Welfare reform

Welfare reforms are changes in the operation of a given welfare system aimed at improving the efficiency, equity, and administration of government assistance programs. Reform programs may have a various aims; sometimes the focus is on reducing or increasing the welfare state and at other times reforms may aim to ensure greater fairness and effectiveness at the same total welfare spending. Classical liberals, neoliberals, right-wing libertarians, and conservatives generally criticize welfare and other tax-funded services for reducing incentives to work, exacerbating the free-rider problem and redistribution. On the other hand, in their criticism of capitalism, both social democrats and other socialists generally criticize welfare reforms that minimize the public safety net and strengthen the capitalist economic system. Welfare reform is constantly debated because of the varying opinions on a government's need to balance providing guaranteed welfare benefits and promoting self-sufficiency. From the 1970s, welfare systems came under greater scrutiny around the world. Demographic changes such as the post-war "baby boom" and the subsequent "baby bust", coupled with economic shifts such as the 1970 oil shocks, led to aging populations, a dwindling workforce, and increased dependency on social welfare systems, which inevitably brought up the issue of welfare reform. U.S. systems primarily focused on reducing poor single parents' need for welfare assistance through employment incentives. The United Kingdom focused primarily on reducing general unemployment through the New Deal introduced by the New Labour government in the 1990s. The Netherlands emphasized reforming disability programs, and Latin America focused primarily on pension reforms.

History

Many historians trace the beginnings of contemporary welfare in Europe and America to Germany's health insurance laws introduced in the late 19th century. German Chancellor Otto von Bismarck introduced government healthcare and approved the 1883 Health Insurance Act, which was the first to introduce compulsory government-monitored health insurance. The German legislation ensured contributory retirement and disability benefits. Participation became mandatory.

By country

United States In the United States, the Great Depression led to President Franklin D. Roosevelt's introduction of the Aid to Families with Dependent Children (AFDC) program and the Social Security Program through the Social Security Act, which created a public welfare system to provide assistance to various dependent persons in need. In 1964, President Lyndon B. Johnson introduced pieces of legislation collectively known as the War on Poverty in response to a persistently high poverty rate of approximately 20%. This initiative funded welfare programs such as Social Security, Food Stamps, Job Corps, and Head Start. The war on poverty included new federal programs such as Medicare and Medicaid, which provided seniors, low-income individuals, and other disadvantaged groups with health insurance. Furthermore, the U.S. Government began providing direct assistance to school districts, passed sweeping environmental protections, instituted urban renewal projects, furthered civil rights protections, and expanded funding for the arts and humanities.

… excerpt ends here. Continue reading the full article.