Social investment and social policy innovation in a European Social Union. Frank Vandenbroucke Brussels 19 May 2014

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1 Social investment and social policy innovation in a European Social Union Frank Vandenbroucke Brussels 19 May 2014

2 Debates on social Europe Social Europe is an elusive concept Denial of existing acquis A European Welfare State, or a Union of Welfare States?

3 A European Social Union

4 A European Social Union A Social Union would support national welfare states on a systemic level in some of their key functions guide the substantive development of national welfare states via general social standards and objectives, leaving ways and means of social policy to Member States on the basis of an operational definition of the European social model. European countries would cooperate in a union with an explicit social purpose

5 A European Social Union Why? Eurozone EU28 Which solidarity? Social investment as a common ambition Social policy innovation: the macro view Conclusion

6 At-risk-of-poverty rate Child poverty: an excessive social imbalance DK SI FI NL SE CZ CY AT DE FR SK EE BE IE MT HU LU PL LT PT GR LV UK IT BG ES RO Child poverty 2007 (SILC 2008) Child poverty 2011, threshold 2007 (SILC 2008, 2012)

7 Excessive social imbalances Child poverty as a human capital investment deficit Education asymmetry Pension asymmetry

8 Employment rate 15-64, 2012 The human capital asymmetry (1) Few low-skilled High employment rate 75 DE SE AT NL DK CZ EE SI LV LT SK PL FI UK BG HU LU CY EU28 FR BE RO IE IT ES MT PT 50 Few low-skilled Low employment rate CR GR Many low-skilled Low employment rate % of population (15-64) with lower secondary education attainment, 2012

9 Employment rate 25-29, 2012, LFS The human capital asymmetry (2) AT NL LU PT LT LV SE DE FR PL DK CZ SI UK BE EE FI 70 RO SK HU IE 65 BG CR 60 IT ES 55 GR Average PISA results

10 The social investment imperative A social investment agenda (cf. Europe 2020, SIP) Child-centred social investment strategy Human capital investment push Reconciling work and family life Later and flexible retirement Migration and integration through education and participation Minimum income support and capacitating service provision The political deal the EU needs is one wherein all governments pursue budgetary discipline and social investment, and are supported therein in a tangible way by the EU.

11 Social policy innovation: the macro view Social investment as a way to overcome the service sector trilemma (Hemerijck): employment growth wage equality budgetary restraint Example of a macro experience: Belgian service vouchers

12 Idea Consult, RVA Service vouchers: employment impact , , , , , , , , , , , , , , , , , , , , , , , VTE Werknemers Aantal gebruikte cheques -

13 Service vouchers: evaluation a creative response to the trilemma? employment impact (mothers & employment) distributive impact (universal access to social security) budgetary impact (!) Quantity and quality, and the development of human capital

14 Social innovation: the case for progressive universalism and capacitating services Intelligent combinations of universalism and selectivity Capacitating service delivery

15 Conclusion (2): the case for a European Social Union support national welfare states on a systemic level in key functions (e.g. stabilization) guide the substantive development of national welfare states via general social standards and objectives => social investment, minimum wages and minimum income protection => solidarity in reform leaving ways and means of social policy to Member States a Union of Welfare States, with an explicit social purpose

16 Conclusion (2): the case for a European Social Union support national welfare states on a systemic level in key functions (e.g. stabilization) guide the substantive development of national welfare states via general social standards and objectives => social investment, minimum wages and minimum income protection => solidarity in reform leaving ways and means of social policy to Member States => stimulate best practice and policy innovation (mutual learning) a Union of Welfare States, with an explicit social purpose

17 Thank you! 1. Frank Vandenbroucke, with Bart Vanhercke, A European Social Union. 10 Tough nuts to crack, Friends of Europe, Spring ps/social_europe/03_03_14_report_socialunion_final_v.pdf 2. Anton C. Hemerijck en Frank Vandenbroucke, Social Investment and the Euro Crisis: The Necessity of a Unifying Social Policy Concept, Intereconomics. Review of European Economic Policy, Vol. 47 No. 4, July/August 2012, pp

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