The work ethic in generous welfare states

A few weeks ago I asked ‘has the work ethic declined because of generous welfare states?’, looking at trends in the work ethic over time. In this (slightly delayed!) conclusion to the piece, I go on to compare the work ethic in generous welfare states – and find that simple claims in either direction are hard to defend.

 “Benefits ‘wrecked the British work ethic,’ new study claims”, ran the Daily Mail headline I cited in the previous post. But when I looked into the paper by Michau 2009 (based on this LSE paper) that prompted the article, I found some interesting results, but ones that fall short of providing persuasive support for Michau’s claim.

What makes his claims seem particularly odd, though, is that it is countries with the most generous welfare states that have the STRONGEST work ethic (measured by attitudes to benefit fraud). This figure is again taken from Michau 2009:

[According to Michau, these numbers are marginal effects – so that being British (vs. French) increases the chances of saying ‘never justifiable’ by 24%.  Interestingly, as noted in the full paper (p33), Britain is an outlier here from the general relationship]

Alongside this, we can look at Ingrid Esser’s work (inc her PhD thesis), particularly in her chapter in the British Social Attitudes report from 2010 (which also has a helpful review of previous research).  She uses ISSP 2005 data and measures work ethic through two questions:

• I would enjoy having a paid job even if I did not need the money
• A job is just a way of earning money – no more

This also isn’t exactly what lots of people would mean by ‘work ethic’ – as Esser discusses, this is about non-financial employment commitment, or in plainer English, it measures what you get out of work beyond money. To my mind, this does NOT include feelings of a moral compulsion to work.

Still, like Michau, this shows a clear association of welfare generosity with employment commitment. The highest levels are among 13 countries being are in the generous welfare states of Denmark and Norway, and the weakest employment commitment is – contra the Daily Mail – in the UK with a relatively ungenerous welfare state.

Trends in different countries

So how does Michau square this? Well, he argues that we would EXPECT countries that have a stronger work ethic to have higher benefit generosity when the system is introduced – it makes the problem of benefit fraud smaller. BUT over time, he argues we would expect the work ethic to decline most in those countries with the most generous welfare states (p31) – and this is what he claims to show below  (all changes expressed relative to a 1930 baseline).

However, remember again the points from the previous post: this is not a direct measure of work ethic, and we don’t actually know if this is a trend or just a difference in ages.

More importantly, even if these trends are true, then the fact that the work ethic is STILL highest in the more generous welfare states – even after this sharper decline than less generous welfare states- is even more surprising.

And if we get around some of the problems in Michau’s analysis and instead look directly at trends using Esser’s measures (p95-6), then we instead find completely the reverse picture.  From 1989-2005, employment commitment in Norway and Germany rose.  However, in the US and Britain – and particularly among British men – it fell.

Err… So what does this all mean?

Michau purports to show that the welfare state leads to a declining work ethic, while Esser claims the complete opposite. To my mind, both studies are incredibly interesting, yet struggle to justify the claims they make – not least because neither study actually measures what I would understand by the term ‘work ethic’.

Still, on some level I’m convinced that both accounts are true:

• One of the effects of welfare states is Esping-Andersen’s ugly term ‘decommodification’ – that is, people don’t have to rely on the labour market quite as much, which enhances their ability to reject truly crap situations that they would otherwise have to accept out of desperation.

• On the other hand, as I’ve covered on the blog before, this doesn’t mean that people have no work ethic.  And we see that more generous welfare states – where workers are generally treated better – will have a GREATER commitment to the work that actually exists.

So the evidence does tell us something about the work ethic and the welfare state – but it doesn’t conclusively come down in favour of one political perspective or another. Once more, then, this is an area where the debate has run for centuries past and is likely to run for centuries more…