Myths around 'benefit dependency'

When Beveridge set out his plan for the British welfare state in 1942, ‘idleness’ was one of the five giants that he aimed to slay (along with want, disease, ignorance and squalor).  Somewhere since then, this has been translated into ‘benefit dependency’ – not quite the same thing, as lone mothers and carers can hardly be called idle.  Still, publics and policymakers are concerned about ‘benefit dependency’ as a social ill, so I was a struck by an international comparison of benefit dependency from the launch of the high-profile new book, The Labour Market in Winter.

The book launch took place earlier this month and was sufficiently important for the Shadow Chancellor Ed Balls to attend. The chart that caught my eye is this one:

[You can find this in the slides , and I'd guess also in the book (which I've now bought), although I haven't reached this chapter yet)]

The most interesting point is in Paul Gregg’s message above the slide  - the US and UK are surprisingly similar in their levels of welfare receipt, and this is noticeably less than the levels in most European OECD  countries. At least in the UK, public opinion seems to think that the UK has unusually high welfare receipt, with the US in particular being much lower – so these results should come as something of a surprise.

It’s also clear that the composition of welfare receipt is different in different countries – incapacity benefits being much more important in Sweden than Germany, for example.  Given the substitutability between different types of welfare payments, this means that comparisons of any single type of benefit (without any context) are likely to be somewhat misleading. And clearly Spain is a outlier in this company, although this is probably less true when other countries are added to the comparison.

Just one graph, then, which raises as many questions as it answers. But a graph that shows that ‘benefit dependency’ is not the widely-supposed failure of the British policy elite, but a phenomenon we can find across high-income countries at the start of the 21st century.

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