In his 1990 publication of “three worlds of welfare capitalism”, Gosta Esping Anderson “based his typologies of welfare state on a comparative analysis of the social policy history in 18 OECD countries” (Ebbinghaus, 2012. p.4). As a result of this comparative analysis, he arrived at three typologies that were based on three principles of decomodification, social stratification and the private public-mix (Dowd, 2013).
Decomodification refers to the “degree to which individuals or families can uphold a socially acceptable standard of living independently of market participation” (Esping-Andersen, 1990, p.37). As regards stratification, Esping-Andersen views the welfare state as a system of social stratification itself; recognizing the state as a key agent in ordering social relations and determining the division of class and status (Esping Andersen, 1990).
Lastly, his categorization was based on the private-public mix which “entails the relative roles of the state, the family and the market in welfare provision” (Bambra, 2007, p.1098). These three principles led to the categorization of welfare states into liberal, conservative (also known as conservative-corporatist) and social democratic regimes.
In the liberal welfare regime, there is a belief that the market provides the greatest amount of prosperity and freedom hence there is a great reliance on market provision than state intervention (Harris, 2002). Market forces in this regime are what determine and establish the level of social security and act as a reward system for those who work the hardest (Isakjee, 2017). In this regime, workers are made to be dependent on the labor market as a result there is small decomodification effects or low levels of decomodification which results into few social rights (Esping-Andersen, 1990).
It is also characterized by low benefits as well as ‘means testing program’ which entails social rights and benefits being targeted at the most needy thereby forcing people to enter the labor market as their resort (Esping-Andersen, 1990). Lastly, it is a regime with a strong political right and a weak democracy (Esping-Andersen, 1990). In a Conservative welfare regime, there is middle level decomodification because they want to preserves traditional family-hood where state only intervenes when the capacity of the family is weak (Esping-Andersen, 1990).
Within this regime, there are more generous earnings related benefits which are contribution-based thus varying levels of benefits where different groups receive different levels of benefits (Isakjee, 2017). For instance, married couples receive more money than unmarried couples. In terms of the political structure, the conservative regime boosts of a relatively strong social democracy and political right (Esping-Andersen, 1990).
The social democratic welfare regime is characterized by principles of welfare universalism where the entire population is addressed (Esping-Andersen, 1990). This universalism comes about due to the high levels of decomodification found in this regime as a result of striving to make workers as independent as possible of the labor market.
Benefits/entitlements and social rights are conferred on people based on their citizenship at a more generous level and the services provided are well developed (Isakjee, 2017). The role of the state in welfare and employment provision is paramount in this regime as it enjoys a strong social democracy and weak political right (Esping-Andersen, 1990).