Coronavirus has brought the welfare state back, and it might be here to stay
With Covid-19 posing a universal risk, most voters could demand social insurance payments that are significantly more generous than before the crisis hit.
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GOVERNMENTS across the developed world have responded to the Covid-19 crisis by making welfare states vastly more generous. Historical parallels suggest that this munificence may endure even as the pandemic recedes.
Welfare states will only, however, become permanently more generous if voters believe this pandemic poses an enduring risk to their incomes and if they make common cause with the people who have been worst affected.
The most pertinent historical parallel to the current situation is World War II. After the conflict, governments dramatically increased both the number of people covered by the welfare state and the value of the payments they received. At that time, people were demanding greater social insurance in the face of universal risks and pervasive uncertainty. The late 1970s marked the end of this golden era. Technological advances, demographic change and globalisation led to increased fiscal pressures and cuts to the generosity of modern welfare states.
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