As is true of any detailed, thorough empirical study, our results are complex and general conclusions must be qualified. Yet, the diverse empirical results in our study lend considerable support to our claim that age structure, politics, and development should be taken more seriously in the study of welfare spending and social equality. With the perspective of the empirical analyses behind us, and a roughly defined interest group theory to make sense of the results, we can review these arguments and the evidence in favor of them.

The aged and the welfare state

The major influence on the rise of social welfare spending from 1950 to 1980, at least in political democracies, is age structure – primarily the rise of the aged population but secondarily the decline in the population of young children. This influence stems in part from automatic entitlements for the increasingly larger number of eligible aged persons. As the major program designed specifically for the aged, pensions respond in part to the sheer growth in the number of persons entitled to benefits. Direct demographic forces likewise prove important for medical care spending. The high rates of illness and medical care usage among older persons, and the expensive and difficult care needed for the very old, mean that the aged receive medical care benefits in excess of their representation in the population. Not surprisingly, then, those societies with the most developed welfare states have the world's oldest populations as well.

Current orthodoxy views expansion of the welfare state as the result of conflict between labor (i.e., unions) and capital and the political parties that represent each class. Theorists differ on whether worker or capital interests drive the growth of welfare spending, whether benefits improve the conditions of the poor or the environment for capital accumulation, and whether class-based parties differ in their ability to implement redistributive programs. Still, the unquestioned acceptance of capital and labor as the major actors in the welfare state characterizes the field today. The neo-Marxist, class-based approaches to government, politics, and stratification have replaced the more nonideological, apolitical, and technocratic views common during the 1950s and correctly emphasize conflict, politics, and the power resources of social factions. At the same time, the current literature has come to incorporate politics and the state as crucial components of the welfare state. Whatever the conceptualization of the stratification system and the division of interests within the welfare state, the mechanisms by which classes, groups, and actors influence public policy must include politics and the state. Current efforts by neo-Marxists and others in this regard have improved on earlier technological and class-based functionalist theories that emphasize the automatic response of societies and governments to technological and demographic change or to crises of capital accumulation.

The conventional views, however, may fail to deal with groups crucial to the growth of the welfare state that do not fit the division between labor and capital.

The remarkable growth of explanations and studies of the welfare state has brought about some theoretical disorganization. Scholars often fail to distinguish adequately among the various explanations, use broad terms such as pluralist or neo-Marxist to cover quite different arguments, and gloss over the fact that different theories contain similar arguments. It is well worth the effort to systematize the different theories of the welfare state into a parsimonious yet meaningful scheme that can guide the specification and testing of the hypotheses to follow in the empirical chapters. We begin this effort by making a distinction between demand-based theories, which attend to the externally generated demands of groups and classes for spending, and state-based or supply theories, which consider the characteristics of states that autonomously determine the supply of spending. Concentrating initially on the demand theories, we review the three questions raised at the outset of the book but attach more distinct theoretical labels to the answers and systematically present the theories. We then turn to the state-based theories, laying out their basic arguments and predictions and contrasting them with those of the demand theories.

Demand theories

To review, theories of the welfare state address each of the three questions we discussed in the first chapter. First, does welfare spending respond primarily to class structure and class interests or to economic development and the size of ascriptive groups such as the aged?

The social welfare state has come to play a crucial – perhaps dominant – role in the study of stratification. Social welfare spending is meant to reshape and limit market-based inequality and increasingly mediates how economic structures translate into social equality. The importance of the welfare state is shown not only by the huge amounts of income transferred by governments, or by the heated political debate over its effectiveness, but also by the large number of studies on the topic that exist in the social scientific literature. The fiscal problems experienced by many of the world's high-income democracies have renewed the interest of scholars in the welfare state, led to new theories of its causes and consequences, and placed researchers in the midst of political debates. All this effort and interest has not led to consensus; the politics and ideologies of the welfare state have become more contentious, and the social scientific literature has become increasingly disorganized and fragmented. Behind the bewildering array of arguments, findings, and conclusions, however, lies a set of three interrelated debates that together help to define the approaches taken to understanding the welfare state.

One debate concerns the relative influences of economic-demographic development and class structure as sources of the growth of welfare spending and as bases of group interests and mobilization. On one side, early theories of the welfare state focused on the standardizing effects of spreading industrial technology (Kerr et al., 1964).

The concern of sociologists with income inequality perhaps has overshadowed an equally important component of equality: the provision of basic physical needs of the population and its poor. As much for its own sake, the value of an egalitarian income distribution may come from the ability it gives the poor to improve their physical well-being and quality of life. The way in which income distribution translates into the day-to-day life of a population reflects the dispersion of social rewards and deserves study in its own right.

Although there are many ways to study physical needs, well-being, or the quality of life (Morris, 1979; Estes, 1984), we concentrate on one commonly used indicator – the infant mortality rate. The survival of infants depends strongly on the physical environment in which a child comes to term and is born. It closely reflects nutrition, sanitation, medical care, financial resources, education of the parents, and other aspects of physical well-being. Further, infant mortality is highly responsive to socioeconomic conditions and is more highly concentrated among the poor (Anderson, 1973; Gortmaker, 1979). Indeed, in an important sense, the decline of infant mortality reflects the diffusion of an acceptable standard of living from the elite to the masses and the poor. Because a biological limit appears to exist on how low infant mortality can go, the benefits of a declining rate must eventually extend to the poor.

In this chapter, we consider the consequences of social welfare spending for aspects of social equality involving the distribution of income. Income inequality, conceived as the relative share of income going to different groups in the population, particularly the poorest groups relative to the richest groups, dominates discussions of social equality. Most scholars view low income inequality and low poverty as fair and just, a goal toward which societies should strive. Among large agricultural and industrial societies, none has come close to perfect equality, but some have come further than others.

If agreement exists on the goal, the means to lower inequality is, subject to considerably more debate. More so than in previous decades, strategies of economic growth and direct government income transfer are viewed as mutually exclusive. To the extent that it directs resources away from production and discourages upward mobility, welfare spending may retard the progress toward greater equality coming from economic growth. Alternatively, to the extent that it benefits the upper and middle classes, economic growth may not change inequality unless egalitarian policies redistribute income. Assuming that no contradiction exists between government intervention and economic growth – that they reinforce each other in reducing inequality – blunts the debate somewhat and offers another set of predictions concerning the determination of income dispersion.

Considering the redistributive effect of welfare spending in developing nations further incorporates issues involving the importance of national characteristics, such as economic and demographic structures, relative to external relations in the world system.