This paper examines the characteristics of welfare state retrenchment in advanced capitalist countries. After the postwar period of growth and expansion, welfare states now faces economic, social and political challenges. As it is well known, it is argued that changes in population structure and rising unemployment, growing insecurity in the labor market, competition pressures by globalization and technical changes increases the demand on welfare state retrenchment.
Welfare state retrenchment is characterized by three levels: ideological basis, principles of policies and programs, social achievements. First, the main values on the state intervention highly places an emphasis on the individualized responsibility for social reproduction, and the market which are often presented as the most attractive solution to welfare state finances. Second, the crucial principles of social programs become more market-conforming, and shifting toward austerity of benefit. Third, many countries have experienced a considerable increase in income inequality. And they have experienced social exclusion by the increasing numbers of long-term unemployed.
However, there is considerable variation in retrenchment cross countries. Nonetheless, the current welfare state would strengthen the trends of neo-convergence to support pro-market and employment-based approaches to welfare.
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