The Financialization of Welfare States. the Case of Complementary Social Insurances

The process of financialization of capitalist economies has recently interested many welfare states. The reforms of the social protection introduced in the latest two decades have given greater importance to the role of the financial sector as a welfare provider. An increasing number of families rely on the revenues of their financial investments to get those social services previously provided by state authorities. A paradigmatic example is given by the several complementary insurance schemes increasingly diffused in several Western and developing countries. Their introduction was generally supported by governments and labour unions that believe the financial sector may provide workers those economic resources that current welfare states find difficult to guarantee. However the process of financialization of welfare states could enlarge the already existing income inequalities, strengthen the increasing social stratification, and intensify the process of dualization of the social protection that is interesting many welfare states.

This paper will present a comparative investigation of the diffusion of private complementary social insurance schemes in France, Sweden, and the UK after the onset of the latest economic crisis. It will discuss the political debate about their introduction. Then it will evaluate their likely impact on the process of segmentation of the social protection. Finally it will broaden the conclusions drawn from the case studies previously considered to other developed and developing countries.