COVID-19 crisis increases pressure on social protection systems worldwide

Government measures against the coronavirus, in particular nationwide lockdowns, have at times suspended the mechanisms of the market economy. Through no fault of their own, many people found themselves without work or income overnight. A research team at the Max Planck Institute for Social Law and Social Policy has investigated how strongly and successfully social law has helped to secure livelihoods during the pandemic. In collaboration with legal scholars worldwide, 21 countries in five continents were examined, including Germany, Sweden, China, Australia, Brazil, South Africa and Russia.

The book "Protecting Livelihoods—A Global Comparison of Social Law Responses to the COVID-19 Crisis," which is available open access, presents the first systematic legal analysis of the particular social protection dimension of crisis responses worldwide. It sets out whether and how the social law measures taken during the pandemic corresponded with existing welfare state systems as well as the particular challenges countries faced in implementing their crisis response. The study also explores how the relationship between collective risk and individual responsibility was negotiated during the crisis and whether long-term changes to each welfare state can be expected from the experiences of the pandemic.

Despite their very different welfare systems, the countries studied reacted to the pandemic with similar measures, most of which were financed by taxes. In particular, wage replacement benefits and short-time work schemes helped to preserve a large number of jobs and to stabilize employees' incomes. Companies were helped with low-interest loans, loan guarantees and a deferral of the payment of taxes, social security contributions and debts in general.

The measures to combat the pandemic posed a particular threat to the livelihoods of atypical workers, including, among others, those in the informal sector and platform workers. The self-employed also often fell between the cracks. In particular, welfare states with traditional social insurance systems were not equipped to adequately integrate the latter into the existing regulatory framework. The special support for the self-employed required against this background broke with the logic of entrepreneurial self-responsibility that dominates the market economy. Collective responsibility and social solidarity took its place.

In all the countries investigated, the pandemic acts as a magnifying glass that clearly reveals the strengths and weaknesses of social protection systems—especially since the responses to the pandemic did not produce significant changes in their structures. Thus, the crisis has increased the pressure on many countries to reform their social protection systems to better meet current and future demands.