Economic Strain in Post-Communist Countries and the Rest of Europe: Attitudes Towards the Unemployed and the Old

Introduction

One of the most important debates arising out of the post-communist transition is whether the political dynamics of post-communist countries differ from countries without a communist legacy and thus, whether the various factors explaining attitudes towards welfare policies are comparable across these regions. The approximately forty-year division of Europe into East and West serves as an exceptional opportunity for analysing the differences in attitudes towards the welfare state and their change over time. The historical tradition and the government’s high responsibility for all areas of welfare in post-communist countries may have had a long-standing impact on public opinion. Although the fall of the Iron Curtain took place thirty years ago, the attitudes of citizens in former communist countries may still be affected by their socialist past. Such comparability is also crucial in determining whether post-communist European countries should be treated by social scientists as additional European cases or whether they are too specific and should be treated separately. ¹ Thanks to several large-scale surveys (such as European Social Survey [ESS] or The International Social Survey Programme [ISSP]), there is a wealth of data on attitudes towards the welfare state and researchers focusing on this topic often report varying attitudes within and across post-communist countries compared to countries without a communist legacy. ² Even though literature on the subject has identified these differences in attitudes towards the welfare state, the root cause and nature of the differences between these two regions is not yet clear. Moreover, previous literature has almost exclusively focused on the general concept of the welfare state measured most frequently as income equality, omitting a number of dimensions of the welfare state.

However, welfare state support is not simple, a but multidimensional concept including several types of welfare provisions, each possibly having different support in general, both on the micro and macro level. This article will fill this gap in research and analyse the effect of economic strain on two dimensions of the welfare state—provision to the unemployed and old—and ascertain the specificities and differences of these dimensions. Furthermore, this article will examine the self-interest theory as one of the possible micro-macro explanations for these regional differences with a focus on the effect of economic strain.

Post-Communist Countries and Welfare State Support

Several studies have compared welfare attitudes between the East and the West, with the majority of them concluding that a post-communist legacy is predominantly associated with higher support for the welfare state. ³ The underlying reason why it garners public support may lie in the fact that communist ideology is based on equality and that communist states used to have an especially honed focus on social policies and redistribution. ⁴ Citizens in post-communist countries had relied on the state welfare system for decades and depended on this system for all aspects of their welfare needs: from housing, childcare, and health to pensions. ⁵ In fact, every citizen was entitled to universal free welfare services and, in addition, the state provided large subsidies covering basic needs, while private provision of welfare services was forbidden ⁶ making economic and welfare systems extremely connected.

The fall of communism in Eastern Europe was thus accompanied by the combination of economic decline and weakening of social welfare provisions. ⁷ The exposure of citizens in post-communist countries to this system that closely connected state welfare and economic systems could still be having an effect today. Corneo and Grüner, ⁸ for example, find that individuals in formerly socialist countries generally prefer that the state takes an active role in reducing economic inequality, while it also seems that citizens in post-communist countries hold higher expectations that the state will provide a wide range of welfare services and provisions. ⁹ Similarly, Finley ¹⁰ found on the basis of ISSP 1992–2009 data that Eastern European countries exhibit higher support for redistribution than countries without a communist legacy. Moreover, according to him, there is no convergence over time: even though support for redistribution decreased slightly in the 2000s, it rose again in 2009, proving even higher than in the early years of the transition.

However, there are also some contradictory findings. For example, Olivera ¹¹ analysed data from the ESS, which covered thirty-three European countries and five waves (2002–2010). According to his study, respondents from former communist countries are actually less in favour of income redistribution. Therefore, according to Olivera, ¹² the effects of living in a post-communist country may have weakened over time, resulting in a convergence of attitudes towards the welfare state in Western and Eastern Europe. Moreover, Lipsmeyer and Nordstrom ¹³ have found that welfare state preferences are quite similar when comparing eastern and western attitudes, especially regarding government responsibility for social assistance. Finally, a recent article by Gugushvili and Van Oorschot ¹⁴ argues that in the case of perceived welfare deservingness of the unemployed, it is actually people in the West that exhibit slightly higher support, albeit not statistically significant.

