Hostname: page-component-8448b6f56d-gtxcr Total loading time: 0 Render date: 2024-04-16T20:38:13.171Z Has data issue: false hasContentIssue false
  • English
  • Français

Social Investment and Poverty Reduction: A Comparative Analysis across Fifteen European Countries

Published online by Cambridge University Press:  13 April 2015

OLAF VAN VLIET  and
CHEN WANG
OLAF VAN VLIET
Affiliation:
Department of Economics, Leiden University, PO Box 9520, 2300 RA Leiden, The Netherlands email: o.p.van.vliet@law.leidenuniv.nl
CHEN WANG
Affiliation:
Department of Economics, Leiden University, PO Box 9520, 2300 RA Leiden, The Netherlands email: c.wang@law.leidenuniv.nl
Get access Rights & Permissions [Opens in a new window]

Abstract

Despite the fact that employment rates have increased in many European countries since the beginning of the 2000s, poverty rates have stagnated and in some countries even increased. In the welfare state literature, it has been argued that these disappointing poverty trends may be partly attributable to the reforming of traditional welfare state programmes into social investment policies, because the latter are less redistributive. To date, there are only a few systematic comparative empirical analyses which focus on the outcomes of social investment policies. This paper contributes to the social investment literature by empirically analysing the distributional effects of shifts from traditional welfare state arrangements to social investment policies in fifteen European countries for the period 1997–2007. Our results suggest that the detrimental effect of social investment policies, described in some specific cases in the literature, cannot be generalised across a larger group of European countries. However, for European countries other than the Nordic countries, the results provide some evidence for a linkage between stagnating or increasing poverty trends and shifts in expenditures to new welfare state programmes.

Type
Articles
Information
Journal of Social Policy , Volume 44 , Issue 3 , July 2015 , pp. 611 - 638
Copyright
Copyright © Cambridge University Press 2015 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Alderson, A. and Nielsen, F. (2002), ‘Globalization and the great U-turn: income inequality trends in 16 OECD countries’, American Journal of Sociology, 107: 1244–99.CrossRefGoogle Scholar
Alesina, A. and Rodrik, D. (1994), ‘Distributive politics and economic growth’, Quarterly Journal of Economics, 109: 2, 465–90.CrossRefGoogle Scholar
Atkinson, A. B. (2010), ‘Poverty and the EU: the new decade’, Macerata Lectures on European Economic Policy, Macerata: Universita degli Studi di Macerata.Google Scholar
Beck, N. and Katz, J. N. (1995), ‘What to do (and not to do) with time-series-cross-section data’, American Political Science Review, 89: 3, 634–47.CrossRefGoogle Scholar
Bonoli, G. (2006), ‘New social risks and the politics of post-industrial social policies’, in Armingeon, K. and Bonoli, G. (eds.), The Politics of Post-Industrial Welfare States: Adapting Post-War Social Policies to New social Risks, London and New York: Routledge, pp. 3–26.Google Scholar
Bonoli, G. (2012), ‘Active labour market policy and social investment: a changing relationship’, in Morel, N., Palier, B. and Palme, J. (eds.), Towards a Social Investment Welfare State? Ideas, Policies ans Challenges, Bristol: Policy Press, pp. 181–204.Google Scholar
Bradley, D., Huber, E., Moller, S., Nielsen, F. and Stephens, J. D. (2003), ‘Distribution and redistribution in postindustrial democracies’, World Politics, 55: 193–228.CrossRefGoogle Scholar
Brady, D. (2005), ‘The welfare state and relative poverty in rich western democracies, 1967–1997’, Social Forces, 83: 4, 1329–64.CrossRefGoogle Scholar
