Section: Research Projects
ESRC Welfare Markets and Personal Risk Management
Welfare Markets and Personal Risk Management in England and Scotland
Research Team
- Jochen Clasen (PI)
- Alison Koslowski (CI)
- Traute Meyer (CI, University of Southampton)
- Stephan Köppe (Research Fellow)
- Caroline Andow (Senior Research Assistant, University of Southampton)
For any inquiries concerning the project, please contact the project members.
Project period: October 2009 – November 2011
Recent Activities
Currently, we are organising a dissemination seminar of our project results. We plan to discuss our findings with practitioners in government and the financial sector. The seminar will take place at the Royal Society of Arts (London) on the 24th November 2011. Please go to the seminar website for further details.
Stephan Köppe and Alison Koslowski contributed recently to the Rethinking Retirement Seminar Series:
Please see also the related social policy news.Summary
The project investigates risk management strategies of middle-income households in England and Scotland. In the UK especially those with above average incomes are often assumed to have access to or seek private forms of risk protection, partly based on company provision, such as pensions, or private voluntary protection, such as insurances, home ownership or inheritance, complementing or substituting public social protection. Indeed, private welfare markets have remained an important source of risk coverage. Moreover, notwithstanding some setbacks (most significantly the retrenchment of occupational pensions in the private sector), many sectors have expanded since the early 1990s. On the other hand, despite being financially able, many households fail to arrange insurance which would protect them against the loss or significant reduction of income, such as unemployment, accidents or illness, or adequately cover contingencies, such as retirement or the costs of children. There thus seems to be a considerable gap between the assumption that people make long term rational choices and citizens' actual risk management motivations and behaviour. Moreover, the recent financial turmoil and expected economic recession might influence voluntary personal social protection, potentially leading to a halt or contraction of the scope of private welfare as a whole, or of particular types of market based risk protection. This is where our project is located. It seeks to answer how and why some middle class households plan for contingencies and engage in private risk management strategies while others do not. It also compares England and Scotland, potentially uncovering distinctive patterns of attitudes and behaviour.
Employing quantitative as well as qualitative methods, the project adopts a broad approach. It covers both public and private forms of risk protection, and it analyses attitudes towards risks and contingency cover as well as actual risk management behaviour. In a first step we aim to review Britain's current 'mixed economy of welfare' in key areas: unemployment, accidents, cost of children, loss of a home, retirement and infirmity in old age. We will map the types of statutory protection against such risks and contingencies and examine changes in the scope of public provision (generosity; eligibility criteria). In parallel, we will examine the scope of non-statutory (occupational and personal) provision for particular socio-economic groups, investigating how 'private welfare markets' have developed in the domains listed above since the start of the economic recovery in the early 1990s. The second phase is based on quantitative data analysis, making use of existing nationally representative data sets on expenditure, savings and investment behaviour in insurances and private market-based contracts for risk protection of middle-income households in England and Scotland. The aim is to contribute to the understanding of the influences on various risk management motivations and behaviours. We will be able to do this over time and across cohorts. Finally, in a third stage conducting qualitative interviews, we explore personal risk management strategies of socially and economically similar middle-income households from Scotland and England. This stage will also explore the potential ramifications of the most recent financial uncertainties and economic downturn. The main aim is to develop a typology of risk management rationales that guide household economies. In these interviews respondents will have the opportunity to elaborate on what 'risk' and 'risk management' means to them personally, how much long term security they perceive to need, how much they value public protection and in which ways they engage in private risk-management behaviour.
Advisory Board
- Prof Karen Rowlingson (Institute of Applied Social Studies, University of Birmingham)
- Dr Rebecca Driver (former Director of Research and Chief Economist, Association of British Insurers)
- Dr Alexander Koslowski (Bright Grey Insurers)
Link to the grant homepage at ESRC (RES-062-23-1954).
This page was published on 16 November 2011