The social investment litmus test: Family formation, employment and poverty

Abstract

Over the past decade, the notion of ‘social investment’ (SI) has gained considerable traction in the political debates over welfare state futures. The multifaceted character of SI policy interventions, the effects of policy complementarities and interactions for different social groups and generational cohorts, and the challenge of delineating effects across different time dimensions, we argue, are not (yet) properly addressed by current empirical research. This paper contributes to reorienting the measurement of SI returns into a longer-term perspective, conceptualising them as people’s work- and welfare- related outcomes. It operationalises in a novel fashion macro-level data across OECD countries to analyse the medium-term aggregate effects of SI stock, flow and buffer policies with a focus on arguably the most critical stages in the post-industrial life-cycle course: transition into employment and family formation. Our findings imply that the so-called ‘Matthew effects’, following the biblical proverb ‘to him that hath shall be given’, identified in previous research stem from a measurement of SI returns conceptualised in a short-term redistributive perspective. Moving on to longer-term returns to SI policies at the societal level reveals positive outcomes for families with children.

What a social investment ‘litmus test’ must address: A response to Plavgo and Hemerijck

“…Throughout the past decade, the notion that social policy should be applied as a tool to enhance the productive capacity of families, rather than to smooth consumption, has gained considerable traction under the label of social investment (SI). 1 Against lingering critiques of the usefulness of SI research, Plavgo and Hemerijck (2020) (hereafter PH) primarily present bivariate, cross-sectional correlations of nationallevel outcomes to provide what they call a 'social investment litmus test'. The authors claim to provide the 'first social science effort' to analyse correlations among policy indicators conceptualized as buffers, stocks and flows with national employment and poverty rates (p. 13).…”

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

“…In addition to analysing the here-andnow redistributive effects of specific policies, it is fundamental to recognize that social policies have effects (1) beyond redistribution; (2) over a longer term horizon; (3) through institutional complementarities and policy interactions; (4) also at a societal level through positive externalities reinforcing the welfare state's fiscal carrying capacity, in turn, generating (5) micro-level indirect feedback effects, potentially mitigating first-order ME effects. At a macro level, our research shows that SI policy availability targeted at families with children is positively associated with employment and lower poverty of this target population (Plavgo and Hemerijck, 2020). The identified associations between SI policies and work-and welfare-related outcomes for families with children point at strong regularities in the OECD countries, providing us with what amounts to a litmus test, if not the final word, with ample decisively indicative information that cannot be dismissed simply because of the use of cross-sectional data.…”

“…Thus, in the first layer of the WellSIRe methodology we focus on macro-level evidence, taking snapshots of macro regularities among crucial population subgroups that have been identified as particularly vulnerable to given risks. An example of this work is presented by our Litmus test article (Plavgo and Hemerijck, 2020), focusing on employment and poverty among families with children at an aggregate level across OECD countries. The initial findings from this aggregate perspective are promising: in countries with higher SIs targeted at families with children, the proportion of dual breadwinner families and female employment among this target population is higher and child poverty is lower.…”

“…Finally, there is the more general apprehension that the 'productivist' justification of SI policies displaces valuebased considerations of social justice and solidarity with a more limited cost-benefit efficiency calculus behind policy interventions (Laruffa, 2018;Lister, 2003;Nolan, 2013;Saraceno, 2015). Parolin and Van Lancker's (2021) commentary on our Journal of European Social Policy contribution 'The social investment litmus test: family formation, employment and poverty' (Plavgo and Hemerijck, 2020) falls squarely within the purview of the ME critique, with some extension to other shortcomings discussed in the literature. As we read it, Parolin and Van Lancker's response article articulates, in a nutshell, three main criticisms.…”

How to study the populist radical right and the welfare state?

“…For instance, the influential Varieties of Capitalism debate of the early 2000s (Hall and Soskice 2001;Iversen 2005) has forcefully argued that the relationship between the welfare state and markets is not necessarily a purely antagonistic one, as social policies can effectively contribute to and promote the formation of particular kinds of skills that in turn contribute to economic growth (see Iversen and Soskice 2019 for a recent update on this line of thought). The debate on the social investment welfare state model has also continued along these lines, emphasising that social investment policies focussing on the generation and maintenance of human capital as well as on the provision of sufficient 'buffers' can promote economic development, while also mitigating social inequalities (Esping-Andersen 2002;Hemerijck 2013Hemerijck , 2018Morel et al 2012;Plavgo and Hemerijck 2020). As social investment policies simultaneously address these different goals and as they are broadly popular, the 'party politics' of social investment cannot be easily matched to the traditional left-right scheme, but instead unfolds against the background of a more complex and multidimensional policy space (Garritzmann et al 2018;.…”