Brandolini, A. and Smeeding, T. M. (2009), ‘Income inequality in richer and OECD countries’, in Salverda, W., Nolan, B. and Smeeding, T. M. (eds.), The Oxford Handbook of Economic Inequality, Oxford: Oxford University Press.Google Scholar
Brown, R. and Prus, S. (2003), Social Transfers and Income Inequality in Old-Age: A Multi-National Perspective?, LIS Working Paper Series 355.Google Scholar
Cantillon, B. (2011), ‘The paradox of the social investment state: growth, employment and poverty in the Lisbon era’, Journal of European Social Policy, 21: 5, 432–49.CrossRefGoogle Scholar
Cantillon, B. and Van Lancker, W. (2012), ‘Solidarity and reciprocity in the social investment state: what can be learned from the case of Flemish school allowances and truancy?’, Journal of Social Policy, 41: 4, 657–75.CrossRefGoogle Scholar
Caminada, K., Goudswaard, K. P. and Koster, F. (2012), ‘Social income transfers and poverty: a cross country analysis for OECD countries’, International Journal of Social Welfare, 21: 2, 115–26.CrossRefGoogle Scholar
Checchi, D. and García-Peñalosa, C. (2008), ‘Labour market institutions and income inequality’, Economic Policy, 23: 56, 1–49.CrossRefGoogle Scholar
Corluy, V. and Vandenbroucke, F. (2014), ‘Individual employment, household employment, and risk of poverty in the European Union: a decomposition analysis’, in Cantillon, B. and Vandenbroucke, F. (eds.), Reconciling Work and Poverty Reduction: How Successful Are European Welfare States?, Oxford: Oxford University Press, pp. 94–130.CrossRefGoogle Scholar
Dafermos, Y. and Papatheodorou, C. (2013), ‘What drives inequality and poverty in the EU? Exploring the impact of macroeconomic and institutional factors’, International Review of Applied Economics, 27: 1, 1–22.CrossRefGoogle Scholar
Davidson, C., Martin, L. and Matusz, S. (1999), ‘Trade and search generated unemployment’, Journal of International Economics, 48: 2, 271–99.CrossRefGoogle Scholar
Deleeck, H., Huybrechs, J. and Cantillon, B. (1983) Het Matteüseffect. De ongelijke verdeling van de sociale overheidsuitgaven in België. Antwerpen: Kluwer.Google Scholar
De Deken, J. (2014), ‘Identifying the skeleton of the social investment state: defining and measuring patterns of social policy change on the basis of expenditure data’, in Cantillon, B. and Vandenbroucke, F. (eds.), Reconciling Work and Poverty Reduction: How Successful Are European Welfare States?, Oxford: Oxford University Press, pp. 260–85.CrossRefGoogle Scholar
European Council (2000), ‘Presidency Conclusions’, Lisbon European Council, 23–24 March 2000.Google Scholar
European Commission (2010), Europe 2020: A Strategy for Smart, Sustainable and Inclusive Growth, Communication COM (2010) 2020, Brussels: European Commission.Google Scholar
Eurostat (2011), SILC-database, Brussels: Eurostat.Google Scholar
Forbes, K. J. (2000), ‘A reassessment of the relationship between inequality and growth’, American Economic Review, 90: 4, 869–87.CrossRefGoogle Scholar
Ghysels, J. and Van Lancker, W. (2011), ‘The unequal benefits of activation: an analysis of the social distribution of family policy among families with young children’, Journal of European Social Policy, 21: 5, 472–85.CrossRefGoogle Scholar
Gustafsson, B. and Johansson, M. (1999), ‘In search of smoking guns: what makes income inequality vary over time in different countries?’, American Sociological Review, 64: 4, 585–605.CrossRefGoogle Scholar
Hemerijck, A. (2013), Changing Welfare States, Oxford: Oxford University Press.Google Scholar
Huber, E. and Stephens, J. D. (2014), ‘Income inequality and redistribution in post-industrial democracies: demographic, economic and political determinants’, Socio-Economic Review, 12: 2, 245–67.CrossRefGoogle Scholar
Hudson, J. and Kühner, S. (2009), ‘Towards productive welfare? A comparative analysis of 23 OECD countries’, Journal of European Social Policy, 19: 1, 34–46.CrossRefGoogle Scholar
