Industrial relations and welfare state are interrelated. On the basis of time-series data for 20 OECD countries, this paper discusses and tests the impact of industrial relations on social expenditures, including 'social pacts' as a means of combining wage moderation and welfare state reforms....

We assemble data from several different sources to examine the cross-national effects of inequality and trust on social expenditures. We find that the inequality between the middle classes and the poor (as measured by the 50/10 percentile ratio) has a small, positive impact in social spending;...