Welfare Performance in Southern Europe: Employment Crisis and Poverty Risk

The Great Recession has had a deep impact on employment levels and on income inequality in the Southern European countries (Greece, Spain, Portugal and Italy). It has given rise to a new stage in the discussion on the distinctiveness of a possible ‘Mediterranean’ variant of welfare capitalism. This paper analyses the performance of the Mediterranean cluster during the Great Recession period in its two main dimensions, labour market participation and poverty risk, and to what extent that performance has evolved in a divergent or convergent manner. Firstly, it portrays the main changes in this variant of welfare capitalism during the last two decades. The second and third sections, respectively, provide a comparative profile of the employment crisis suffered by these countries and of its impact on poverty risks. Finally, the main institutional traits are discussed, explaining the relative performance of welfare capitalism in this cluster of countries.