Lib-Lab Coalitions, Christian
Democracy or Liberal Hegemony?
The Political Origins of the Swiss
Welfare State on the Cantonal Level
André Walter
February 19, 2016
Abstract
I. Introduction
Esping-Andersen’s three worlds typology has provided an important framework for the the comparative study of welfare state regimes. According to
Esping-Andersen, welfare states in the OECD can be assigned to three distinct
regime types. In addition, the three types reflect the political coalitions that
have been in government since the postwar period. Much of the subsequent
research has used the typology as a starting point to engage in the study of
social policy development (cf. Emmenegger et al., 2015). However, a number scholars forwarded alternative typologies to address the shortcomings of
Esping-Andersen’s regime classification (Ferrera, 1996; Bonoli, 1997; Korpi and
Palme, 1998). Despite their differences with regard to conceptualization and
measurement, most countries were assigned to the same clusters across classifications (Ferragina and Seeleib-Kaiser, 2011).
Yet, some countries appear to be notoriously difficult to classify. Besides
Netherlands, Switzerland proved to be sensitive to the selection of indicators
with regard to different regime typologies. According to the majority of classifications, Switzerland is characterized as a liberal or Bismarckian-conservative
welfare state (Arts and Gelissen, 2002). Scholars of the Swiss welfare state
1
echoed the ”problematic” nature of the social policy setup. Given the idiosyncratic institutional structure of federalism and direct democracy as well as the
strength of right wing parties in the federal government, it is argued that
Switzerland is an exceptional laggard with regard to timing of social policy
introduction as well as level of social expenditure. (Obinger, 1998a; Armingeon, 2001).
In this paper, I claim that welfare state development in Switzerland is less
exceptional than previous research suggests. More specifically, I make two
arguments. First, existing research neglects social policy making on the cantonal level which is essential to understand the setup of the Swiss welfare state.
Even though Pierson (1995) emphasized that the question of ”who should do
it” is of utmost importance for social policy in federal states, no study of the
Swiss welfare state investigated social policy development on the subnational
level in detail. In contrast, I show that if cantonal social policies are taken into
account, the characterization of Switzerland as an exceptional case becomes
largely unjustified. More precisely, I show that existing theories of the comparative welfare state literature help to understand social policy development on
the cantonal level. Even thought the effects of parties vary among the policy
fields, social policies were earlier adopted in cantons with dominance of the
radical parties as well as in catholic cantons with a strong left in the catholic
party.
To support my arguments, I investigate the introduction of compulsory family
allowance as well as health and unemployment insurance laws in the cantons.
According to previous research, these social policies are the core programs that
constituted the welfare state (Hicks et al., 1995; Obinger, 1998b). To do so, I
created a new data set of political and socio-economic variables for the period
1914-1965. To determine the impact of a number of factors on the timing of
social policy development, I employ event history analysis with an estimator
for small sample correction.
The article is structured as follows: In the first section, I map the development of social policies and outline my argument about the political forces that
drove welfare state development on the cantonal level. Then I discuss alternative approaches to welfare state development in the section section. After
that, I present the data as well as the method in the third section. In the fourth
section, I present and discuss the results.
II. The Argument
In this paper, I present two arguments that build on one another. First, I argue
that previous research paints only an incomplete picture of welfare state de-
2
velopment in federalist polities. More specifically, scholars have investigated
social policy legislation on the national level while paying almost no attention
to the development on the sub-national level. As a result, the dynamics of
welfare state development in federalist countries are not well understood. I
use the example of social policies in the Swiss cantons to show that the timing
of the introduction of several social programs does not differ much from the
OECD average.
Second, I argue that the Swiss case is less exceptional in terms of party effects
on social policy development. According to previous accounts, the development of the Swiss welfare state is strongly influenced by the structure of the
political system. In contrast, I show that political parties are the decisive factor
that determined the timing of the legislation of social policies in the cantons.
More specifically, the ideological shift of radical party to the left in the interwar
period as well as the reaction of catholic party to these new social programs
can best account for the social policy dynamics on the cantonal level. I am
going to describe the argument more in detail in the following.
II.I. Social Policy Making in Federalist States
A large literature emphasized the retarding effect of federalism and, in some
countries, direct democracy on the development of social policies on the national level. According to the literature, the vertical and horizontal dispersion
of political authority among the federal government and its constituency units
is seen as major obstacle for a generous welfare state. More specifically, the
competition between constituency units and the mobilization of geographically dispersed economic and socially heterogeneous groups created an environment unfavorable for social policy development (cf. Pierson, 1995; Swank,
2002, 47ff.). Cross-country econometric research and case studies have provided strong evidence for the negative effect of federalist arrangements on the
timing of social policy introduction as well as the level of social expenditure.
(cf. Immergut, 1992; Huber et al., 1993; Schmidt, 1996).
Less attention has been paid to welfare state development on the sub-national
level. Despite the claim of Pierson (1995) in his influential article, that the question of ”Who should do it” is of equally importance as the question ”What to
do” for social policy development in federalist states, scholars rarely engaged
in the investigation of sub-national welfare state development. Those who have
have drawn rather pessimistic conclusions. Inter-jurisdictional tax competition
as well as ”welfare magnets”, i.e. the attraction of welfare dependents of other
jurisdiction through the provision of social benefits, are seen as major obsta-
3
cles for sub-national social policy development (cf. Peterson, 1995; Obinger
et al., 2005b). Only institutional setups in which jurisdictions are provided
with grants or revenue from higher levels of governments provide incentives
to constituency units to spur social expenditure (Rodden, 2003).
According to this reasoning, it is unsurprising that federalist states as seen as
latecomers with regard to the timing of social policy introduction. In a ranking of the average timing of introduction of five social policy programs of 23
OECD countries, Obinger (1998b, 14) shows that federalist polities such as the
US, Canada, Australia and Switzerland are in the bottom third.1
However, the figure provides only an incomplete picture. In Switzerland, cantons became active in all major social policy areas expect work injury. Table
1 gives an overview of compulsory insurance laws in the cantons. Not included are unemployment and health insurance laws that were introduce on
the municipality level or covered only residents of other cantons (Aebi, 1935;
Biedermann, 1955).
1 Germany
and Austria are among the pioneers of social policy introduction which can be
attributed to the autocratic regime during the legislation of their social policies.
4
Table 1: Compulsory Insurance Laws
Canton
Old-Age
Pension
Health Insurance
Unemployment
Insurance
Family Allowance
AG
AR
AI
BL
BS
BE
FR
GE
GL
GR
LU
NE
NW
OW
SG
SH
SZ
SO
TI
TG
UR
VD
VS
ZH
ZG
Switzerland
1925
1931
1904
1898*
1907*
1946
1916
1920
1959
1914
1919
1919
1919
1923
1915
1958
1914
1926
1917
1917
1915
1926
1914
1916
1922
1916
1916
1911/1996
1926**
1931
1927**
1930
1926
1931
1928
1930
1925
1934
1929
1926
1933
1935
1931
1928
1928**
1926
1929
1930
1928
1928
1922
1938
1927
1982
1963
1965
1955
1962
1956
1961
1945
1944
1960
1958
1945
1945
1955
1954
1953
1962
1957
1959
1953
1960
1957
1943
1949
1958
1956
1953***
* Non-compulsory.