There is also a strand of literature comparing welfare attitudes in East and West Germany after reunification. Even though such research focuses exclusively on one specific country in Europe, it might aid in identifying trends in the differences between post-communist countries and the rest of Europe. The research indeed points towards important differences between the eastern and western parts of Germany; for example, it seems that Germans from the East are more inclined to support redistribution compared to their counterparts in the West, ¹⁵ and that living in former East Germany doubles the odds of espousing positive attitudes towards redistribution compared to living in West Germany. ¹⁶ However, Svallfors ¹⁷ argues that even though there are still differences between East and West Germany regarding attitudes towards state intervention, there is a clear convergence over time. The same finding is presented by Pfarr et al. ¹⁸ who argue that East and West Germans do not differ in their preferences for redistribution after controlling for economic constraints and enforcing trade-offs.

Even though the literature points to differences in the magnitude of support for the welfare state between post-communist European countries and the rest of Europe, it seems that the exact findings largely depend on the specific operationalisation of the welfare state and on the year of analysis. In fact, people in post-communist countries are more supportive in the case of welfare state measured as government responsibility for various services. However, as discussed, this is not the case when welfare state support is measured as government responsibility for the unemployed ¹⁹ as there seems to be no significant differences in welfare attitudes between East and West. These findings turn us in the direction of the literature on the deservingness of allowances, ²⁰ which stresses perception differences in support of specific welfare services. For example, the public is in general much more supportive of the social protection of the elderly in comparison to the unemployed as the elderly are frequently seen as a group that have previously contributed to society whereas the unemployed sometimes tend to be seen as personally responsible for their situation and thus less deserving of government intervention. ²¹ Moreover, there exists widespread scepticism about unemployed people’s proper use of benefits and their willingness to work. ²²

The perception of deservingness is, however, not uniform across countries. There are important differences due to the country-specific norms, history, economic condition and character of the welfare policy in the different welfare regimes. ²³ Post-communist countries, specifically, can be characterised by higher support for government responsibility for the old as the old are seen as the most deserving of social provision. ²⁴ The support for the unemployed is more varied and far less pronounced. ²⁵ It seems that people from post-communist countries are more polarised in their opinions on welfare deservingness of the unemployed compared to their neighbours in the West. ²⁶ This might be due to the negative image of the unemployed presented during communism and the generally lower unemployment rates in post-communist countries. ²⁷ Moreover, no employment benefit scheme existed under communism, as officially these countries had full employment and the unemployed were punished by prison sentences ²⁸ and considered as parasites. ²⁹ Unemployment benefits have been created only after transition ³⁰ and therefore have a much shorter history than in the countries without communist past. These differences in attitudes and perceptions of the different welfare state provisions across regions make a strong case for analysing welfare state attitudes separately, not pooling them into one variable of welfare state support. ³¹

We can expert multiple effects taking place in these relationships. First, citizens in post-communist countries probably support welfare state in general more than their counterparts from countries without a communist legacy. However, the support will differ based on the specific welfare state area. We can expect that due to differences in state support of the unemployed and old and, relatedly, the deservingness perceptions of these two groups, support in the post-communist countries will be lower in with respect to the unemployed than to the old. Moreover, these differences may be more pronounced in post-communist countries compared to countries without a communist legacy.

Self-Interest Theory and the Differences Across Countries

When analysing the effects of different variables that inform public support for the welfare state, one of the most important factors according to the literature is self-interest. The self-interest theory argues that individuals who benefit from welfare provisions are more supportive of the welfare state compared to those who do not receive government support. ³² It is thus expected that certain socio-economic variables have an important influence on attitudes towards the welfare state; such variables include among others most importantly one’s economic situation, education, age, and occupational level. One’s good economic situation in particular is expected to be associated with lower support for the welfare state. ³³

Conversely, when individuals feel that their wellbeing is threatened, they would be more likely to support social policy investments. ³⁴ However, as Beramendi and Rehm ³⁵ argue, the strength of this variable is not consistent across countries even among countries with similar welfare systems. Even though in democracies one’s economic situation almost always has a negative effect on support for redistribution, there is a striking difference in the magnitude of this relationship that is connected to the variables at the country level, especially the progressivity of the country. Moreover, as Dion ³⁶ finds, the strength of this association varies significantly across different regions and countries and hinges on certain variations, including cultural values and previous economic institutions or political systems, such as communism. She notes that such values or legacies might even override the sole effect of self-interest. ³⁷ Unfortunately, the specific reasons for differences in welfare state support across countries are largely overlooked, even though understanding these differences is crucial for the politics of the welfare state, ³⁸ while the variability of welfare state support operationalization does not help this cause.

