Project Description

In relation to Iceland’s presidency of the Nordic Council in 2014 a number of three-year research projects were initiated. One of these is a project aiming to draw lessons from present and past experiences of financial crises on welfare and well-being of the affected nations (Welfare and Nordic Crisis Management Strategies), led by prof. Stefán Ólafsson of the University of Iceland. The focus of this project is on policy reactions to the crises and how successful or unsuccessful they were, particularly with reference to how well and quickly the nations recovered from the crisis condition and also how the welfare and well-being of nationals were affected by the crisis itself and the policy measures aimed at tackling the crisis.

While the macro-economic and socio-political contexts are of great relevance the main focus will be on crisis amelioration measures and how these impacted on the level of living of the general public, including on different socio-economic groups. Hence the issues will directly tackle distributional effects of the crisis and the policy reactions, as well as the policies’ effectiveness in lifting the relevant economies and societies out of the crisis condition. The issues will cover how the social protection system and the labour market environment were used –and not used– to tackle the crisis and its consequences. Welfare and social protection expenditures or austerity measures (how limited resources were used), distributional aspects (how the burdens were shared out), employment creation, activation and rehabilitation, taxation and other redistribution measures will thus feature highly in the accounts.

The main focus is on how the Nordic countries weathered the present financial crisis as well as the crises of the late 1980s to early 1990s (particularly deep in Finland, Sweden and the Faroe Islands), in an intra-Nordic comparative framework. The project will also compare the Nordic crisis management strategies with policy reactions in other Western countries that were deeply affected by the present financial crisis, in order to establish to what extent the Nordic crisis strategies were different or not.

The project is organized as a book project, consisting of individual chapters on selected countries and country groupings, and cross-national empirical and analytical chapters, with an orienting introduction and a concluding chapter summarizing and analyzing the outcomes in a wider context.

 Book project – provisional structure:

  1. Introduction
    • The Great Recession and the 1990s crises – empirical profile of depth and breath of crisis across western democracies. Theories of the welfare state. The role of the welfare state and its importance during periods of crises. Key policy debates: Austerity vs stimulus, mixed approaches etc.
    • Research question(s) of project, issue areas covered and thematic focus
    • Selection of cases and data sources, and methodological approaches
  2. Theories of social policy responses to economic crises
    • Literature review of previous work on determinants of government social policy responses to economic crisis.
    • Analytical framework developed to guide the analysis in case study chapters. Retrenchment vs. Expansion. Targeting vs. broad-based. Reactive vs. Proactive etc.
  3. Case studies 

  4. Denmark (2008-)
  5. Finland (1990s; 2008-)
  6. Iceland (2008-)
  7. Norway (1990s; 2008-)
  8. Sweden (1990s; 2008-)
  9. Ireland and UK (2008-)
  10. Spain, Portugal, and Greece (2008-)
  11. Baltics (2008-)
  12. Crosscutting and thematic chapters

  13. Well-being during the crisis and beyond
    • Empirical profiles of individual and household well-being developments during the crisis from 2008 to 2014 (mainly EU-SILC and OECD data).
    • How did the general population fare across countries? Poverty, unemployment, economic insecurity, debt, arrears, consumption etc.
    • How were particular groups affected by the crisis? Youth, women, minorities, the elderly, the poor, low skilled workers etc.
  14. Typology of social policy responses
    • Compare and contrast results of case studies and statistical profiles. To what extent is there a coherent cross-national structure to policy responses? Is there a Nordic model of crisis management?
    • Do systematic factors affect policy responses? (welfare regime; crisis depth; government partisanship; economic development; policy traditions; LMEs vs CMEs etc.)
  15. Policies and Well-being: What works?
    • Qualitative discussion of specific policies and their effectiveness
    • Quantitative analysis of the determinants of well-being developments across countries.
  16. Conclusions (summary, context and lessons)
    • Summary of main findings.
    • What lessons can be drawn from the case studies and the effects of policy choices on well-being.
    • What are the future implications of the crisis and policy response on the welfare state and well-being?