** Non-compulsory, subsidies only.
*** Only workers in the first sector are covered.
Figure 1 maps the timing of legislation of family allowance as well as health
and unemployment insurance laws. The vertical lines highlight the average
year of introduction of the OECD countries. The average year in the OECD
for health insurance is 1924, for unemployment insurance 1929 and for family
allowances 1944. The figure shows that almost 70% of the cantons introduced
health insurance laws in 1924 while about 50% of the cantons legislated un-
5
Figure 1: Social policies by program and year of introduction.
employment insurance in 1929. The cantons lag behind only with regard to
family allowances. In 1944, only 2 cantons or 8% of the cantons introduced
family allowances. Therefore, the timing of cantonal social policies does not
deviate much from the OECD average, at least for compulsory health and unemployment insurance laws.
Table 1 and figure 1 also illustrate that there are large differences in the variation in timing of social policy introduction. I argue that the variance can be
best explained by differences of parties in government. I am going to outline
my argument in the following subsection and discuss alternative approaches.
II.II. Political Parties and Cantonal Social Policies
Before proceeding to the arguments about party effects on social policies, some
clarifications about the Swiss party system are necessary. Since the mid-19th
century, Swiss politics was dominated by the conflict between the radical movement and the catholic conservatives. The main cleavage that dominated Swiss
politics was, therefore, the divide between church and state. Despite the emergence of other cleavages and the subsequent formation of social democratic
and farmer parties at the beginning of the 20th century, catholic conservatives and radicals tried to moderate social conflicts by incorporating all social
6
classes.2 As a result, radical and catholic conservative parties consisted of very
heterogeneous groups.
More specifically, the radical party included three different branches. First, the
liberals that were dominant in some french-speaking cantons as well as Basel
City were characterized by their laissez-faire market orientation and their opposition to state intervention and centralization. Second, the democrats constituted the left wing of the radical movement and advocated the extension
of social policies as well as direct democratic instruments. Third, the radicals
were the largest group and supported centralization measures but consisted
also of proponents of economic liberalism. While the three groups were integrated under the umbrella of the radical party on the national level, liberals
and democrats constituted independent parties in the cantons (cf. Gruner, 1977,
73ff.).
In contrast, the catholic party was more successful in the moderation of conflicts between its left and right wing. Independent Christian Social Parties
emerged only at the beginning of the 20th century and did not gain seats in cantonal executives before the mid-20th century. Nevertheless, the emergence of
the catholic worker’s movement did present a challenge for the catholic party.
While catholic conservatives and the right wing, consisting of farmer and
petty bourgeois, were reluctant to pursue social policies, the catholic worker’s
movement continuously pushed the catholic party to the left (cf. Wigger, 1997,
160ff.).
As I am going to show in the following, the left wing of both the radicals and
the catholic party are the main drivers of cantonal social policy development.
Quantitative evidence supports the argument that the introduction of health
and unemployment insurances can be largely attributed to the democrats and
the catholic worker’s movement as well as the radicals later on. In contrast,
family allowances were mainly pursued by the catholic and liberal party as
a reaction to the proliferation of social policies in other areas. Moreover, the
social democratic party was only of minor importance. I am going to give a
more detailed description in the following paragraphs.
The legislation of the national health insurance law in 1911 has been largely
attributed to proponents of the democrats. After obtaining responsibility for
health insurance policies in 1890, the federal government introduced subsidies
for health insurance providers and re-delegated the right to make health insurance mandatory to the cantons. Democrats as well as cantons with strong
catholic worker’s movement made extensive use of this opportunity.
The introduction of subsidies for unemployment insurance in 1923 was accompanied by a shift to the left of the radicals (Gruner, 1977, 93). The experience
2 Luebbert
(1991, 50) even argues that the radicals were Europe’s first ”Volkspartei”.
7
of the General Strike in 1918 and the radicalization of the social democrats
caused a reorientation of the radical party towards social equality. The significance of the ideological shift is mirrored in the relationship between the
radicals and their right wing, the liberals. The liberals reacted to the left shift
of the radicals by suspending their cooperation with the federal party completely (Rutishauser, 1935, 210ff.). As a consequence, the radicals became a
main driver of the legislation of compulsory unemployment laws in the cantons besides the catholic worker’s movement. At the same time, the seat share
of the democrats in cantonal executives decreased continuously except in the
canton of Grison.
While starting point of cantonal legislations of unemployment and health insurance is the introduction of federal subsidy laws3 , no such law preceded
the introduction of family allowances. This is unsurprising because family
allowances for non-agricultural worker are primarily financed through employers’ contributions. In contrast, the major share of family allowances for
agricultural employees is provided by the federal state since 1953 (Schaeppi,
1974, 43f.). The introduction of family allowances on the cantonal level can be
rather understood as a reaction of the catholic party and the liberals to demographic changes and the expansion of social policies in other areas. Especially
the introduction of the national old-age pension system in 1946 was seen as a
major threat to the functioning of the traditional family (Sommer, 1978, 232ff.).
In addition, the provision of family allowances were widespread in the frenchspeaking cantons before the introduction of the first family allowance laws in
the cantons. This situation can be attributed to a social movement consisting
of religious moral societies that emerged in the french-speaking cantons while
no similar counterpart did exist in the german-speak part of Switzerland. The
movement emphasized that the functioning of the family depends on certain
economic prerequisites. More precisely, the supplementation of wages by so
called ”family wages” was seen as a necessary condition for the persistence of
the male breadwinner model (Schumacher, 2009, 144).
The outlined developments strongly align with the christian democracy theory (Kalyvas and van Kersbergen, 2010) and, to some extend, with Luebbert’s
Lib-Lab hypothesis (Luebbert, 1991). However, the comparative welfare state
literature forwards also other theories about political parties and their effect
on social policy development. Most importantly, I am going to discuss the relevance of red-green coalitions as well as the power resources approach for the
introduction of social policies in the Swiss cantons in the next paragraphs.
3 This
aligns with previous research that highlighted federal grants and revenue-sharing as
crucial factors for the expansion of public spending in lower tiers of government (Rodden,
2003).
8
Political alliances between social democrats and agrarian parties (red-green
coalitions) are seen as decisive for subsequent welfare state expansion in the
Scandinavian countries (Esping-Andersen, 1990, 29f.). In Switzerland, however, the agrarian party did constitute itself as a party in opposition to the
working class and their social democratic leaders. A major recurring issue was
the question of how the living standards of the non-agricultural working force
can be improved. While the left wing of the radicals and the social democrats
advocated the reduction of food prices via dismantling of tariffs, the agricultural party demanded an increase in industrial wages to match food prices (cf.