The existing albeit scant literature focusing on how public support for the welfare state differs between the post-communist countries and the rest of European countries suggests that self-interest, does have an important influence on support for the welfare state. Lipsmeyer and Nordstrom, ³⁹ for example, found that while the self-interest hypothesis holds for both regions, the effect is stronger in Western countries. They also argue that the strength of the relationship between welfare state support and one’s economic situation in post-communist countries changed following the period after the transition; in the early years after the transition, self-interest was not as high a factor, as even people in stable financial situations felt vulnerable to market forces. However, once people eventually adjusted to the new market reality, self-interest factors may have become more important in terms of shaping public support for the welfare state. ⁴⁰ Similarly, Finley ⁴¹ argues that self-interest might not explain the change in support for the welfare state in the early days after the transition, though it may be a more significant factor in the later years. The varying strength of the self-interest effect points to differences in the welfare state support between people in post-communist countries compared to those without a communist past. In relation to the previous research, we can therefore expect that the effect of self-interest will vary between countries with and without a communist past, probably having a stronger effect in post-communist countries.

Data and Methods

Methods

Due the hierarchical nature of the data, similarly oriented research must be conducted using multilevel methods. Multilevel modelling is frequently used in analyses of welfare state attitudes, ⁴⁷ because simple within-country variations are not sufficient to describe the overall variation, requiring differences between countries to be examined as well. ⁴⁸ Multilevel modelling allows for an analysis of the associations with welfare state attitudes while also including variables on multiple levels. ⁴⁹ First, the intraclass correlation (ICC) must be tested to ascertain the proportion of variance that can be attributed to the second level. In the case of insufficient variation, one should consider simple ordinary least squares (OLS) regression instead of multilevel modelling. ⁵⁰ The ICC for the empty model is 9% for the government’s responsibility towards the unemployed and 8.2% for the government’s responsibility towards the old, which justifies the use of multilevel modelling. As a second step, a random-coefficient and random slope model is specified to assess the interaction effect between subjective income and post-communist country on welfare state support. The basic equation for the welfare state attitude models looks as follows, with index i referring to the individual level and index j to the country-wave level:

The data are first subjected to descriptive analysis, examining support for the welfare state and correlations between countries and over time, then multilevel models are employed.

Results

Descriptive Analysis

When taking the pooled data into account, the correlation between support for government responsibility towards the standard of living for the old and the unemployed, regardless of the country of origin, is 0.47. The correlation on a micro level within different countries varies more significantly: the lowest was found in Cyprus (0.23) and the Great Britain (0.3), and the highest in Romania (0.76), Croatia and Italy (both 0.61). This reveals that even though both variables measure welfare state attitudes, they measure different dimensions. In fact, it is not true that people who believe it is the government’s responsibility to ensure a good standard of living for the old, have the same opinion in the case of the unemployed and vice versa. As discussed, combining these variables into an index might thus introduce bias to the results. ⁵¹

As a first descriptive analysis of the relations between economic strain and support for governmental intervention in relation to the old and the unemployed, Figures 1 and 2 show the mean of views of respondents on the two analysed dimensions of welfare state support among those who report economic strain and those who do not report it in each of the countries in our sample.

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Figure 1

Standard of living of the unemployed, government responsibility: economic strain

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Figure 2

Standard of living of the old, government responsibility: economic strain

As the figures show, in agreement with the self-interest theory, economic strain is associated with higher support for a stronger welfare state in the case of standard of living for the old and the unemployed. It is also clear that there is a high variability across countries with visible differences between post-communist countries and the rest of Europe. It seems that in post-communist countries, support for the welfare state differs more significantly between those who do and do not report economic strain. The discrepancy is especially accentuated in Poland and Estonia in the case of governmental support for the old. The descriptive results indicate that the relationship between economic strain and support for welfare state policies is not uniform, but depends on the context of the country, possible hinting at the important effect of self-interest.

