The political economy of minimum income benefits: How parties, unions and migration influence benefit adequacy

Abstract

How we treat the people most in need of support is a good indicator of the state of our societies. But we lack empirical evidence on how political parties affect minimum income benefits. The classic partisan difference theory leads us to expect opposite effects of governing right and left parties on benefit levels. The analysis of 16 OECD countries over the period of 1990 to 2009 shows that this hypothesis must be rejected as – if anything – right and left parties are associated with cuts. The inconsistent party effects point towards ‘new politics’ of blame avoidance strategies. A novel approach in the field of minimum income benefits is the analysis of the context of partisanship: how do unions and migration alter governments’ effects on benefits? The effect of migration on parties cannot be captured using the net migration rate; in the future we should look at how public opinion on migration influences policies. In line with the power resources approach, trade unions show a consistently strong association with higher benefits, but they cannot constrain right nor left parties in cutting benefits. The findings confirm that the politics of new social policies differ from the politics of old ones: (1) new politics are at work, (2) signs of negotiated retrenchment between unions and right governments are not robust and (3) no evidence of coalition building between left parties and unions was found.