic crisis. An early turning point for a rise in unemployment (May 2007), in combination with rapid monthly expansion, is responsible for the increase from 8,2 per cent (January 2007) to 20,5 per cent (December 2010) of the unemployment rate In December 2010, the last year of this investigation, unemployment stood at 20,5 per cent with no relief in sight. At the time of writing, the latest available data for Spain announce an unemployment rate of 25,1 per cent in August 2012. Sweden's unemployment rate started to rise in August 2008 from 5,9 per cent and experiences unsteady up- and downward movements peaking in April 2010 at 9,1 per cent. Since then, the unemployment rate slightly recovered and decreased until December to 7,8 per cent. The unemployment rate in Austria was by far more constant. At all periods analysed it was well beneath the unemployment rates of Spain, Sweden and the EU average. It was not until October 2008 that the unemployment rate started responding to the deteriorating economic context. It rose slightly but steadily from 3,7 per cent in October 2008 until it peaked approximately one year later, in September 2009, at still very low 5,2 per cent. Since then it improved continuously reaching 4,2 per cent in December 2010.
Publisher: Hamburg : Diplomica Verlag, 2014
Edition: 1st ed
Copyright Date: ©2014
ISBN: 9783954896509
Branch Call Number: Electronic book
Characteristics: 1 online resource (54 pages)
Additional Contributors: ProQuest (Firm)


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