Switzerland was long considered a laggard when compared to other welfare states. Based on its expenditures for social welfare purposes, it now ranks in the upper middle range. Among the peculiarities of the Swiss welfare state, one should note the importance of federalism and individual provision, the influence of private facilities and the low share of fiscal means used to finance social security.
It is often difficult to compare different countries with respect to social security, as national systems are often extraordinarily complex. Comparisons utilize differing perspectives: quantitative comparisons focus on social expenditures, qualitative comparisons consider the structural characteristics of welfare states, and historical comparisons look at the special aspects that have shaped a given country’s development. Each of these perspectives has its advantages and disadvantages.
Comparison of Welfare State Expenditures
The quantitative development of social security is often measured using the social expenditure ratio. This is composed of the sum total of expenditures for social insurance (such as pensions from AHV (old age and survivors insurance), IV (disability) or pension funds, need-dependent welfare benefits (supplementary AHV benefits or social assistance benefits) and subsidies (specifically, for hospitals and facilities for people with disabilities) as a ratio of gross domestic product (GDP). According to OECD calculations, Switzerland used 19.6 percent of its GDP for social expenditures in 2015, slightly under the 21 percent average for OECD countries. It therefore ranks close to New Zealand, the Czech Republic, Poland, Slovakia, and the United States. The current ratio of state and social expenditures has remained stable since the 1980s. Prior to this, Switzerland appeared to lag behind, in terms of social expenditures, and was clearly below the European average. High ratios of social expenditures can be found particularly in Germany, Great Britain and Sweden. The Swiss trend in social expenditures in the 20th century resembles that of France or the Netherlands.
Welfare state comparisons based on the social expenditure ratios often provide an incomplete picture, as they long excluded private expenditures on social security. These were, and continue to be, considerably above average in Switzerland, particularly for pension and health funds. It is therefore much more informative to compare net social expenditures, as these also take private expenditures for social security into account. Switzerland has only been included in this OECD database since 2009 and finds itself in the upper middle range in international comparison.
Qualitative Differences between Welfare States
In the social sciences, welfare states are often categorised according to what are thought to be their most typical characteristics. Gosta Esping-Andersen’s typology from the 1990s is particularly influential; it distinguishes between social democratic, conservative, and liberal welfare states. The typology is based on a combination of a value given to expenditures (how much independence from the labour market do social insurance benefits provide?) and a value given to redistribution (how much societal solidarity or redistribution is built into the social security system?). Esping-Andersen assigns Switzerland to the liberal category, since the market plays an important role in its social security systems, even though having a universal old age and survivors’ insurance system (AHV) also reflects aspects typical of the social democratic category, and the asset-preserving unemployment insurance scheme exhibits characteristics found in the conservative welfare state.
The explanatory value of Esping-Andersen’s typology, as well as similar typologies, is, however, rather limited. Esping-Andersen’s model is implicitly coloured by the normative notion that Scandinavian welfare states are further developed than liberal cases such as the USA. Moreover, a typology usually says little about the historical dimensions in the development of a welfare state. The Swiss welfare state, over time, has been influenced by various models and the course of historical development is difficult to encompass using a typology.
Historical and Institutional Characteristics
Taking a longer view can reveal aspects of the institutional and organisational development of social security in Switzerland. Factors particularly relevant to Switzerland include the system of direct democracy and the pronounced form of federalism long practiced in the country.
The instruments of direct democracy have slowed the development of the Swiss welfare state even as they allowed voters to exert direct influence over its basic contours and the course social policy should take. This was the case at the federal level, for instance, when the electorate had to decide whether the legal basis for a new social security system ought to be enshrined in the constitution. The optional referendum was another political tool which allows voters to hold plebiscites on social policy laws already passed by parliament, examples of which include health and accident insurance and old age insurance. Direct democratic tools can also have an accelerating effect, as popular initiatives can serve to initiate, or influence, legislative processes.
The political hurdles to be taken in establishing social insurance schemes often led the Confederation to take detours of a federalist nature. That has meant promoting social policy initiatives suggested by the cantons or from non-state actors, including pension funds and health insurance funds, insurance companies or welfare organisations. Such detours were important, for example, in health insurance or in old age provision with the promotion of pension funds. Once created, these alternative paths of social security reduced the urgency to find national solutions, established by government authorities. The diversity of institutions that resulted out of the detours continued to operate, even once national programmes were created. In turn, non-state solutions or initiatives by subaltern political authorities could also serve as innovative models for the welfare state.
Another characteristic of the Swiss welfare state is the relatively high proportion of direct payments particularly for health insurance. Health insurance reforms in recent decades have tended to expand co-payments by the insured (e.g., out-of-pocket expenditures, as in basic insurance deductibles). Due to insurance premiums and self-payer contributions, policy-holders today bear more than two-thirds of the current costs of health care.
Today, the Swiss welfare state is strongly mobilized (or ‘activated’), as first seen in establishing unemployment insurance. Since the unemployment insurance and public job placement system was reformed in 1994, those who receive unemployment compensations have been held increasingly responsible for finding new work. Both incentives and compulsory measures have been used to encourage the unemployed to re-enter the world of work as soon as possible. Similar mobilization efforts are currently underway for those who receive disability insurance benefits.
Literatur / Bibliographie / Bibliografia / References: Alber Jens (1982), Vom Armenhaus zum Wohlfahrtsstaat. Analysen und Entwicklung der Sozialversicherungen in Westeuropa, Frankfurt a. M.; Obinger Herbert, Armingeon Klaus et al. (2005), Switzerland. The marriage of direct democracy and federalism, in H. Obinger, S. Leibfried et al. (ed.), Federalism and the welfare state: New World and European experiences, 263–306, New York; Schmid Walter (2013), Besonderheiten der Schweizer Sozialpolitik, in A. M. Riedli et al. (ed.), Handbuch Sozialwesen Schweiz, 419-427, Bern.