Multilevel Analysis

The first descriptive analysis provided an insight into the basic variations in welfare state support between the two regions, revealing that people in post-communist countries do exhibit a slightly higher support for stronger government involvement in the case of the unemployed and old (more in the case of the old), and also that there are larger differences between people reporting economic strain and those who do not with regard to welfare state support in post-communist countries in comparison to the European countries without a communist legacy. However, these aggregated results might be biased as they are limited to the macro level disregarding the micro level variance.

For this reason, we turn to multilevel modelling. Table 1 presents the results of the multilevel analysis. It shows four models in total, two examining welfare attitudes towards the old and two towards the unemployed. Building of multilevel models includes several steps that are all presented in the annex. The first step involves testing an empty model that can be compared to the other tested models in order to better ascertain their added value. Then, individual level variables are added into the random coefficient empty model, followed by a model that introduces slope randomisation. The final models presented in Table 1 focus on the hypotheses: models 1 and 3 test whether living in a communist country influences an individual’s support for strong governmental involvement and models 2 and 4 test the significance of the individual’s financial situation coupled with whether or not they live in a post-communist country, using the random coefficient and slope model. The more complicated models (models 2 and 4) include cross-country interaction exploring the individual level of economic strain and regional background and their relations to attitudes towards the unemployed and old. Each step of the model building is followed by a likelihood-ration test to test the added value of the more complex model. All likelihood-ration tests were significant showing improvement with each additional model.

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Table 1

Multilevel Analysis of Welfare State Support

	Unemployed				Old
	Model 1		Model 2		Model 3		Model 4
	Coefficient	Robust SE	Coefficient	Robust SE	Coefficient	Robust SE	Coefficient	Robust SE
Intercept	7.467*	0.415	7.479***	0.412	9.566***	0.284	9.585***	0.283
Gender (reference = male)	0.079*	0.039	0.078*	0.039	0.007	0.052	0.007	0.052
Age (reference = 65+)
<35	0.019	0.072	0.023	0.072	0.03	0.062	0.034	0.061
35–49	−0.004	0.072	−0.002	0.072	0.091	0.049	0.093	0.049
50–64	0.09	0.061	0.092	0.061	0.154***	0.037	0.154***	0.037
Years of education	−0.022**	0.007	−0.021**	0.007	−0.023***	0.005	−0.023***	0.005
Standard of living of unemployed/old	−0.269***	0.021	−0.269***	0.021	−0.154***	0.010	−0.154***	0.010
Occupation (reference = employed)
Student	0.198**	0.071	0.198**	0.071	−0.018	0.027	−0.017	0.027
Unemployed	0.413***	0.053	0.413***	0.053	−0.039	0.036	−0.039	0.036
Retired, disabled	0.218**	0.064	0.218**	0.064	0.113*	0.048	0.113*	0.048
Housework	0.101	0.063	0.101	0.063	0.124*	0.049	0.125*	0.049
Other	0.197	0.165	0.196	0.165	0.02	0.123	0.02	0.123
Trust in country’s parliament	0.035**	0.011	0.035**	0.011	−0.001	0.008	−0.001	0.008
Misuse of benefits	0.18***	0.030	0.18***	0.030	−0.091***	0.024	−0.091***	0.024
Member of union (ref = union member)	−0.185***	0.044	−0.184***	0.044	−0.169***	0.024	−0.168***	0.024
Economic strain (ref = living comfortably)
Coping on present income	0.077	0.040	0.049	0.030	0.138***	0.031	0.095***	0.025
Difficult on present income	0.259***	0.062	0.169*	0.081	0.224***	0.047	0.159**	0.050
Very difficult on present income	0.469***	0.094	0.309**	0.101	0.401***	0.063	0.292***	0.067
Second level variables
Year	−0.018	0.048	−0.016	0.048	−0.047	0.035	−0.045	0.034
Post-communist country	0.343*	0.168	0.207	0.154	0.625***	0.148	0.462**	0.159
Post-communist country*Subjective income
PC*Coping on present income			0.151	0.104			0.217**	0.071
PC*Difficult on present income			0.305*	0.148			0.265**	0.089
PC*Very difficult on present income			0.441*	0.217			0.348**	0.103
Random effects
Residual variance	4.839***	0.355	4.838***	0.355	3.063***	0.205	3.063***	0.205
Var. random intercept	0.427***	0.079	0.422***	0.077	0.222***	0.038	0.215***	0.036
Coping on present income (ref = living comf.)	0.014***	0.007	0.015***	0.008	0.013***	0.007	0.007***	0.004
Difficult on present income	0.044***	0.016	0.035***	0.012	0.036***	0.009	0.026***	0.007
Very difficult on present income	0.124***	0.111	0.077***	0.295	0.048***	0.023	0.039***	0.024
N (individuals)	83,693		83,693		85,204		85,204
N (countries)	50		50		50		50
AIC	398,336.3		398,321.9		362,769		362,745.8
BIC	398,569.8		398,583.4		363,002.8		363,007.7

