Welfare reform

Welfare reforms are changes in the operation of a given welfare system aimed at improving the efficiency, equity, and administration of government assistance programs. Reform programs may have a various aims; sometimes the focus is on reducing the number of individuals receiving government assistance and welfare system expenditure, and at other times reforms may aim to ensure greater fairness, effectiveness, and allocation of welfare for those in need. Classical liberals, neoliberals, right-wing libertarians, and conservatives generally argue that welfare and other tax-funded services reduce incentives to work, exacerbate the free-rider problem, and intensify poverty. On the other hand, in their criticism of capitalism, both social democrats and other socialists generally criticize welfare reforms that minimize the public safety net and strengthens the capitalist economic system. Welfare reform is constantly debated because of the varying opinions on a government's need to balance providing guaranteed welfare benefits and promoting self-sufficiency.

From the 1970s, welfare systems came under greater scrutiny around the world. Demographic changes such as the post-war "baby boom" and the subsequent "baby bust", coupled with economic shifts such as the 1970 oil shocks, led to aging populations, a dwindling workforce, and increased dependency on social welfare systems, which inevitably brought up the issue of welfare reform. U.S. systems primarily focused on reducing poor single parents' need for welfare assistance through employment incentives. The United Kingdom focused primarily on reducing general unemployment through the New Deal introduced by the New Labour government in the 1990s. The Netherlands emphasized reforming disability programs, and Latin America focused primarily on pension reforms.