Immervoll, H. and Richardson, L. (2011), Redistribution Policy and Inequality Reduction in OECD Countries: What Has Changed in Two Decades?, OECD Social, Employment and Migration Working Papers 122.CrossRefGoogle Scholar
Jenson, J. (2012), ‘Redesigning citizenship regimes after neoliberalism: moving towards social investment’, in Morel, N., Palier, B. and Palme, J. (eds.), Towards a Social Investment Welfare State? Ideas, Policies and Challenges, Bristol: Policy Press, pp. 61–87.Google Scholar
Kenworthy, L. (2011), Progress for the Poor, Oxford: Oxford University Press.CrossRefGoogle Scholar
Kenworthy, L., and Pontusson, J. (2005), ‘Rising inequality and the politics of redistribution in affluent countries’, Perspectives on Politics, 3: 3, 449–71.CrossRefGoogle Scholar
Korpi, W. and Palme, J. (1998), ‘The paradox of redistribution and strategies of equality: welfare state institutions, inequality, and poverty in the western countries’, American Sociological Review, 63: 5, 661–87.CrossRefGoogle Scholar
Lam, D. (1997), ‘Demographic variables and income inequality’, in Mark, R. R. and Stark, O. (eds.), Handbook of Population and Family Economics, Amsterdam: Elsevier Science BV, pp. 1015–59.CrossRefGoogle Scholar
Lundvall, B. and Lorenz, E. (2012), ‘Social investment in the globalising learning economy: a European perspective’, in Morel, N., Palier, B., and Palme, J. (eds.), Towards a Social Investment Welfare State? Ideas, Policies and Challenges, Bristol: Policy Press, pp. 235–57.Google Scholar
Mahler, V. A. (2004), ‘Economic globalization, domestic politics, and income inequality in the developed countries’, Comparative Political Studies, 37: 9, 1025–53.CrossRefGoogle Scholar
Martin, C. J. and Swank, D. (2012), The Political Construction of Business Interests: Coordination, Growth and Equality, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Marx, I., Vandenbroucke, P. and Verbist, G. (2012), ‘Can higher employment levels bring down poverty in the EU? Regression-based simulations of the Europe 2020 target’, Journal of European Social Policy, 22: 5, 472–86.CrossRefGoogle Scholar
Moller, S., Bradley, D., Huber, E., Nielsen, F. and Stephens, J. D. (2003), ‘Determinants of relative poverty in advanced capitalist democracies’, American Sociological Review, 68: 1, 22–51.CrossRefGoogle Scholar
Morel, N., Palier, B. and Palme, J. (2012), ‘Beyond the welfare state as we knew it?’, in Morel, N., Palier, B., and Palme, J. (eds.), Towards a Social Investment Welfare State? Ideas, Policies and Challenges, Bristol: Policy Press, pp. 1–30.Google Scholar
Nelson, M. and Stephens, J. D. (2012), ‘Do social investment policies produce more and better jobs?’, in Morel, N., Palier, B. and Palme, J. (eds.), Towards a Social Investment Welfare State? Ideas, Policies and Challenges, Bristol: Policy Press, pp. 205–34.Google Scholar
OECD (2008), Growing Unequal? Income Distribution and Poverty in OECD Countries, Paris: OECD.Google Scholar
OECD (2009), Employment Database, Paris: OECD.Google Scholar
OECD (2011), Divided We Stand: Why Inequality Keeps Rising, Paris: OECD.Google Scholar
OECD (2012a), Social Expenditure Database 1980–2007, Paris: OECD.Google Scholar
OECD (2012b), National Accounts, Paris: OECD.Google Scholar
OECD (2012c), Labour Force Statistics Database, Paris: OECD.Google Scholar
OECD (2012d), Main Economic Indicators, Paris: OECD.Google Scholar
OECD (2012e), Education Statistics Database, Paris: OECD.Google Scholar
Paetzold, J. and Van Vliet, O. (2014), ‘EU coordination and the convergence of domestic unemployment schemes’, Journal of Common Market Studies, 52: 5, 1070–89.CrossRefGoogle Scholar
Pintelon, O., Cantillon, B., Van den Bosch, K. and Whelan, C.T. (2013), ‘The social stratification of social risks: the relevance of class for social investment strategies’, Journal of European Social Policy, 23: 1, 52–67.CrossRefGoogle Scholar
