Financial crisis and the convergence of European welfare provision

The paper seeks to evaluate whether and to what extent the recent global financial crisis and its economic aftermaths had any impact on the dynamics of the European countries’ national welfare provisions. Relying on the most recent available data on 16 Western countries, covering the period 1990-2013, the analysis examines the behaviour of per capita levels of total social expenditure and its main functions: old age-survivors-incapacity related, labour and healthcare. The empirical analysis reveals the presence of a strong conditional convergence process of per capita total public social expenditure and that devolved to functions attracting most of the social resources. The 2007 financial crisis did not change the old age-survivors-incapacity and labour policies’ convergence trend while it contributed to increase differences among national indicators of total social provision and health sector with the latter presenting a turnaround with respect to the period before the crisis. Healthcare is confirmed to be a less productive sector and therefore the one that most may be cut in presence of resources availability constraints.