The case studies form an integral part of the project and allow for a deeper analysis of particular policies and policy mixes and their effects on the well-being of the general public. The case studies should set the individual country situations at the start of the crisis in context, as well as the specifics of how the crisis was felt throughout society. The main focus of each case study, however, should be on particular policy choices (or non-choices) made by governments and other political actors. The broad contours of the crisis management strategy should be laid out, followed by a deeper analysis of individual policies and their effects. The case studies should also assess to what extent the crisis led to fundamental structural changes in the welfare state and labour market environments, as well as in the political environment (changing fate of parties, trust developments etc.).

Each country case study should be a maximum of 6,000 words. The following is a provisional list of issues that the case studies could cover. The list is suggestive rather than complete and country-specific conditions and contexts (author’s evaluations) should determine the selection of most relevant issues.

  • Political economy context in the lead up to the crisis
    • Economic conditions and state of public finances
    • Rights and welfare state regime
    • Political policy environment (government composition, labour market partners role and corporatist policy making; policy traditions)
    • Other relevant macroeconomic and societal conditions
  • Characteristics and severity of crisis
    • Timing and duration of crisis
    • Severity of crisis (magnitude of GDP change, bank bailouts etc.)
    • Distributional consequences (specific regions, sectors, industries etc. hit hard)
    • Immediate effect on government finances, unemployment, inflation
  • Government crisis strategy
    • Stimulus, austerity or mixed approach
    • Targeted approach or across the board expansion/cuts
    • Same approach throughout crisis or evolving?
    • Fundamental or incremental response
    • Balance of automatic stabilizers and discretionary policymaking
    • Social protection system actively used or not to counter crisis situation
    • Social investment focus or not
    • Constraints due to external factors (e.g. Euro, IMF, ECB)
    • Conflictual policymaking or social dialogue
    • The fate of European and Nordic Social Models during the crisis
  • Benefit and taxation developments
    • Expenditures on cash as well as in-kind benefits
    • Pension reforms (old age and disability; entitlements and generosity)
    • Minimum pension guarantees/minimum income provisions
    • Unemployment benefits and rights
    • Other benefits (child and family benefits, Social Assistance etc.)
    • Conditionality developments; more targeting; changed indexing etc.
    • Changes in distribution of incomes, tax burden and benefits
    • Structural tax changes during the crisis
  • Employment developments
    • Contraction of employment participation and unemployment
    • Main groups affected
    • Job creation and developments on the upswing
    • Extent of emigration
  • Activation and rehabilitation
    • Extent and characteristics
    • Expenditures and participation
    • Outcomes and effectiveness
  • Labour market policies
    • Extent of social partners’ influences on policies and developments
    • Coordination and policy pacts
    • Bargaining developments, flexibility, competitiveness
    • Workers’ rights and work conditions developments
    • Wage bargaining
    • Freezes, internal devaluations, price developments
  • Housing and household debt situation
    • Provisions and housing market situation
    • Household debt developments
    • Debt relief measures
    • Subsidies for mortgage or rent payments
  • Poverty, financial hardships and material deprivation developments
    • Relative and absolute
    • Deprivation and hardships
  • Informal economy strategies
  • Gendered effects of crisis

In addition to addressing such issues, each case study should include main elements of a timeline/summary of major policy initiatives and legislation pertaining to crisis amelioration during the period under study. The research team in Iceland has collected profiles of timelines of policy reactions for individual countries, which will be shared.

The project team will consist of three individuals in Iceland (including two co-investigators, dr. Agnar Freyr Helgason and dr. Kolbeinn Stefánsson, who will have full access to the whole set of EU-SILC data for 2005-2013/2014 period, as well as other relevant data). In addition we will recruit individual representatives from each of the other Nordic countries to be in charge of writing a case study on their respective country. We will also recruit specialists to write about a few deep crisis countries in Europe, such as Ireland, UK, Spain, Portugal, Greece, and the Baltic States.

The specialists who will join the project will have access to the co-investigators in Iceland and all the data that will be accumulated there, including special runs on EU-SILC etc. for their respective country. The project will also make some use of reports and data from the EC’s European Social Policy Network (ESPN) and its predecessors (Social Inclusion Network and ASISP Network) and various relevant and recent literatures.

General time framework:

  • Country case studies should preferably be ready by spring of 2016.
  • Workshop for participants will be organized in Iceland in early summer of 2016.
  • Manuscript sent to international publishers during winter of 2016-2017.

Project Description

Updated on 2015-12-09T09:53:59+00:00, by Agnar Freyr Helgason.