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Social investment and the future of the welfare state

05 June 2015
Social investment and the future of the welfare state

“An ounce of prevention is worth a pound of cure.”
 
Government and policymakers have to find ways to manage the tension between a fast-moving, innovation-based economy and the risk of widening inequalities. The disruption associated with technological change and globalisation makes this as pressing as ever as major firms, jobs and industries will be swept away in the ‘perennial gale’ of economic change.
 
The social investment model of the welfare state is conceived as a means to address the central challenges of the high-skilled knowledge economy, and to ensure people have access to good jobs, education and skills. On the back of the European commission’s new emphasis on this approach and ahead of a conference in London, Policy Network and the Friedrich-Ebert-Stiftung publish a series of papers assessing this approach.
 
Hannelore Kraft, premier of the German state of North Rhine-Westphalia, documents the significant results of her programme of preventative spending which supports childhood development – from birth to the beginning of employment. Investments in prevention have reduced social costs and brought substantial economic returns in the long-run.
 
Colin Crouch, professor emeritus at the University of Warwick, welcomes the emphasis on prevention, documenting how north-western European countries with a strong social investment approach remain economically successful, with lower levels of inequality. But he cautions that protective and compensatory welfare states are still needed to give people the confidence to take risks in this disruptive new age.
 
Lisbeth Pedersen, head of research the Danish National Centre for Social Research, gives a perspective on the basis of a study into how the Nordic model needs to adapt up to 2030. Like elsewhere in Europe, there will be tension between combining a highly productive society and maintaining income transfer systems at current levels.
 
Finally, Hugh Frazer and Sebastiano Sabato of the European Social Observatory assess the current state of social investment in Europe in light of a new European commission report.


by HANNELORE KRAFT
Preventative policy pays off and carries the additional benefit of avoiding social follow-up costs
 

by COLIN CROUCH
Protective welfare states are still needed to give people the confidence to take risks in this disruptive new age

 

by LISBETH PEDERSEN
Regular welfare reform and sustaining a broad political consensus underlie its continuing strength but new structural challenges remain

 

by HUGH FRAZER and SEBASTIANO SABATO
What is the current state of social investment in Europe?
 


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