Reforming the Austrian Welfare System: Facing Demographic and Economic Challenges in a Federal Welfare State

Across Europe, the economic and fiscal crisis has deeply shaken the economy and created enormous challenges lasting up until today. Austria is no exception, but that did not lead to fundamental changes in social policies. The development of the Austrian welfare system in the past two decades is characterised by continuity rather than paradigmatic change—despite economic, fiscal and demographic challenges. Concepts that moved to the centre of welfare debates in many other countries, such as a stronger workfare orientation or the social investment state, had a smaller impact in this country than in many others. Also, welfare retrenchment played a weaker role. This is the consequence of multiple factors including a comparatively favourable economic development up until 2013, a relatively strong consensus orientation in the Austrian political system (and the population), or the complex mix of national and provincial roles in social policy making, i.e. circumstances that also tend to limit scope for more innovative or even path-breaking changes to the Austria welfare system.