Welfare state refers to a country in which the government provides for the essential needs and economic security of its citizens. The term is usually applied to countries that have basically capitalistic economic systems but also maintain government programs to reduce poverty. Governments of welfare states may furnish retirement income, medical care, housing, child care, unemployment benefits, and other forms of support. Such services are often called social welfare programs.
The term welfare state was not widely used until the mid-1900’s. However, the general concept emerged in Europe during the 1800’s. The idea gained support as an alternative to laissez faire economic policies, in which the government avoided interfering with economic matters. Critics of laissez faire capitalism argued that the government should address economic needs through government-run social programs.
During the Great Depression of the 1930’s, poverty and unemployment increased throughout the world. Many countries, including the United States and Canada, responded by expanding existing welfare programs and creating new ones. After World War II (1939-1945), governments in Western Europe continued to expand welfare as a means of addressing social issues related to industrialization and urbanization. The social welfare programs of the United Kingdom, Sweden, and Norway grew so large that these nations became known as welfare states. Expansion of welfare state systems later spread to other parts of the world.
Welfare states differ in the types of services they offer and in the level of support they provide. The United States has a number of government programs that benefit retired workers, people in need, and other groups. But its welfare state programs are not as extensive as those in many other countries. In Sweden, for instance, the government provides retirement income, unemployment insurance, and largely free medical care for all of its citizens. Such comprehensive welfare states, however, are difficult to maintain. Even though social programs help poor populations, some economists argue that high levels of welfare spending hinder economic growth and create a burden on the government. Many countries face challenges in balancing the need for economic growth with the demand for social welfare programs.