Note. AIC = Akaike information criterion; BIC = Bayesian information criterion; PC = Post-communist country.

Source: European Social Survey, rounds 4 and 8, weighted.

*

p < .05. **p < .01. ***p < .001.

In addition to the ICC discussed above, the empty models also show individual-level variance (5.23 in the case of the unemployed and 3.26 in the case of the old) and country-wave level variance (0.46 in the case of the unemployed and 0.26 in the case of the old). This reveals that public opinion is more divided regarding the government’s responsibility for the standard of living for the unemployed than for the old, which is in line with previous research. ⁵² Before discussing the main findings of this analysis, one can observe that support for greater governmental responsibility in the areas of unemployment and the elderly is positively associated with being female, a union member, less educated, individuals who are reporting economic strain, and in the case of support for the unemployed also with trusting the country’s parliament. More vulnerable groups (students, unemployed, retired, disabled, homemakers) are more in favour of government support for the unemployed compared to those who are employed. In the case of the government’s responsibility towards the standard of living for the old it is the retired/disabled and homemakers who are in favour of more governmental responsibility, compared to the employed. Those who believe that the unemployed and the old enjoy a good standard of living are less in favour of government involvement, which is also corroborated by previous research. ⁵³ Finally, those who don’t believe that many misuse benefits (manage to obtain benefits that they are not entitled to) are more in favour of government support for the unemployed, but less in favour in the case of the old. At the country level, the effect of time is not significant in the case of governmental support for the unemployed, meaning that there has been no important change in people’s perception in such support between 2008 and 2016. However, in the case of government support for the old, there is a slight decline in support for governmental responsibility. Regarding regional difference and its effect on attitudes towards the unemployed and old, the multilevel analysis showed as expected that citizens in post-communist countries are more in favour of higher governmental support for the old and unemployed compared to respondents from other European countries.

The cross-level interaction (models 2 and 4) reveals that the effect of economic strain on welfare state support in the case of the unemployed and old is in fact strengthened by the cases in which a respondent is from a post-communist country. Moreover, this relationship is stronger in the case of respondents experiencing higher levels of economic strain in comparison to wealthier ones. With all other variables kept constant, the models reveal very important within-group differences among people in post-communist countries pertaining to economic strain. Compared to countries without a communist past, post-communist countries exhibit higher disparities in welfare support between citizens who are experiencing economic strain and those who are not in both examined domains of the welfare state—government responsibility towards the standard of living for the old and the unemployed, which is in line with hypothesis 1.

The differences in welfare support between the old and the unemployed show that support for provisions for the old is generally higher than support for provisions for the unemployed, which is not surprising and is in line with previous research. However, the results clearly show that there are important differences in support for the two types of welfare provisions between post-communist countries and countries without a communist history. Even though in general people from post-communist countries support both welfare provisions more, the disparity is much more pronounced in the case of the elderly.

An illustrative visualisation of such disparities is presented in the margins plot below (Figure 3). The graphs depict predictive margins of the multilevel results divided by region—post-communist countries versus the rest of Europe. Individuals experiencing economic strain in post-communist countries are significantly more inclined towards government responsibility for their standard of living than their counterparts in countries without a communist history. Conversely, people not reporting economic strain in post-communist countries exhibit similar preferences as their neighbours in the West. The results show that the self-interest inclination appears to be more salient in post-communist countries than in the rest of Europe, since the interaction slopes are steeper, therefore showing larger differences between the opinions of individuals divided by their reported level of economic strain.

