Expansion and Consolidation of the Welfare State

The Swiss welfare state remained weak and fragmented until the Second World War. A phase of gradual improvement began only with the introduction of the AHV in 1948. Despite new social insurance provision, benefits continued to pale in comparison with schemes in other countries for a long time.

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Social insurance remained relatively underdeveloped until the Second World War. Real socio-political change only came after the outbreak of war. In 1931, a first attempt to introduce the public AHV had failed due to federalist concerns regarding centralized public institutions. Conversely, private provision enjoyed an upswing in the interwar period.

The decades following 1945 were characterized by the successive introduction of new insurance branches and mandatory schemes: the AHV (1948), disability insurance (IV, 1960), income-tested supplementary benefits (EL, 1966), unemployment insurance (ALV, 1976) and occupational old age provision (BVG. 1985). There were also reforms in social assistance. Between 1950 and 1990, the social expenditure ratio (a quotient comparing social insurance expenditures with the gross domestic product) also rose significantly. This ratio provides insight into the relative importance of social insurance expenditures in relation to economic activity. The ratio stood at ten percent in 1950; in 1973 it had reached 15 percent and 21 percent by 1990.

Initially, the welfare state was developed against the backdrop of post-war prosperity with high growth rates, rising wages, full employment and expanding government activity. This growth period faltered in the mid-1970s, while the period leading up to 1990 was characterized by fluctuating economic performance. It was during these decades that growing concern about the further expansion of the welfare state took hold among bourgeois parties, as well as business and small employers' associations. Consolidation and selective reforms to the existing welfare system thus came to the fore.

Despite the singular period of expansion, social security in Switzerland remained patchy for a long time. Compared to other industrialized countries, the social expenditure ratio remained rather low until 1990. Well until the 1970s, social insurance schemes remained minimal, for example in the domain of unemployment. There was still no mandatory health insurance; the introduction of maternity insurance and family allowances was delayed for decades, although they had been approved in principle in 1945.

Literatur / Bibliographie / Bibliografia / References: Studer Brigitte (2012), Ökonomien der sozialen Sicherheit, in P. Halbeisen, M. Müller, B. Veyrasset (ed.), Wirtschaftsgeschichte der Schweiz im 19. Jahrhundert, 923–974, Basel.