Cuts in social spending are psychologically damaging

There are substantial psychological gains to be had from having a strong welfare state, according to a joint report from City, University of London and the University of Warwick.

The study has also revealed that nearly half of citizens in Western Europe now report high levels of worry, but that social spending acts to reduce citizens’ worries about the future.

The authors suggest that the finding implies that something foundational, and currently not understood, appears to be going wrong within Western society.

Increase in national worry

To understand more about the levels of general worry in Western Europe, the authors – Dr Lucía Macchia, Lecturer in Psychology at City, and Andrew Oswald, Professor of Economics and Behavioural Science at the University of Warwick – used data on 280,000 randomly sampled citizens in 14 European nations between the years 2005 and 2022. The countries are Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, and the UK.

The researchers found that approximately 40% of citizens in Western Europe now report high levels of worry, and over time there has been a continuing upward trend in ‘national worry’.

They also saw that the percentage of people reporting extreme worry has increased at an underlying rate of almost 10 percentage points in the population in the last decade. A gradual secular rise in national worry was also visible in the data before COVID, the invasion of Ukraine, and the conflict in Gaza.

Link between worry and social spending

The authors also examined data on the whole OECD. The authors show that of all the OECD nations, the UK had the fastest growth in worry levels between 2010 and 2019 (before the special COVID years in which data comparisons become less reliable). Costa Rica had the next-highest growth in worry.

The UK also had the strongest decline in social spending across the European nations studied by the authors, and one of the strongest in the OECD. All social spending levels in the authors’ report were calculated relative to GDP.

Despite the discovery of these empirical patterns, the researchers have not been able to establish what is causing the underlying annual increases in the amount of worry in industrialized countries, and it is not due to concerns over climate change, the growth of the internet or the ageing population, despite the old removing comparatively low levels of worry.

Foundational issue

Dr Macchia said:

We have found that something foundational, and currently not understood, appears to be going wrong within Western society. This is true even beyond Western Europe. Our paper shows that large numbers of citizens in Western Europe suffer from high, and apparently steadily rising, levels of worry. These nations are arguably among the most prosperous and safest in history. That makes the phenomenon documented in this paper a perplexing and troubling one. The worry time-trend is substantial and predates the influence of the COVID pandemic period. Similar patterns hold true of the OECD as a whole.