Junker, 1968, 33ff.).4
The power resources approach claims that the generosity of the welfare state
reflects the ability of the worker’s movement to organize their interests in
unions and left, mostly social democratic parties (Korpi, 1983). While the social democrats did not gain access to the executive in the federal government
before 1943, they were part of the executive in many protestant and urban
cantons during the first quarter of the 20th century. Indeed, some evidence
suggests that cantons with social democrats in the executive offered more generous benefits for health insurance, most notably Basel City (cf. Steinmann,
1973, 86ff.). However, the influence of the left on the introduction of social
policies was limited. With the orientation towards Marxism in 1904 and subsequent left shift during the first World War that culminated in the General
Strike in 1918, the social democrats developed hostile attitudes towards the
contributory social policy framework that the federal government provided.
Even though evidence for policy processes in cantonal social policy fields is
scarce, existing accounts show that social democrats did successful prevent the
introduction of a health insurance law in Schaffhausen in 1917 and delayed
the introduction of an old-age pension system in Geneva for four decades.5
Instead of contributory system, social democrats favored tax-financed social
policies under the administration of cantonal or the federal government.
The radicalization of the social democrats explains why their influence on the
timing of social policies was neglectable. Similar to the national level, the radicals reacted to ideological reorientation of the left by abandoning the strategy
of Lib-Lab coalitions (Luebbert, 1991, 51f.). Most imortantly, joint list between
radicals and social democrats did only exist in the cantons after 1914 anymore
(Gruner, 1988, 158). What is more is that the federal government designed
4 In
some cantons such as Schaffhausen and Aargau, social democrats forged alliances with
the youth organization of the agrarian party during the economic crisis (Joss, 1975; Müller,
2009). However, the latter experienced a strong shift to the right during the second world
war that led to a break with the social democrats (Gruner, 1977, 263).
5 The outcome in Geneva was the introduction of a social assistant system for the elderly in
1939. It is, therefore, not listed in table 1 as an old-age pension system (Rimli, 1950, 278).
9
the unemployment insurance subsidy law in 1923 to disadvantage unions and
their social democratic allies. More precisely, the federal government decided
to cover 40% of all benefit expenses for unemployment insurance providers run
by cantons and municipalities as well as employers and employees. In contrast,
private providers that were exclusively administered by unions received only
30% (Sommer, 1978, 164ff.).
Social democrats became also major opponents of family allowances. The dominant paradigm was a corporatist model that included no redistributive elements which disadvantaged low-income households disproportionately. Competing ideas that met the demands of feminists and social democrats received
only little attention (Schumacher, 2009, 156ff.). In addition, unions argued that
family allowances would divide the labor movement since workers with children had less incentive to become union members (Sommer, 1978, 231).
In the section, I outlined several hypotheses about the party effects on the timing of social policy introduction. I argue that social policies were primarily
driven by the catholic worker’s movement and the democrats. In addition, the
radicals replace the democrats as social policy advocates in the interwar period
as a reaction to the increasing strength of the social democrats and social unrest. In contrast, the social democrats did not support cantonal social policies
because they became increasingly hostile towards contribution-based welfare
measures.
Before I proceed to support my argument with quantitative evidence, I am going to discuss alternative approaches to welfare state development. In the next
section, I discuss modernization theory, employers preferences towards social
policy, the role of political institutions and diffusion.
III. Alternative Approaches to Welfare state
Development
III.I. Modernization Theory
Proponents of the modernization thesis argue that the timing of the introduction of social policies as well as the level of social security spending depend
on socio-economic forces (cf. Cutright, 1965; Rimlinger, 1971; Wilensky, 1975).
In this line of reasoning, increases in economic development, industrialization
and urbanization, to name the most prominent determinants, lead to the emergence of new social problems. The timing of the introduction of social policies
is, therefore, highly correlated with the level of modernization. In contrast, po-
10
litical regimes, whether they are autocratic or democratic, as well as political
parties, react to social problems by legislating social policies independently of
their ideology (see also Polanyi, 2001, 153f.). However, not all modernization
theorists shared this apolitcal point of view. Some of them, such as Marshall
(1963), argued that political modernization in terms of suffrage extension ultimately led to the introduction of social policies. With the newly acquired
voting rights, lower socio-economic classes could expression their preferences
for policies that compensated income losses due to unemployment, sickness
and aging.
Most scholars have argued that modernization arguments contribute only little
to the understanding of the development of the Swiss welfare state. Democratization in terms of full (male) suffrage long preceded the introduction of the
first cantonal and national social policies (cf. Puttner, 1983, 68ff.). In addition,
industrialization was characterized by geographical dispersion while urbanization rates remained low. Industrial center developed only in few regions, most
notably in Northeastern Cantons (cf. Obinger, 1998b, 70). In conclusion, geographical variation in terms of modernization is unlikely to explain the timing
of social policy adoption in the Swiss Cantons.
III.II. Employers
A recent strand of literature argues that employers played a decisive role in
welfare state development (cf. Mares, 2003). According to these scholars, a
number of internal characteristics as well as external conditions influence the
preferences of firms towards social policy. Most specifically, internal characteristics such as skill demand, size and export orientation influence the social
policy demands of employers. In addition, others pointed out that employer
associations develop more favorable attitudes towards welfare measure when
they face a revolutionary situation in terms of a radical and strong worker’s
movement. I outline the different arguments in the next paragraphs.
An important claim is that firms dependent on specific sets of skills which, in
turn, shape their social policy preferences. To provide an incentive for workers to invest in specific, non-transferable skills, firms lobby for social policies
that prevent the devaluation of those skills in time of economic hardship (e.g.
unemployment). Without such social safety nets, workers would refrain from
investing in specific skills and firms would face an undersupply at the labor
market (cf. Estevez-Abe et al., 2001).
Other scholars have argued that larger firms have more favorable attitudes towards social policy. Given their greater capacity to make strategically use of
11
social policies, they display stronger preferences for social policy than their
financially weaker counterparts. For instance, larger firms in Germany used
early pensions more often to lay off older workers (cf. Ebbinghaus, 2006, 47f.).
Another example the their stronger interest in peaceful labor relations (cf. Hassel and Rehder, 2001).
The last internal characteristic of firms that is forwarded to explain positive
social policy preferences is export orientation. For instance, Swenson (1991)
has shown that employers in export-oriented branches promoted centralized
wage bargaining in order to reduce the wage gap to domestic-oriented firms.
More generally, Gourevitch (1989) argued that employers in export-oriented
branches make concessions on social policy in order to achieve their ends in
other policy areas.
In contrast to these arguments that emphasize internal characteristics as important determinants of social policy preferences,Paster (2013) claims that the
political context is decisive for the role of business in social policy. Distinguishing between revolutionary and reformist situation, Paster argues that firms and
business associations preferred social policies only in the first context. For instance, when German employers faced the increasing electoral success of the
militant social democrats, they supported Bismarck’s insurance policies.
The role of Swiss employers in social policy legislation is less well documented.