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Figure 3

The marginal effect of economic strain, divided by region

Similarly, the figure shows that the differences of opinion between people from post-communist countries in regard to the unemployed and old are important. In the case of the unemployed, the opinions of people not reporting economic strain are almost identical in post-communist countries and in the rest of Europe. The main difference between these two regions is among people suffering from economic strain. In the case of governmental support towards the old, people in post-communist countries show higher support for government provisions. This supports hypothesis 2: in general, people in post-communist countries are more supportive of the welfare state, however, they are less likely to support provisions towards the unemployed in comparison to the old. This is probably due to the communist history, as unemployment benefits are a newly established type of provision introduced after the democratic transformation and thus suffering from lower support in comparison to people in countries where unemployment benefits have a longer history.

Conclusion

A substantial literature has examined the relations between support for welfare policies and self-interest variables; however, only few have focused on the effect of communism on such relations. Moreover, even though previous research showed that post-communist countries exhibit greater support for the welfare state, the differences between specific types of welfare provisions have largely been overlooked. This article aimed to fill this gap by analysing relations between welfare state support operationalised as attitudes towards governmental responsibility for the standard of living of the unemployed and the old and self-interest measured as economic strain in thirty-one European countries. Working with a multilevel approach, this article has examined the extent to which this relation is moderated by a country’s communist legacy while controlling for a number of variables at the individual and country level. The results provide consistent evidence that being from a post-communist country significantly informs an individual’s support for the welfare state measured as governmental support for the old and unemployed; moreover, such an effect is strengthened and moderated by the individual’s economic strain. The results reveal significant differences between the East and West that are informed by two distinct effects.

First, the results show that citizens of post-communist countries are indeed more supportive of the welfare state, however, especially in the case of government provisions for the unemployed, the regional differences are not as strong. This shows that the communist legacy does still have an effect today, but this influence differs according to the welfare provision in question. In the case of governmental provisions for the old, the regional differences are more pronounced, which points towards the theory that post-communist citizens are more used to relying on the government in the case of welfare support. ⁵⁴ On the other hand, regional differences in the case of support for the unemployed exist, but they are not as strong, especially with regard to citizens who do not report economic strain, whose preferences are quiet similar across regions. This supports the findings by Gugushvili and Van Oorschot ⁵⁵ who found only small differences between East and West in regard to attitudes supporting governmental provisions towards the unemployed.

Second, considering the variations in levels of economic strain across respondents in these two regions points towards the varied effect of self-interest. Even though self-interest has a demonstrable effect on welfare state perceptions in both of the regions studied, the magnitude of the association is much greater in post-communist countries. Specifically, even though people not experiencing economic strain are less supportive of governmental provisions for both the unemployed and the old compared to their less fortunate counterparts, the difference between East and West is much more pronounced in the case of respondents reporting economic strain. In fact, the important difference can be found among the less affluent respondents who are much more supportive of governmental provision in the East than in the West. These results suggest that self-interest measured as economic strain is thus more important in post-communist countries. These findings support the conclusions by Gugushvili and Van Oorschot ⁵⁶ who claim that in the case of welfare attitudes towards the unemployed, people in Eastern countries are significantly more polarised than their counterparts in the West. However, thanks to multilevel methods, this article showed that the polarisation is particularly pronounced in the case of respondents reporting economic strain in the post-communist countries as opposed to the ones who do not report high levels of economic strain, who are closer in their attitudes to the western neighbours. The analysis showed that the differences between welfare state support in post-communist countries and the rest of Europe are not as simple as presented in the previous literature. In fact, the real reason behind the differences in welfare attitudes between post-communist countries and the rest of Europe might not be the communist legacy alone, as there are rather small differences between the citizens not reporting economic strain in these two regions. The real difference is between the citizens experiencing economic strain which points to the more important effect of the self-interest factor in the post-communist countries. This may be the result of the overall worse economic situation of the citizens in the East reporting economic strain, who might feel more uncertain of their future than do poorer citizens in the West. Different economic status is thus translated into higher support for governmental provisions for the unemployed and old.

Moreover, the analysis shows important differences between the two types of welfare provisions measured in this article—governmental support for the unemployed and the old. In fact, there are perceptible differences not only in the general support of the public but also between the studied regions. This shows the need to treat welfare state support as a multidimensional concept.

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