Abstract
This article investigates the link between social security spending and financial crises. In doing so, the article answers two questions: what are the trends in social security spending in the aftermath of a financial crisis, and what factors can possibly explain these changes? The article shows that social security regimes have often been born out of crisis. In addition, on average, social security spending increases over the course of a crisis; however, there is wide regional variation, with advanced countries exhibiting the most countercyclical spending. This article lends support to the idea that crises can be used as an occasion to improve and strengthen social security; in doing so, countries not only mitigate the worst effects of the crisis, but also create better social policy and improve long-term crisis preparedness.