Social Policy Responses to Rising Inflation in Canada and the United States
Document Type
Article
Publication Date
1-2024
Publisher
Cambridge University Press
Source Publication
Social Policy and Society
Source ISSN
1474-7464
Original Item ID
DOI: 10.1017/S1474746423000222
Abstract
Social policies’ responsiveness to rising inflation depends in large part on whether they contain automatic indexation mechanisms, which ensure that the real value of wages and benefits expands during inflationary periods. Here we compare how the indexation of Canadian and U.S. policies on pensions, minimum wages, and food security have affected their responsiveness to the recent cost-of-living crisis. Three main conclusions emerge from our analysis. First, automatic indexation is not necessarily a silver bullet to avoid policy drift. Second, automatic indexation and its design are not the only factors that matter to determine whether high inflation leads to policy drift. Finally, in times of higher inflation, social programs that lack automatic indexation can avoid policy drift, as long as a strong political consensus allows for ad hoc social policy expansion capable of offsetting the negative effects of inflations on social benefits.
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-Share Alike 4.0 International License.
Recommended Citation
Béland, Daniel; Dinan, Shannon; Rocco, Philip; and Waddan, Alex, "Social Policy Responses to Rising Inflation in Canada and the United States" (2024). Political Science Faculty Research and Publications. 149.
https://epublications.marquette.edu/polisci_fac/149
Comments
Social Policy and Society, Vol. 23, No. 1 (January 2024): 163-175. DOI.