During the first decades of the postwar period, all Western countries managed to strongly increase the generosity of social programs aimed at providing social care and protection against risk and ill fortune. At the same time, they did so in very different ways and – as a result – to a very different extent. Modern welfare states can be classified in a variety of ways, but most scholars would probably agree that the most salient distinction lies in the extent to which they are able to provide adequate social care and security against labor market risks for all members of society, including the least privileged. This distinction has occupied a central role in the scholarship on the political economy of the rich democracies for at least four decades. Today, this scholarship no longer finds it difficult to explain why overall levels of care and protection have at some point in time, and more so in some countries than in others, come to surpass the degree that is functionally required for modern economies to perform optimally. Yet it continues to struggle with the question of why they have taken on a much more equitable and solidaristic form in some countries compared with others. In other words, it remains unclear why some countries have managed to create relatively inclusive welfare states while citizens’ ability to obtain adequate levels of social care and protection in other countries continued to much more strongly depend on their position on the labor market.

While scholarly views of the development of social care and protection programs in the latter group of countries are – as we will see below – by no means without their problems, their more limited nature does make it easier to explain them. Compared to more inclusive welfare regimes, the welfare systems in these countries tend to allow for less overall risk collectivization and horizontal redistribution over the life span. Often – but not always – they also strongly rely on private forms of welfare provision. However, their defining feature is that they do little to alter the distribution of labor market income or spread the risk of contingencies among social groups that differ in their exposure to major labor market risks such as disability, sickness, and unemployment.