One rare example is Leimgruber (2011, 34ff.). He provides evidence that a sectoral conflict was present in the referendum against the KUVG. While labor
intensive branches, such as silk producers and textile industries, opposed social policy endeavors, metal and machine industries displayed a more favorable
attitudes. Therefore, I investigate the role of firms more in detail in the result
section.
III.III. Political Institutions
A number of scholars emphasized the importance of the fragmentation of political power. According to this argument, political institutions such as bicameralism and direct democracy constitute veto points where parties and interest
groups can intervene in the policy process and block legislation. In the Swiss
case, direct democracy received particular attention (Immergut, 1992; Obinger,
1998a,b; Wagschal and Obinger, 2000; Obinger et al., 2005a).
In a nutshell, the argument suggests that direct democracy is an instrument of
the citizens to correct for policies that deviate from the median voter’s preference (cf. Funk and Gathmann, 2011). In addition, the mere existence of referendums and voter initiatives is said to have a disciplining effect on politicians
(cf. Neidhart, 1970). Therefore, politicians already consider the preferences of
12
the median voter during the formulation of policy proposals. Moreover, recent studies provided evidence that referendums have a middle and upper
class bias since lower income groups do more often abstain from participation
(Bechtel et al., 2015). Since middle classes generally prefer market over state
solutions in social policy matters (Esping-Andersen, 1990, 31), differences in
political participation across income groups seem to be a main cause for retarding effect of direct democracy on welfare state development.
In contrast, other scholars argue that the effect of direct democracy on welfare
state developments is depending on the kind of instrument and the historical period. For instance, Obinger (1998a, 256) argues that initiatives have two
positive, indirect effects on social policy development. First, initiatives can
influence the agenda-setting process of the parliament. Second, governments
adopt parts of popular initiatives even when the initiatives are rejected. In
addition, Matsusaka (2000) provided evidence that states in the US with initiatives had higher expenditure than states without initiatives in the first half of
the 20th century.
III.IV. Diffusion
A large literature argues that policy making in one political unit is dependent
on the behavior in other, mostly geographical proximate political units. Studies of policy diffusion systematically investigated which determinants within
a unit as well as between units lead to the spread of specific policies (cf.
Meseguer and Gilardi, 2009; Gilardi, 2010). According to the literature, two
arguments are important for the lack of diffusion of social policies in federalist
states.
First, capital and labor mobility impede the introduction of social policies. In
general, social policies are linked to higher spending which, in turn, requires
an increase in taxation, at least in the long run. Increasing taxation, then, imposes higher costs for capital and labor which creates an incentive to move to
nearby political units with lower taxation. The result is a ”competitive deregulation” (Pierson, 1995) that induces a race to the bottom with regard to social
expenditure.
Second, the introduction of social policies creates an incentive for welfaredependents to move to political units with more generous benefits (cf. Peterson,
1995). According to this ”welfare magnet” argument, the relocation of welfaredependents from other constituency units will lead to higher spending and,
therefore, higher budget deficits or taxation. Therefore, cantonal authorities
have a strong incentive to refrain from introducing social policy measures.
13
While the first argument about tax competition seems to be intuitive, the ”welfare magnet” does not work for the Swiss case. Although often modified, the
so-called ”Heimatprinzip” was existent in most cantons until the mid-1070s.
According to this principle, cantons had to cover all expenses of their dependent citizens that resided in other cantons (Obinger, 1998b, 64ff.). In addition,
recent studies provide evidence that the level of social provision does not influence the decision of low-income households in Switzerland to relocate (Feld,
2000).
IV. Data and Method
In order to investigate the introduction of social policies in the Swiss cantons
from 1914 to 1959, I created a novel dataset from a number of historical sources
and statistics. In this section, I present and discuss some problems of the data.6
IV.I. The dependent variable
The measures for family allowances, health and unemployment insurance are
binary and capture the year one of the three laws were legislated. Following
previous literature, I take only those laws into account that made the respective type of social policy mandatory for parts of the population. The reason
is straightforward: Only mandatory laws are seen as a major leap forward in
welfare state development. As a result, health insurance was legislated in only
21 cantons while 22 cantons introduced unemployment insurance. Only family
allowances were adopted in all 25 cantons.
One problem that has to be highlighted is the design of cantonal social policies. They differed among multiple dimensions. Health insurance is a case in
point. First, the laws were implemented on the cantonal or municipality level.7
Second, the scope of the laws differed between cantons. The French-speaking
cantons targeted primary school pupils while most German-speaking cantons
aimed at low-income households. However, income as well as age thresholds within those categories varied strongly between the cantons. In addition,
Tecino and Grison delegated the right to introduce health insurance to their
municipalities with the requirement to make health insurance mandatory for
6A
more detailed description of the data can be found in the appendix.
Outer Rhodes even introduced mandatory health insurance for foreign residents
on the cantonal level but gave the right to their municipalities to extend the existing law to
additional groups of the population.
7 Appenzell
14
all parts of the population (Hünerwadel, 1938). Third, cantons provided different amounts of subsidies to different groups (Hünerwadel, 1927). Fourth, a
number of cantons included additional features that are relevant for the classification of compulsory laws such as employer contributions.
In conclusion, it appears to be an impossible endeavor to obtain a classification that captures the scope and generosity of the laws in detail. The crucial
assumption that makes the results of this paper valid is that the timing of
the introduction of social policies laws is orthogonal or even negatively correlated with their scope and generosity. The fact that many of the poorer
mountainous cantons such as Obwald, Nidwald and Grisons were last cantons
besides Zurich that introduced unemployment insurance supports the assumption. The latecomer Basel County provides similar evidence for health insurance. The canton were the last that introduced health insurance and provided
the least comprehensive law by targeting only agricultural workers. The case
family allowances shows that the level of benefits as well as additional benefits such as education and birth allowance are more common and higher in
the cantons that first introduced family allowance (Schaeppi, 1974). Therefore,
it is reasonably to assume that the results are not confounded by a positive
relationship between timing and generosity.
IV.II. The independent variables
To account for modernization effects, I employ population density. Data for
economic development, i.e. GDP p.c., is not available on the cantonal level.
In addition, urbanization rates for the cantons are also not available. What
is more is that the capitals of some Central Swiss cantons have had less than
10’000 residents over the first half of the 20th century which would result in
urbanization rates of zero. Population density, therefore, is a better proxy to
capture modernization pressures. Moreover, I include additional indicators to
every policy field that are directly associated with functional pressure. For
health insurance, I include infant mortality rates since it captures the health
situation of the population. The size of the second sector is included as an
additional indicator for unemployment insurance. While unemployment rates
would be more straightforward, they are only available from 1931 onwards.
In addition, they are missing for The size of the second sector serves as an
proxy since the branches that are more prone to unemployment, i.e. export
oriented and labor-intensive branches, are mainly part of the industrial sector.
The share of the population below 20 years of age serves as an indicator for
functional pressure with regard to family allowances.