Pontusson, J., Rueda, D. and Way, C. (2002), ‘Comparative political economy of wage distribution: the role of partisanship and labour market institutions’, British Journal of Political Science, 32: 281–308.CrossRefGoogle Scholar
Rueda, D. and Pontusson, J. (2000), ‘Wage inequality and varieties of capitalism’, World Politics, 52: 350–83.CrossRefGoogle Scholar
Samuelson, P. (1971), ‘Ohlin was right’, Swedish Journal of Economics, 73: 4, 365–84CrossRefGoogle Scholar
Scruggs, L., Detlef, J. and Kuitto, K. (2014), ‘Comparative welfare entitlements dataset 2: version 2014–03’, University of Connecticut & University of Greifswald.Google Scholar
Taylor-Gooby, P. (2004), ‘New risks and social change’, in Taylor-Gooby, P. (ed.), New Risks, New Welfare: The Transformation of the European Welfare State, Oxford: Oxford University Press, pp. 1–28.CrossRefGoogle Scholar
Taylor-Gooby, P., Gumy, J. M. and Otto, A. (2015), ‘Can “New Welfare” address poverty through more and better jobs?’, Journal of Social Policy, 44: 1, 83–104.CrossRefGoogle Scholar
Thewissen, S., Wang, C. and Van Vliet, O. (2013), ‘Sectoral trends in earnings inequality and employment: international trade, skill-biased technological change, or labour market institutions?’, LIS Working Paper Series 595.CrossRefGoogle Scholar
Vaalavuo, M. (2013), ‘The redistributive impact of “old” and “new” social spending’, Journal of Social Policy, 42: 3, 513–39.CrossRefGoogle Scholar
Van Kersbergen, K. and Hemerijck, A. (2012), ‘Two decades of change in Europe: the emergence of the social investment state’, Journal of Social Policy, 41: 3, 475–92.CrossRefGoogle Scholar
Van Lancker, W. and Ghysels, J. (2012), ‘Who benefits? The social distribution of subsidized childcare in Sweden and Flanders’, Acta Sociologica, 55: 2, 125–42.CrossRefGoogle Scholar
Van Rie, T. and Marx, I. (2012), ‘The European Union at work? The European employment strategy from crisis to crisis’, Journal of Common Market Studies, 50: 2, 335–56.CrossRefGoogle Scholar
Van Vliet, O., Been, J., Caminada, K. and Goudswaard, K. (2012), ‘Pension reform and income inequality among older people in 15 European countries’, International Journal of Social Welfare, 21: 4(s1), S8–S21.CrossRefGoogle Scholar
Van Vliet, O. and Caminada, K. (2012), ‘Unemployment replacement rates dataset among 34 welfare states 1971–2009: an update, extension and modification of Scruggs’ Welfare State Entitlements Data Set’, NEUJOBS Special Report No. 2, Leiden University.CrossRefGoogle Scholar
Van Vliet, O. and Koster, F. (2011), ‘Europeanization and the political economy of active labour market policies’, European Union Politics, 12: 2, 217–39.CrossRefGoogle Scholar
Vandenbroucke, F. and Vleminckx, K. (2011), ‘Disappointing poverty trends: is the social investment state to blame?’, Journal of European Social Policy, 21: 5, 450–71.CrossRefGoogle Scholar
Wallerstein, M. (1999), ‘Wage setting institutions and pay inequality in advanced industrial societies’, American Journal of Political Science, 43: 649–80.CrossRefGoogle Scholar
Wang, C., Caminada, K. and Goudswaard, K. (2012), ‘The redistributive effect of social transfer programs and taxes: a decomposition across countries’, International Social Security Review, 65: 3, 27–48.CrossRefGoogle Scholar
Wang, C., Caminada, K. and Goudswaard, K. (2013), ‘Income redistribution in 20 countries over time’, International Journal of Social Welfare, 23: 3, 262–75.CrossRefGoogle Scholar
Wang, J. and Van Vliet, O. (2014), ‘Social assistance and minimum income benefits: benefit levels, replacement rates and policies across 33 countries, 1990–2009’, Department of Economics Research Memorandum 2014.04, Leiden University.CrossRefGoogle Scholar