Firms and the Welfare State: When, Why, and How Does Social Policy Matter to Employers?

Abstract

Abstract When and why have employers supported the development of institutions of social insurance that provide benefits to workers for various employment‐related risks in the areas of unemployment insurance, accident insurance, and early retirement? This paper challenges the dominant explanations of welfare state development premised on the assumption of business opposition to social insurance. It examines the conditions under which firms support the introduction of a new social policy and specifies the most important variables explaining the variation in the social policy preferences of employers. The model is tested in three episodes of social policy development in Germany, relying on a collection of archival sources and policy documents submitted by business associations to bureaucratic and parliamentary commissions.