I included a number of political variables. Most importantly, the previous
15
welfare state literature employed the seat share of parties in government to estimate the influence of parties on policies. For the composition of the cantonal
executive, I collected data from Felder (1993). The data provide information
on the different parties in the executive from different points in time from
the mid-19th century. While the data has been collected for the first time to
employ it in quantitative research, it faces some shortcomings. First, data on
ideological changes within a party over time are not available. Therefore, I rely
on qualitative accounts and interactions with time-covariates to document and
explain non-constant effects of parties on the dependent variable. Second, the
ideological orientation of parties can vary between cantons. While the groups
with different ideological orientation within the radical party, i.e. liberals, radicals and democrats, constituted different parties on the cantonal level, the
same is not true for the catholic party. The left wing of the catholic party did
not gain seats in the cantonal executives as an independent party before the
1940s. However, numerous sources document that the left wing of the catholic
party have had members in the cantonal executives since the 1910s (Gehrig,
1969; Holenstein, 1993; Wigger, 1997). In order to disentangle the heterogeneity within catholic party, I create a dummy for the cantons with a catholic
party in the executive and a strong left wing within the catholic party. According to historical sources, proponents of the left wing were member in the
executive in Solothurn, Geneva, Basel City, St. Gallen, Uri, Zug and Lucerne.
Third, no data on the composition of the executive in Appenzell Inner Rhodes
and Appenzell Outer Rhodes is available. I coded Appenzell Inner Rhodes as
completely dominated by the catholic party. The decision is based on the fact
the catholic party dominated the executives in cantons with religious homogeneous, catholic populations during the 20th century. In contrast, I assigned a
seat share of 60% to the radicals and 40% to the social democrats in Appenzell
Outer Rhodes. This decision reflects the voting behavior in Appenzell Outer
Rhodes for the national council during the same period.
I also use a measure for direct democracy. Data for popular initiatives is taken
from Funk and Gathmann (2011). More concretely, the variable measures the
number of signatures required to start a initiative, weighted by the the eligible
population. However, data on other direct democratic instruments on the cantonal level throughout the 20th century are not available. To account for this
shortcoming, I included a dummy variable that measures whether a canton is
a ”Landsgemeinde”.
Union density is only available from 1921 onwards and is missing for the canton Obwalden. In addition, data for catholic unions is missing. Therefore, the
measure for union density has a strong bias towards protestant cantons since
the protestant union had a negligible number of members compared to the left
16
and the catholic unions. Therefore, union density is not included in the estimations.
In addition, I also employ a measure for the number of parties in the cantonal
executive. According to the literature, a higher number of parties is associated
with more government spending in general (Bawn and Rosenbluth, 2006).
For employers, I use two different variables. First, I capture firm size by dividing the number of workers by the number of firms in every branch of the
second sector. After that, I calculate the mean of all branches. Second, I measure the size of the export oriented branches. To do so, I divide the number of
workers in the export branches by all workers in the second sector. The specific export branches are outlined in David (1995); Müller (2012) and include
watches, textile, food, chemistry as well as steel industry and machinery. Third
and last, I use the size of labor intensive branches. The reason is the following.
Since it is impossible to obtain reliable data for the skill demand of firms from
historical sources, I am not able to consider the respective hypothesis in the
estimation.
To capture diffusion effects, I follow the existing literature by measuring the
percentage of contiguous states that introduced a health or unemployment insurance law in the previous year (cf. Berry and Berry, 2007).
IV.III. Method
To estimate the effect of covariates on the timing of an event with annual data,
scholars normally employ event history analysis in a discrete data setting.
More specifically, the data set consists of annual observations for every subject.
After experiencing the event, the subject drops out of the data set since it is not
longer at risk (in non-repeated events settings). In addition, parameters are estimated via logistic, probit or complementary log-log regression. Furthermore,
time dependence is modeled via the inclusion of time dummies (Beck et al.,
1998), splines or time polynomials such as log(t), t, t2 and t3 (Box-Steffensmeier
and Zorn, 2001; Carter and Signorino, 2010). Moreover, standard errors are adjusted to account for clustering of errors within units (Box-Steffensmeier and
Jones, 2004, 156ff.).
In this paper, I adopt the framework outlined above with one modification. I
chose to use a different estimator, namely Firth’s penalized likelihood approach
(Firth, 1993). The reason is twofold: First, Macro Panels or Time-Series CrossSection data (TSCS) usually consist of small samples. Conventional Maximum
Likelihood-based estimators have poor finite sample properties, especially if
the number of observations is small (i.e. N <500). Second, maximum likelihood estimates tend to underestimate event probabilities if the dependent
17
variable is unequal distributed King and Zeng (cf. 2001).8 Since both problems are present in my data, I opt for Firth’s penalized likelihood approach.
This approach offers a solution to common problems that political scientist frequently face such as quasi-complete separation and small sample bias (Zorn,
2005; Heinze and Puhr, 2010).
In addition, I model time dependence by including the log of time as an covariate (cf. Box-Steffensmeier and Zorn, 2001). While others advocate the inclusion
of multiple time polynomials, I do not follow this strategy due to two reasons.
First, the choice of the number of covariates as well as their transformation
seems to be arbitrary since the process of modeling time dependence is very
often not theoretically guided. Including the log of time is, therefore, the more
parsimonious solution. Second, my arguments require to specify a number of
models with several interactions. According to Carter and Signorino (2010),
the test for non-proportionality in models with three time polynomials would
lead to the inclusion of three interaction terms as well as their lower order
terms. The problems associated with this specification in a TSCS setting with
a small number of N is evident.
8 Such
settings are usually label as rare events. However, the problem cuts both ways: Rare
events as well as rare non-events.
18
V. Results
In this section, I present the results from the estimations. In a first step, I show
and discuss the results from the estimations in the regression table. In the
second step, I plot the effects of some selected variables to illustrate the nonlinear relationship of my predictors. Table 1 starts with the results for health
insurance.
