Journal of Comparative Policy Analysis, 2000, vol 2 pp 91-125
'Wellbeing' and 'welfare' are often bracketed together, in particular wellbeing and state-welfare. The level of wellbeing is believed to be higher in welfare states, and its distribution more equitable. This theory is tested in a comparative study of 40 nations 1980-1990. The size of state welfare is measured by social security expenditure. The wellbeing of citizens is measured in terms of the degree to which they lead healthy and happy lives.
Contrary to expectation there appears to be no link between the size of the welfare state and the level of wellbeing within it. In countries with generous social security schemes people are not healthier or happier than in equally affluent countries where the state is less open-handed. Increases or reductions in social security expenditure are not related to a rise or fall in the level of health and happiness either. There also appears to be no connection between the size of state welfare and equality in wellbeing between its citizens. In countries where social security expenditure is high, the dispersion of health and happiness is not smaller than in equally prosperous countries with less public sector spending. Again increases and reductions in social security expenditure are not linked with a rise or fall in equality in health and happiness among citizens.
This counter intuitive result raises five questions: 1) Is this really true? 2) If so, what could explain this lack of effect? 3) Why is it so difficult to believe this result? 4) How should this information affect social policy? 5) What can we learn from further research?