Resolving the Welfare State's Social Trilemma Ireland's experience and the role of In-Work Benefits

This dissertation examines the hypothesis that every welfare state faces a social trilemma, namely that a state can only achieve simultaneously two of the following three objectives, the reduction of social welfare expenditure, increasing employment and reducing poverty levels. All three policy objectives cannot be delivered concurrently and therefore each welfare state must prioritise two of the objectives at the expense of the third. This study examines this theory in the context of Ireland’s welfare state’s experience over the period 2008-2019 and in particular the role that its system of in-work benefits played. The study is divided into two parts, the first looks at macro level indicators examining changes in employment, relevant social welfare expenditure and changes in poverty, as well as changes in the Gini Coefficient. Based on this study and contrary to the welfare state’s social trilemma theory, Ireland achieved all three objectives of the social trilemma over the period 2009-2019. The second part of the study examines Ireland’s two main in-work benefits, the Working Family Payment, and the Back to Work Family Dividend to determine whether these benefits played a role in achieving the three policy objectives of the social trilemma over the period 2012-2019. The study examined employment duration, social welfare expenditure and poverty alleviation of over 143,000 Live Register claims. The research found that where WFP was in payment, lone parent households were in employment for longer, their incomes were larger and were delivered at less cost than equivalent jobseeker payments when compared to similar households who did not avail of an in-work benefit. These findings highlight that a welfare state’s system of in-work benefits can with the correct design contribute to achieving all three objectives of the social trilemma or at the very least smoothing the friction between them.