19
Table 2: The Introduction of Health Insurance Policies 1914-1959
Dependent variable:
(1)
Democrats
CSP (dummy)
Social Democrats
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
2.926∗∗∗
3.179∗∗∗
4.161∗∗∗
4.290∗∗∗
3.842∗∗∗
3.316∗∗∗
3.528∗∗∗
3.633∗∗∗
(0.842)
2.614∗∗∗
(0.493)
2.679∗
(1.474)
(0.819)
3.015∗∗∗
(0.520)
7.813∗∗∗
(2.306)
−2.155∗∗
(0.858)
(1.116)
3.878∗∗∗
(0.718)
8.188∗∗∗
(2.331)
−2.077∗∗
(0.825)
0.034∗∗∗
(0.009)
0.001∗∗∗
(0.0002)
(1.146)
3.948∗∗∗
(0.750)
8.641∗∗∗
(2.402)
−2.257∗∗∗
(0.837)
0.033∗∗∗
(0.009)
0.001∗∗∗
(0.0002)
1.063∗∗∗
(0.334)
(1.089)
4.091∗∗∗
(0.710)
6.250∗∗∗
(2.367)
−1.889∗∗
(0.877)
0.027∗∗∗
(0.009)
0.001∗∗∗
(0.0002)
−22.838∗∗∗
(7.871)
14.893∗∗∗
(4.823)
(1.162)
3.953∗∗∗
(0.685)
8.705∗∗∗
(2.853)
−2.776∗∗∗
(1.046)
0.033∗∗∗
(0.010)
0.001∗∗
(0.0003)
−20.089∗∗∗
(6.807)
12.644∗∗∗
(4.079)
−1.043∗∗
(0.506)
(1.368)
3.971∗∗∗
(0.703)
8.769∗∗∗
(2.938)
−2.725∗∗∗
(1.022)
0.032∗∗∗
(0.010)
0.001∗∗
(0.0003)
−20.379∗∗∗
(7.046)
12.774∗∗∗
(4.192)
−1.081∗∗
(0.508)
−0.110
(0.300)
(1.210)
3.760∗∗∗
(0.622)
7.679∗∗
(2.989)
−2.408∗∗
(1.064)
0.027∗∗
(0.013)
0.001∗
(0.0003)
−21.739∗∗∗
(6.709)
13.359∗∗∗
(3.995)
−0.603
(0.690)
5.140∗∗∗
(1.405)
3.949∗∗∗
(0.785)
7.777∗∗∗
(2.990)
−3.044∗∗∗
(1.129)
0.040∗∗
(0.017)
0.001∗∗∗
(0.0003)
−26.531∗∗∗
(8.388)
15.369∗∗∗
(4.768)
−0.330
(0.610)
Soc. Dem.*log time
Infant Mortality
Population Density
Initiatives
Initiatives*log time
Landsgemeinde
Number of Parties
Ave. Firm Size
0.010
(0.006)
−0.673
(1.215)
Size Export Sector
−0.603∗∗∗
(0.154)
−1.533∗∗∗
(0.316)
−0.465∗∗
(0.182)
−2.251∗∗∗
(0.371)
−0.195
(0.186)
−2.756∗∗∗
(0.407)
0.593
(0.366)
−6.953∗∗∗
(1.575)
0.611∗
(0.371)
−6.954∗∗∗
(1.594)
−0.120
(0.364)
−5.166∗∗∗
(1.518)
0.088
(0.400)
−5.552∗∗∗
(1.667)
0.107
(0.400)
−5.281∗∗∗
(1.702)
−0.067
(0.413)
−5.298∗∗
(2.084)
−3.068∗
(1.742)
1.114
(0.777)
−7.583∗∗∗
(2.207)
25
375
−75.622
155.244
25
375
−69.657
149.315
25
375
−68.120
148.239
25
375
−63.526
143.053
25
375
−63.288
144.576
25
375
−59.126
138.252
25
375
−58.130
138.260
25
375
−58.185
140.370
25
375
−57.736
141.472
25
375
−55.496
136.992
Diffusion
log time
Constant
Cluster
Observations
Log Likelihood
Akaike Inf. Crit.
Note:
0.015∗∗∗
(0.005)
∗ p<0.1; ∗∗ p<0.05; ∗∗∗ p<0.01
In general, the regression table supports the arguments above. The first
model shows the baseline model. The AIC as a measure of model fit decreases
when several party variables are included in model 2 which means that the
model improved. As theoretical expected, the democrats and the dummy for
the left wing of the catholic conservatives, labeled as CSP, display highly positive and significant effects. The effect of the social democrats is positive but
only weakly significant. In line with my theoretical argument, I include an
interaction term of social democrats with the time covariate in model 3. As a
result, the model fit improves. Moreover, the effect of social democrats is now
positive and highly significant. A theoretically expected, the effect decreases
over time which reflects the radicalization of the left.
In the subsequent models, I include a number of control variables that could
confound the party effects. However, no confounder renders the party effects
insignificant. In addition, their coefficients are not strongly affected. In model
4, I include population density and infant mortality as measures for modernization and functional pressure, respectively. Both are significant and show the
expected sign. Signature requirements for an initiative are highly significant
and positive in model 5. The interpretation is straightforward. The more restrictive the usage of initiatives is, the more likely is the introduction of health
insurance laws. However, the AIC shows that the model fit hardly improved.
Therefore, I included in model 6 interaction term for signature requirement
and the time covariate to test for non-proportional effects. The model fit improved considerably and the interaction term is highly significant. What is
more is that the interaction provides evidence that the effect reversed over
time. At the beginning, cantons with less restrictions on the use of initiatives
had a higher probability of introducing health insurance laws. However, this
effect reversed over time. In model 7, I included a dummy for cantons with
”Landsgemeinde”. More in line with previous research, these cantons with
more extensive direct democratic instruments display a significant negative effect. However, the effect is not robust as the subsequent models show. The
variable for the number of parties is included in model 7 but does not increase the model fit. The preferences of employers are considered in model 9.
However, both variables are not significant which can be attributed to multicollinearity issues. The inclusion of firm size alone improves the model fit as
model 10 shows. In addition, firm size is highly significant and positive as theoretically expected. The same holds for the diffusion variable that is negative
and significant.
Since the coefficients in non-linear models give only an incomplete picture, I
plot the effects of the party variables in figure 2. The plots display that the effect
for Democrats and the catholic worker’s movement are non-linear increasing.
21
In contrast, the coefficients in the regression tables for the social democrats appear to be highly misleading. More precisely, the lower panel plots the effects
for social democrats at two different points in time. While the point estimate
suggests a increasing trend in the effect, the lower confidence bound never
crosses the minimum of the higher confidence bound. The effect of the social
democrats can, therefore, not distinguished from zero in both points of time.
22
Figure 2: The Party Effects on the Introduction of Health Insurance Laws
The results for unemployment insurance are displayed in table 3. Model
1 is again the baseline model that serves as reference for subsequent model
specification. In model 2, I included variables for the left, democrats, catholic
worker’s movement and the radicals as well as an interaction term for the
radicals and the time varying covariate. As theoretically expected, the social
democrats have no discernible effect on the probability of unemployment insurance legislation. The democrats even have a negative, insignificant effect.
However, this finding is a statistical artifact. As pointed out above, the seat
share of democrats in the executives decreased in all cantons during the period except in Grisons. In contrast, the coefficient for the catholic worker’s
movement as well as the interaction of radicals and the time covariate is positive and highly significant. What is less intuitive is that the coefficient of the
radicals is negative, suggesting that the radicals initially opposed the introduction of unemployment insurance laws. However, the plots below display that
the coefficient is, again, misleading.
What is more is that the effect of the radicals and the catholic worker’s movement are robust over all specifications. In addition, most confounder do not
improve the model fit. More precisely, none of the covariates is significant
except firm size in model 8 to 10. The finding suggests that most theories,
especially institutionalist approaches, do not work well during the Great Depression and the second World War when unemployment insurance laws were
legislated.
24
Table 3: The Introduction of Unemployment Insurance Policies 1924-1937
Dependent variable:
(1)
Social Democrats
(2)
0.297
(1.299)
−3.106
(2.730)
−5.672∗
(3.071)
4.840∗∗∗
(1.781)
1.224∗∗∗
(0.447)
Democrats
Radicals
Radicals*log time
CSP (dummy)
Population Density
Size Second Sec.
