Social Security Systems in the Netherlands

2315 Words10 Pages
From decades social security policies are in question all across the Europe. Moreover, the future expectations of changes in the social security systems due to the variations in household structures and ageing of the society bear new social security systems. As most of the European countries the Netherlands, had a substantial growth in the 1960s. After the oil crises, the economy of the Netherlands worsened. Despite the successful creation of a large number of new jobs in the 1980s the growth of unemployment continued and remained persistent in character and still today. However, the social security system in the Netherlands is not alike to the 1970s and 1980s. The Dutch government expenditure on social benefits is characteristic of the well-developed welfare states - at 27.4 percent it is now above the EU average of 22.9 percent. It is among the high taxation countries and over average GDP per capita. Public employment is low and it has one of the lowest poverty rates. The extraordinary level of economic growth of the 1960s created the economic surplus in the Netherlands but by the world’s two oil crisis in the early 1970s the economic climate started to deteriorate. A stunning increase of unemployment in the late 1970s provoked a policy of labor cost reduction and cuts in the social security budget. It was believed that an increase in the real wages and social benefits would imply a further rise of unemployment. Moreover, it was predetermined by the government that the country could only recover from the economic downfall of the 1970s if free entrepreneurship and the functioning of market mechanisms would be restored. Gradually social policy lost its position as a more or less independent domain. It became the servant of economic policy as it was strongly believed that once the aim of a healthy economy was reached, social and economic deprivation would consequently vanish. In the 1980s the reduction of public expenditures became a keystone of Dutch socio-economic policy, partly to decrease a growing budgetary deficit of the state, partly to reduce the costs of labor as many social insurances were paid for by employers’ and employees’ contributions. As a result the levels of social security benefits like social assistance, unemployment and disability benefits were significantly lowered, while at the same time the definitions as to the eligibility for these benefits were reduced. Moreover, the Dutch social security system offered too few incentives for the non-active part of the labor force to participate in the market.
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