Financial crisis and the convergence of European welfare provision

The paper seeks to evaluate whether and to what extent financial crises may have any impact on the dynamics of national welfare provisions. To this aim, the analysis has considered the behavior of national social expenditure for a sample of European countries in the aftermaths of the 2007 global financial crisis. Data relates to total social expenditure and its main items (old age-survivors-incapacity related, labour and healthcare). Results show that the financial crisis did not change the convergence that was in place at the time for old age-survivors-incapacity and labour policies’, as driven by the idea of a common European Social Model. However, it contributed to increase differences in terms of the total amount of social provision and health sector provision, with the latter presenting a turnaround with respect to the period before the crisis. The healthcare sector, in particular, was considered as the least productive and therefore the one to which the greatest cuts could be applied in the presence of resources availability constraints. These limits would later become stringent when countries were hit by the covid pandemic crisis.