Introduction

Austria is nowadays widely seen as possessing a highly developed, albeit mainly employment-related, social security system strongly based on the idea of status preservation of wage earners (Obinger and Tálos 2006). The foundations of this model date back to the late 19th and early 20th century when core branches of social insurance such as accident insurance (1887), health insurance (1888) and old-age pensions for white-collar workers (1906) were introduced in the Austrian-Hungarian Empire in an attempt to settle the ‘labor question’ (Arbeiterfrage). The basic objectives of public intervention in social affairs, the organizational principles (self-administration ), the mode of financing (social security contributions), and the structural make-up of the welfare system laid down at that time provided the guiding principles that underpinned the expansion of the welfare system in the 20th century (Hofmeister 1981; Tálos 1982). Benefits are tied to labor market participation , while the legacy of paternalist authoritarian policies is mirrored in occupationally fragmented and mandatory social insurance. Status preservation via earnings-related transfer payments, a lack of social services and the preservation of the male breadwinner model are core elements of the Austrian social security system giving rise to strong stratification effects in terms of gender and occupational status. With few exceptions, social insurance related benefits are financed entirely through social security contributions. Social assistance, by contrast, is a social safety net of the last resort based on subsidiarity and tied to a means-test.

Given this structural make-up, the standard account in the comparative welfare state literature depicts the Austrian welfare state as a prototypical Bismarckian or corporatist -Conservative welfare regime (Esp ing-Andersen 1990). The expansion of the Austrian welfare state during the trente glorieuses mainly affected the personal coverage and the level and spectrum of benefits offered by the various programs. Based on a Keynesian post-war consensus and building on the inherited Bismarckian system of social security, the goal of income support was universalized during the post-war period. A duopoly of pro-welfare state parties, consociational democracy and corporatism , as well as a Federal Constitution lacking institutional veto points, provided a political configuration highly conducive to welfare state expansion in the aftermath of World War II.