Does the Welfare State's"Social Investment Turn"Reduced Income Inequality?:An Empirical Analysis based on 18 OECD Welfare States(1990 to 2017)
Since 1990s,"social investment turn"has become an emerging paradigm for guiding welfare state to balance efficiency and fairness.However,the extent to which social investment turn of the welfare state reduced inequality is still controversial,and the potential moderating effect of welfare regime is absent.An objective of this paper was to investigate the impact of"social investment turn"of welfare states on income inequality,and the moderating effect of welfare regime on the re-lationship between them especially.In this study,OECD social welfare expenditure database(SOCX)and the Comparative Welfare States Data Set(CWS)were integrated into a new panel da-tabase,covering 18 OECD sample welfare states for 27 years from 1990 to 2017.The results indi-cated that welfare state spending on both old and new risks averaged about 26.88 percent of GDP,with the share of policy spending on old risks(18.12 percent)being much higher than the share of spending on new risks(8.76 percent),with the former being more than twice as high as the latter during the last 30 years.The overall average of the post-tax Gini coefficient is 0.3,showing some variation across welfare regimes.More specifically,taking the welfare expenditure data and post-tax Gini coefficient as core proxy variables,panel regression model analysis found that:(1)Under the condition of controlling a series of variables,the proportion of social investment in welfare states has a negative relationship with the post-tax Gini coefficient,which implies that,in a certain sense,an increase in the proportion of policy expenditures on social investment categories would be conducive to the alleviation of income inequality,with a statistically significant result(p<0.05);(2)On the premise of the main effect of the negative relationship between social investment and income inequality,the welfare regime has a moderating effect on the relationship between the two,in which the Conservative welfare regime will strengthens the relationship between the two,while the South Europe and East Asian welfare regime will relieve the relationship between the two.Moreover,these interaction effects are statistically significant for the conservative regime(p<0.1),the Southern European Mediterranean regime(p<0.05)and the East Asian regime(p<0.05).This suggests that welfare regimes still have some theoretical and practical viability for understand-ing the social investment shift reforms of the welfare state and for mitigating income inequality.Under the challenge of old and new risks,countries with different welfare regimes have developed different strategies to harmonize efficiency and equity through social investment reforms.In a broader sense,this results also means that,in the process of modernization and development,in or-der to balance efficiency and equity and achieve common prosperity,it is necessary to pay atten-tion to the institutional environment other than the regional differences,and to achieve the reduc-tion of income inequality through the design of institutions and the coordinated development of so-cial policies.
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