Most comparative welfare state researchers divide the post-war era into two periods: a phase of construction and expansion, from 1945 to the mid-1970s; and one of consolidation and retrenchment, from the mid-1970s to the early years of the twenty-first century (Pierson, 2002). I wish to put forward an alternative periodisation by subdividing the post-war period until the early twenty-first century into three distinct phases of welfare state reconfiguration. These are: (1) the era of welfare state expansion and class compromise, starting at the end of World War II; (2) the period of welfare retrenchment and neoliberalism, which took shape in...

Long before the financial meltdown of autumn 2008 revealed the fundamental limits of financial deregulation and reliance on regulation by market relations, policy makers in many countries recognised that neoliberalism had reached its social policy limits. Rising child poverty rates and growing numbers of working poor, as well as gaps in benefit coverage and imbalances in programme financing, had already led social policy makers to rethink neoliberalism’s understanding of what relations ought to be among states and markets, communities and families. Indeed the mid-1990s brought the spread of new ideas about the social investment perspective (Jenson and Saint-Martin, 2003; see...

The debate on social investment and activation policies implies a new perspective on the relationship between different social policy areas. From this perspective, economic and social change together with the fiscal constraints they produce necessitate the redrawing of boundaries between ‘active’ and ‘passive’ social policies. It is assumed that the ‘passive’ welfare state is being steadily restructured into an ‘activating’ welfare state guided by a social investment perspective (see Chapters Two and Three). The social investment approach has been formulated in terms of redeploying public spending from passive social transfers to investments in education and training, labour market activation measures,...

In the 1990s a new approach to economic, employment and social policy emerged in the EU in the wake of the Economic and Monetary Union (EMU), to respond to low growth, to increase global competitiveness and to meet the challenges of ageing populations and new family patterns. An important component of this new approach was the European Employment Strategy (EES) formalised in 1997, in order to encourage member states to develop comprehensive, high-quality labour market policies to upskill workers’ competencies. The means included shifting expenditure from passive to active labour market policies and increasing employment rates, which should in turn...

Work–family reconciliation policies are a lynchpin of the social investment approach. High-quality early childhood education and care (ECEC) programmes invest in both the cognitive development of young children and the labour market skills of their mothers by enabling them to participate in paid work. Employment continuity also bolsters household income, reducing child poverty and its potentially enduring effects. Parental leave and flexible work time promote women’s paid work while enabling children to benefit from periods of parental care. Finally, ECEC services can be a source of employment for women who might otherwise struggle to find a foothold in the...

Active labour market policies (ALMPs) seem an obvious component of any social investment project. Rather than simply paying a replacement income to jobless people, an active labour market policy aims to make sure that unemployment spells are as short as possible, by proactively helping jobless people re-enter the labour market. Reducing the duration and the incidence of unemployment, or, more generally, of worklessness, is an objective that is perfectly consistent with the social investment perspective as defined by Jenson (see Chapter Three). ALMPs provide help to disadvantaged people (the jobless) and take a long-term perspective by reducing the scarring effect...

The argument for the social investment strategy depends on the ability of the strategy to produce employment and particularly employment in high-quality jobs, jobs that are attractive in terms of remuneration and in terms of quality of work. It is really that latter ambition that distinguishes the promise of the social investment strategy from a neoliberal strategy which creates employment by increasing wage dispersion and creating a large number of low-paid private service jobs in sectors such as hotels, restaurants and personal services, which has been the US path to high employment (Esping-Andersen, 1999).

Our analysis is an evaluation of...

The social investment perspective depends on correctly understanding the characteristics of the economy as a basis for identifying appropriate policies for promoting growth and competitiveness. In this chapter we start from a characterisation of the current phase of capitalism as a ‘globalising learning economy’, where the speed of adaptation and innovation is seen as crucial for the competitiveness of firms (Lundvall and Johnson, 1994; Archibugi and Lundvall, 2001). While the concept ‘the knowledge-based economy’ is associated with the need to invest in research and in the formal education of scientists and engineers, the learning economy signals the importance of institutional...

At different points in the life course families and individuals differ in both their needs and in terms of the resources they can command. Large shares of children require large expenditure on education and family resources. Large shares of young adults put the labour and housing markets under strain. In a stable population that would not make much of a difference to public policy since the relative shares of different age groups in that special case remain the same. But modern populations are far from stable. The demographic transition from high mortality and high fertility to a state of low...

This chapter discusses the prospects for social investment approaches in the wake of the worst financial crisis for more than 80 years.¹ It explores whether the pressures resulting from the crisis will prompt a reversal of social investment ideas and concepts aimed at changing the basic character of the welfare state from remedial to pre-emptive strategies.

The idea of social investment heavily influenced the European Union’s (EU) Lisbon Strategy. The Lisbon Strategy saw itself as representing a new synthesis of competitive markets, knowledge-based investment and strategies for social inclusion, advocating a break with the neoliberal mindset of the previous two...

Climate change is one of the major challenges facing humanity in the twenty-first century. Impacts and risks will grow over time and call for a double response: adaptation to new, often more severe climatic conditions; and a major transition to a low-carbon economy. Awareness of the potentially huge implications of climate change has grown in recent years, but attention from policy makers is still surprisingly limited outside the realm of environment and energy policy. This lack of attention is evident not least within the social policy community.

It is often observed that climate change tends to hit hardest those who...

In March 2010 the Commission published the new ten-year strategy for Europe, named ‘EU2020’.¹ In this chapter we compare the new strategy, ‘EU2020’, with the Lisbon Strategy that was agreed upon in 2000 in connection with the Portuguese Presidency. We also take into account the mid-term evaluation of the Lisbon Strategy as well as the Commission’s own final evaluation of the Lisbon Agenda.² The historical record of the Lisbon Strategy and the adequacy of the new strategy cannot be assessed without taking into account the current crisis of the European project: a crisis that involves not only high unemployment and...

We set out this book by asking a number of questions about the concept of social investment: What is it? Which policies can be associated with it? How does it perform? Is it relevant for the current and future challenges of modern welfare states? Behind these questions, there is of course a larger enterprise of searching for a strategy that would be able to regenerate the welfare state, promote social inclusion, create more and better jobs, and help address the challenges posed by the economic crisis, globalisation, population ageing and climate change. There is an underlying notion that the social...