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
−4.421
(2.758)
4.287∗∗∗
(1.612)
1.103∗∗
(0.502)
0.0004∗∗∗
(0.0001)
−0.732
(2.773)
−4.965
(3.192)
4.501∗∗
(1.884)
1.093∗∗
(0.499)
0.0004∗∗∗
(0.0001)
−5.300∗
(3.084)
4.715∗∗∗
(1.824)
1.106∗∗
(0.538)
0.0005∗∗
(0.0002)
−4.495
(3.314)
4.364∗∗
(1.773)
1.139∗∗
(0.519)
0.0004∗∗∗
(0.0001)
−4.244
(2.884)
4.096∗∗
(1.634)
1.130∗∗
(0.486)
0.001∗∗
(0.0003)
−4.167
(2.999)
4.302∗∗
(1.815)
1.119∗∗
(0.522)
0.0004∗∗∗
(0.0001)
−3.701
(3.247)
4.069∗∗
(1.963)
1.066∗∗
(0.516)
0.0005∗∗∗
(0.0001)
−3.562
(3.212)
4.057∗∗
(1.933)
1.192∗∗
(0.515)
0.0005∗∗∗
(0.0001)
2.077
(7.239)
15.035
(14.910)
−7.639
(8.751)
0.007∗∗∗
(0.003)
0.470
(1.317)
0.007∗∗∗
(0.003)
0.008∗∗∗
(0.003)
0.056
(0.677)
−4.050∗∗∗
(1.403)
186
−56.665
127.329
Initiatives
Initiatives*log time
Landsgemeinde
0.279
(0.471)
−0.223
(0.300)
Number of Parties
Ave. Firm Size
Size Export Sector
0.832∗∗∗
(0.288)
−3.264∗∗∗
(0.463)
−0.358
(0.500)
−2.155∗∗
(0.850)
−0.160
(0.533)
−2.456∗
(1.366)
−0.237
(0.575)
−2.664∗∗∗
(1.001)
0.092
(0.786)
−3.249∗
(1.667)
−0.167
(0.536)
−2.862∗∗
(1.242)
−0.023
(0.508)
−2.424∗∗
(1.130)
−0.049
(0.627)
−3.949∗∗∗
(1.244)
−0.690
(0.841)
0.340
(0.742)
−4.175∗∗∗
(1.391)
25
186
−64.151
132.302
25
186
−57.623
129.246
25
186
−57.515
129.029
25
186
−57.533
129.067
25
186
−57.345
130.689
25
186
−57.500
129.000
25
186
−57.374
128.749
25
186
−56.736
129.471
186
−56.421
128.841
Diffusion
log time
Constant
Cluster
Observations
Log Likelihood
Akaike Inf. Crit.
Note:
∗ p<0.1; ∗∗ p<0.05; ∗∗∗ p<0.01
Figure 3 plots the party effects for the catholic worker’s movement and the
radicals over time. The upper left panel shows that the confidence bounds
or the CSP dummy are too large for a significant effect. This is unsurprising
given the fact that the dummy does only include information about cantons
with members of the catholic worker’s movement in the executive in 1911.
Therefore, the influence of the left wing of the catholic party should not be
rejected prematurely until better measures are available.
The remaining plots map the effect of the radicals over time. In line with
my theoretical arguments outlined above, the ideological reorientation of the
radicals is clearly reflected in the plots. A positive effect can be identified from
1927 onwards while the effect in 1924 is not substantively different from zero.
26
Figure 3: The Party Effects on the Introduction of Unemployment Insurance Laws
Table 4 presents the results for family allowances. As argued above, political coalitions shifted in this field. Model 2 supports the argument that the
social democrats strongly opposed the introduction of family allowances while
no effect can be identified for the radicals. Refocusing on the catholic party,
the catholic worker’s movement that started to participated in some cantonal
executives as an independent party and the liberals, the model fit increased
considerably. What is more is that the effects remain robust over all model
specifications.
Model 4 shows that that the effect of initiatives varies over time. The effect only
weakens in model 5 when socio-demographic confounders are added. The inclusion of socio-demographic factors also strongly influence the coefficients of
the party effects. The variable for the share of the French-speaking population decreases the effect of the liberal party. This is unsurprising given that
the liberals were primarily dominant in the French-speaking cantons. I argue
that the liberal party was a proponent of family allowances and moderates the
effect of the French-speaking population. Therefore, I exclude the share of the
French-speaking population in the subsequent models. In addition, model 6
shows the share of the age group below 20 years affects the coefficient of the
catholic party positively. This can be easily explained by the fact that the age
group variable captures some of the heterogeneity of the catholic party. While
the catholic party had strong preferences for family allowances, they also had
the balance the interest of proponents of family allowances with the interests of
employers that financed family allowances. The age group measure, therefore,
captures some of the negative variance of the variable of the catholic party.
Model 7 and 8 show that the inclusion of the ”Landsgemeinde” Dummy as
well as the measure of the number of parties in government do not contribute
to the model fit. Unsurprisingly, the coefficients for firm size and the size of
the export oriented sector are negative. Given that the major share of family allowances is finance through employer contributions, the result aligns strongly
with the the economic interests of firms. Yet, both measures are not significant.
The last model shows that the diffusion effect is positive. Given that family allowances are not financed by the cantons, this result is intuitive. However, the
measure does not reach statistical significance.
28
Table 4: The Introduction of Family Allowances 1943-1965
Dependent variable:
(1)
Social Democrats
Radicals
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
−4.568∗∗∗
−5.782∗∗∗
−6.007∗∗∗
−4.977∗∗∗
−6.164∗∗
−6.155∗∗
−5.945∗∗
−5.741∗∗
(1.574)
0.597
(1.762)
(1.729)
(2.083)
(1.783)
(2.508)
(2.486)
(2.486)
(2.266)
−4.923
(3.100)
1.775∗∗
(0.891)
16.406∗∗∗
(4.413)
22.361∗∗∗
(4.220)
3.143∗∗
(1.524)
20.902∗∗∗
(4.727)
23.269∗∗∗
(3.899)
642.547∗∗∗
(140.611)
−170.667∗∗∗
(38.564)
3.462∗∗
(1.356)
23.122∗∗∗
(5.990)
17.423∗∗∗
(3.646)
332.042∗∗
(166.359)
−88.436∗
(45.170)
4.268∗
(2.316)
4.994∗∗
(2.131)
22.038∗∗∗
(5.176)
21.783∗∗∗
(3.650)
652.443∗∗∗
(137.131)
−173.290∗∗∗
(37.335)
4.938∗∗
(2.123)
21.231∗∗∗
(5.864)
21.463∗∗∗
(3.617)
675.659∗∗∗
(144.554)
−180.561∗∗∗
(41.958)
4.781∗∗
(2.123)
22.312∗∗∗
(5.864)
21.434∗∗∗
(3.617)
620.352∗∗∗
(144.554)
−164.428∗∗∗
(41.958)
4.847∗∗
(2.165)
21.426∗∗∗
(4.728)
21.617∗∗∗
(3.532)
645.925∗∗∗
(137.968)
−171.754∗∗∗
(37.598)
5.860∗∗
(2.436)
24.096∗∗∗
(6.313)
19.922∗∗∗
(3.418)
454.791∗∗∗
(141.956)
−119.802∗∗∗
(38.785)
−0.142∗
(0.085)
−0.137
(0.091)
−0.287
(1.094)
−0.145
(0.091)
−0.133∗
(0.080)
−0.174∗
(0.091)
Catholic Party
CSP
Liberals
Initiatives
Initiatives*log time
Perc. French-Speaking
Perc. Age below 20
Landsgemeinde
−0.120
(1.094)
Number of Parties
−0.001
(0.005)
−0.898
(2.621)
Ave. Firm Size
Size Export Sector
Diffusion
log time
Constant
Cluster
Observations
Log Likelihood
Akaike Inf. Crit.
