International Journal of Business and Management Study
Author(s) : MAGDALENA KOTYNKOVA
During the second half of the 20th century there have been significant changes in the structure and concept of the welfare state in Europe, mainly due to the changes in labour market and demographic changes. This was accompanied by a multiple increase in public expenditure in the social sector and the welfare state has found itself in a crisis since the 90s of the last century. Given the fiscal unsustainability of the current social systems, measures and reforms addressing the fiscal crisis of the welfare state are being introduced. The current keynote is to narrow down the role of the state to the provider of basic social protection and encourage the citizens towards more responsible behaviour. The aim of this paper is to assess the dynamics of current social expenditure of the EU member countries in the light of the ongoing changes in the labour market and identify the fiscal trend. It emerged that a significant change affecting the need for the transformation of the welfare state is the increasing natural unemployment rate. People threatened by the unemployment, especially by the long term unemployment and job insecurity become dependant on social benefits and do not adequately contribute to the social system used to finance the benefits. The paper is mainly centred around the opinions of leading European experts on welfare states, EU strategic documents and Eurostat and OECD statistics.