Esping-Andersens Welfare Regime Model Essay Example | Topics and Well Written Essays - 1250 words

Esping-Andersens Welfare Regime Model - Essay Example The setting of a state’s welfare is decisive to the operation of the state and the health of the citizens. It is vital to discuss the differences in state welfare regimes. This helps in understanding the differences in state operations and the health of its population among countries. Esping-Andersen came up with the most relevant typology for welfare states. Esping-Andersen using classical European political economy approach differentiates between three types of welfare regimes (Edwards, 2003). Esping-Andersen differentiates the state welfare regimes on three major principles. These principles are social stratification, deco-modification and the public private mix. Deco-modification refers to the extent to which the welfare of the individual is independent of the market. It also refers to the individual’s ability to receive social services as a right. Social stratification describes the welfare state role in matters concerning structure of the society according to Schi ldt (2010). Lastly, public-private mix focuses on roles played by the state, the market, family and the voluntary sector in the particular welfare regimes. Espin-Andersen identifies three main types of welfare regimes: the conservative, social democratic and the liberal welfare regime models as noted by Edwards (2003). The liberal model incorporates free market maximization for the market maintenance. It makes the assumption that all people are able to participate in the market. The underlying idea in market participation leads to freedom of competition. It emphasizes on public and private sector partnership. The workers in liberal model are unlikely to be fully co-modified, however they advocate for cash compensation. According to Annamari (2009), the liberal model of state welfare regime is found in countries like England and the United States of America Conservative Welfare Regime The conservative welfare regime is popular in countries like Germany, France and Belgium among other s. It promotes social assistance and provides for extensive welfare services for all the population. This model perceives the state as a minimal interventionist. Esping-Andersen argues that categorizing the European welfare states as part of the conservative model can be viewed as pejorative (Edwards, 2003). Social Democratic Welfare Regime Social democratic welfare is popular with Nordic countries. It is also referred to as Nordic Model. The social democratic model espouses individualism thus removing individual reliance on the family and it is associated with expensive taxes. This model has an element of egalitarianism which depicts the practice of universalism. The model is also individual oriented as it promotes their well-being (Larsen, 2006). The Advantages and Disadvantages of Comparing Welfare States Using Esping-Andersen’s Welfare Regime Esping-Andersen model has been of importance in as far classification of states according to welfare regimes. The model has several advantages which makes it remain more relevant compared to other welfare regimes. In as far as the social democratic welfare regime is concerned; it is redistributive in terms of the states wealth. Universal welfare and systems of benefits are used as rights and there is public provision of the universal welfare services. Esping-Andersen’s social democratic model depends on high employment levels and thus offers women employment. It also provides less emphasis on the family’s responsibility for its members’ welfare as opposed to other models. The state therefore assumes most of the family responsibility (Larsen, 2006). The elements of egalitarianism depict in Esping-Andersen’s model the practice of universalism as suggested by Mann (2001). The advantage here is that every citizen enjoys same benefits and rights as well regardless of whether they are rich or not. This means that there is equal provision of services without

Government Spending and Price Levels Term Paper

Government Spending and Price Levels - Term Paper Example A part of the consumer’s income is taxed. Let the fixed rate of tax be t. Then the savings can be written as S = (1-t)Y-C+ tY-G. Consumption can be written as C=c(1-t)Y, c is the marginal propensity to consume. Therefore, S=(1-c)(1-t)Y-tY-G. Let us concentrate on the monetary side. The assumption here is that the supply of money (M) is determined by the central bank. The consumer’s decision on their holdings is the sole driving force behind the demand for money. The consumers allocate a part of their wealth as currency and the remaining part in the form of bonds. It is expected that an increase in the interest rate will induce consumers to keep a smaller proportion of their income as currency which, in turn, reduces the demand for money. An expansionary monetary policy will reduce the interest rate and increase output in the short run while an expansionary fiscal policy will do just the opposite (Weins, n.d.). A reduction in marginal propensity to save will increase the rate of interest along with the output. A shock of drop in consumer’s confidence will have its effects on savings, investment, money supply and demand assuming rate of interest and output remains constant. (Massachusetts Institute of Technology, 2009, p. 1) The original point A is still equilibrium of the money market. Therefore, the LM curve must include point A. But investment is same as before but savings has increased. So the point A which originally was in the IS curve is now a point where S>I. If there is movement to the right from A, then interest rates and investments are same and savings increases due increase in output. This will make the savings even bigger and so the actual movement should have been to the left of A. (Massachusetts Institute of Technology, 2009, p. 1) An increase in money supply will have no effect on savings and investment or demand for money. Therefore, savings and investment will remain the same and so IS curve must include point A. Keynesian model of cross planned expenditure The cross planned expenditure is given by Ep. Ep= C+I+G. Investment Demand Schedule (Cooke, 2010, p. 10) Ip is planned investment. Ep=E(Y,r,G,T)=C(Y-T)+Ip(r)+G Keynesian Cross (Cooke, 2010, p. 12) Government Spending (Cooke, 2010, p. 13) Phillips Curve The relationship between inflation and unemployment is represented through Phillip’s curve. There is a relation between the prices charged by the company and the wages. (Hoover, n.d.) Suppose the government plans for an expansionary fiscal and monetary policy in order to bring the unemployment below the natural rate. This results in increase in demand conditions. The firms are encouraged to raise the prices. The rate of increase in prices is faster than that anticipated by the workers. Workers in this situation are likely to suffer from money illusion. They witness a rise in the wage rate and thereby supplies more labor. This results in fall unemployment rate (Liaudes, 2005, p. 31). Imperfect Information The real economy is significantly affected by monetary policy in the short run. The non-neutral effects of monetary policy rise because of temporary nominal price rigidities. The short term interest rate is taken as the instrument of monetary policy. The Central Bank should adjust the nominal rate so that it cannot offset the movement in expected inflation. The nature of the disturbances has a role to play in this part. The Central Bank may not