Note:
6.346∗∗∗
(1.929)
−25.717∗∗∗
(7.255)
8.307∗∗∗
(2.326)
−32.230∗∗∗
(8.458)
16.165∗∗∗
(3.739)
−62.148∗∗∗
(14.108)
26.593∗∗∗
(4.824)
−101.935∗∗∗
(18.530)
25.111∗∗∗
(4.904)
−96.692∗∗∗
(18.830)
27.921∗∗∗
(4.942)
−102.692∗∗∗
(18.619)
27.900∗∗∗
(4.550)
−102.532∗∗∗
(17.285)
27.250∗∗∗
(4.550)
−99.671∗∗∗
(17.285)
27.363∗∗∗
(4.605)
−100.327∗∗∗
(17.240)
1.679
(1.298)
21.929∗∗∗
(5.043)
−80.384∗∗∗
(19.209)
25
325
−79.619
163.237
25
325
−75.367
158.734
25
325
−60.674
133.347
25
319
−53.630
123.261
25
319
−51.879
121.758
25
319
−52.689
123.379
25
319
−52.689
125.379
25
319
−52.721
125.442
25
319
−52.767
127.534
25
319
−51.893
123.786
∗ p<0.1; ∗∗ p<0.05; ∗∗∗ p<0.01
Turning to the interpretation of the effects, the plots in figure 4 confirm the
positive, non-linear effect of the catholic worker’s movement and the liberals.
In contrast, the effect for the catholic party is less pronounced. More specifically, it becomes only significant when the executive is completely dominated
by the catholic party. Therefore, the result suggests that either the preferences
of the catholic party for family allowances were not substantively different
from the preferences of the radicals or, what is more likely, that there is still
a strong heterogeneity within the variable for catholic party that is not measured. Moreover, the negative effect of the social democrats is mirrored in the
lower right plot. However, the confidence bounds show that the effect is not
significant.
30
Figure 4: The Party Effects on the Introduction of Family Allowances
VI. Concluding Remarks
The paper contributes to the comparative welfare state literature by emphasizing the importance of sub-national welfare state development in federalist
states. I argued that ignoring the important role lower levels of government
in social policy legislation in federalist countries such as Switzerland leads to
misconceptions about the development of the welfare state. Focusing on the
introduction of social policies on the cantonal level, it becomes eveident that
the classification of Switzerland as a laggard is unjustified. The timing of the
introduction of family allowances as well as health and unemployment insurance policies in the Swiss cantons is a case in point as I demonstrated.
In addition, I shedding light on a case that has been seen as anomalous for
a long time in the comparative welfare state literature. Most scholars have
emphasized that the development of the Swiss welfare state was primarily determined by the setup of the political institutions. In contrast, I demonstrated
that party effects are the main determinant for the timing of social policy adaptation on the cantonal level. In brief, social policies were mainly undertaken
by members of the radical party and its left wing, the catholic worker’s movement and the catholic party. However, the specific effects of parties varied over
time due to ideological reorientations and inner party disputes as I outlined.
In contrast, political institutions, most notably direct democracy, are of less
importance on the cantonal level. This finding fits not well existing research
on the effect of direct democracy on social policy development on the national
level (cf. Wagschal and Obinger, 2000). In addition, the results suggest that
the effect of direct democracy changed over time. This aligns more with recent
research from the US case (Matsusaka, 2000).
However, the paper has some limits that need to be addressed in subsequent
research. I am going to outline three possible areas that seem to be of theoretical interest:
First, we are still in the dark with regard to the variance of social policy setups
in constituency units of federal states. First attempts to classify sub-national
welfare state regimes have been undertaken, at least for the Swiss case (Armingeon et al., 2004). However, comparative data within countries as well as between countries for the generosity of social policies in lower tiers of government over time is nonexistent. Without such data, we cannot assess to what
extend tax competition and direct democracy create a downward pressure for
social policy arrangements. This question is not only of interest for the classical federal nation state but also for supranational organizations such as the
European Union (Obinger et al., 2005b).
Second, we still lack good measures for direct democracy over time. In this
paper, signature requirements for initiatives and ”Landsgemeinden” served as
32
measures for direct democracy. However, data for referendums are not available but could give additional insights in the process of welfare state development in federal states. Without over-time measures, our ability to formulate
theories about the effect of direct democracy on social policy development is
limited.
A last subject of investigation that can gain theoretical insights aims at party effects. While the paper showed that the role of the social democrats in the legislation of cantonal social policies was limited, we do not know much about their
influence on subsequent development of social policy arrangements. More
specifically, once the insurance based system was in place, did the social democrats
try to extend the benefits of the contributory system or did they push for its
transformation in a tax-based system? In addition, how did changes in the ideological reorientation of other parties such as the radicals during the postwar
period affect cantonal social policy setups? These are only some questions that
have to be addressed in subsequent research.
33
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VII. Appendix
Table 5: Data and Sources
Variables
Measures & Sources
Health insurance laws
Geschäftsberichte des Bundesrates,
Hünerwadel (1927, 1938); Steinmann
(1973)
Degen (2005)
Geschäftsberichte des Bundesrates,
Aebi (1935), Law of 5 May 1935 (Obwalden)
Schaeppi (1974)
Felder (1993)
Population divided by land area; obtained
from HIST
Workers in second sector divided by workers in all sectors; data obtained from HIST
Funk and Gathmann (2011)
Workers in every branch of the second sector divided by number of firms in every
branch, then averaged over all branches of
the second sector; data obtained from HIST
Workers in branches watches, chemistry,
textile, steel and machinery and food production divided by workers in second sector; data obtained from HIST
Number of deaths of children within the
first year of age per 1000 lived births; data
obtained from HIST
Percent of population in age group below
20; data obtained from HIST
Old-age pension laws
Unemployment insurance laws
Family allowances
Executive (Cantons)
Population density
% second sector
Initiative
Average firm size
Size Export Sector
Infant Mortality
% Population <20 years
HIST: Historical Statistics of Switzerland
40