Continental Western Europe

The chapter analyses the commonalities and transformations of the Bismarckian welfare systems of continental Western Europe. In these systems, social insurance is the primary delivery mechanism, access to benefits is mainly based on work and contribution record, benefits are mainly in cash and calculated as a proportion of past earnings, the biggest share of the financing comes from social contributions paid by employers and employees, and the governance and management of these systems is partly run by collective, compulsory social insurance funds. These features dominate the welfare systems of Germany, France, Belgium, Austria, and, to a lesser degree, the Netherlands. The first part of the chapter focuses on the origins of these systems, the main goals they tried to achieve through their historical development, and the specific principles on which they rely. The second part shows how these systems developed and functioned during their Golden Age, emphasizing their institutional traits and complementarities with certain forms of industrial capitalism. The third part analyses the specificities of the crises these systems are facing, especially the cost of labour. The final part presents the various sequences of welfare reform that have led these systems to adopt structural reforms, especially. The conclusion focuses on the dualization processes that characterize the main changes of Bismarckian welfare systems.