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Keywords:

  • social security financing;
  • social security policy;
  • contributions;
  • economic recession;
  • EU countries

Abstract.

This article assesses how well welfare models with different financing mechanisms cope with a major financial crisis. It focuses on five EU countries, which represent different welfare models. It also analyses how the crisis and the associated stimulus or austerity measures changed financing, revealing a regressive impact. It demonstrates that, in the short- or medium-term, contribution-based social systems have more stable public finances during a recession than tax-based systems. That said, the corporatist/continental welfare model seems most likely to remain stable in the long run, in so far as it focuses on keeping employment – the system's main source of revenue – stable.