Measuring returns on social investment beyond here-and-now redistribution: A commentary on Parolin and Van Lancker’s response article

Abstract

Social policy research is truly interdisciplinary with academics from very different theoretical perspectives working together in fervent open-mindedness towards diverse methodological approaches. The exploration of social investment (SI) welfare provision is a clear example of this spirit of interdisciplinary engagement, having stirred up critical scholarly reception and debate over the past decade. On the one hand, some colleagues underscore the potential of SI policies to improve life chances. On the other hand, some researchers voice concerns about perverse unintended consequences of SI. The most worrying scholarly critique of SI is the conjecture that SI policies reinforce rather than alleviate inequality and poverty, because of the operation of so-called Matthew effects (MEs). Parolin and Van Lancker’s commentary on our article ‘The social investment litmus test: family formation, employment and poverty’ falls within the purview of the ME critique, with some extension to other shortcomings discussed in the literature. These criticisms certainly deserve engagement, and we are grateful to the editorial board of the Journal of European Social Policy for inviting us to do so fully. In our commentary, we commence with the multidimensionality of 21st-century welfare state provision. Subsequently, we turn to the welfare state’s carrying capacity, which we maintain needs to be taken into consideration for leveraging positive feedback mechanisms between the micro and the macro level of welfare provision. By so doing, we elaborate on the implications of our research approach for understanding MEs, with insights as to how they are exacerbated or mitigated through policy (in-)complementarities. We then discuss the importance of considering synergies between policies for an improved understanding of SI returns and possible source(s) of MEs. Finally, we turn to the misconception that capacitating SI policies and compensatory consumption-smoothing and poverty alleviation are somehow in competition with each other, and discuss the normative orientation underlying SI welfare provision.

Social investment as a conceptual framework for analysing well-being returns and reforms in 21st century welfare states

“…Also, quality ALMP can serve to mitigate the potential moral hazard predicament attached to out-of-work income buffers, improving instead of hindering job search and job matching (Ronchi, 2019). The effectiveness of any given policy, like ALMP, often depends on the availability of other social policies, such as childcare services in combination with other work-family reconciliation policies (Hemerijck and Plavgo, 2021;Nieuwenhuis, 2022).…”

“…Cantillon and Vandenbroucke, 2014). Partly due to the methodological challenges that such assessments pose, the study of longer-term effects of policy mixes, their synergies, their second-order effects on other life-course outcomes beyond disposable household income, as well as their indirect effects on the overall carrying capacity of the welfare state thereby receive less attention (Hemerijck and Plavgo, 2021). Political science scholars are increasingly reorienting to bottom-up electoral competition over welfare reform agendas by concentrating on the micro-level demand-side of the political process (Beramendi et al, 2015;Abou-Chadi and Immergut, 2019;Manow et al, 2018).…”

Education and active labour market policy complementarities in promoting employment: Reinforcement, substitution and compensation

“…On the one hand, social policies are analysed independently from one another, eliminating as much context as possible (e.g., Card et al, 2018 ). While this approach is useful for isolating the causal effect of one particular policy, it has been repeatedly recognised that welfare provision operates in an interconnected way and requires mutual consistency to operate effectively (Atkinson, 2010 ; Hemerijck & Plavgo, 2021 ; Vandenbroucke & Vleminckx, 2011 ). On the other hand, following the seminal work of Three Worlds of Welfare Capitalism by Esping‐Andersen ( 1990 ), welfare provisions are studied through the lens of welfare regimes emphasising policy interdependencies and path dependencies within them.…”

Basic Income and the Social Investment State: Towards Mutual Reinforcement?

“…In short, this second objective implies that the SI policy mix will become the central pillar of a fair society in which all individuals – but those who are disproportionately exposed to new social risks in particular – get the material means to pursue their own conception of the “good” life. In other words, SI aims at contributing to an emancipatory agenda that follows the liberal-egalitarian tradition of John Rawls and Amartya Sen (Hemerijck, 2017: 21; Hemerijck and Plavgo, 2021: 317).…”