From Social Welfare Models to Social Investment Models

La comparazione dei sistemi di welfare europei
Prof. Maurizio Ferrera
Università degli Studi di Milano
Riprogettare il Welfare:
uno sguardo al Mediterraneo
Fondazione Cariplo e Compagnia di San Paolo
venerdì 29 novembre, Milano
Outline
 The way we were: the traditional “fordist” welfare
state and its variants
 The possible future: a new Social Investment (SI)
state
 Where are we now: summary data
 The role of SECOND WELFARE (“Second line allies”): a
focus on the third sector and on private foundations
2
The way we were: the «Fordist» welfare state
Common traits:
1. Emphasis on social protection (compensatory logic)
2. Ex post benefits for traditional risks/needs
3. Large role for «passive» transfers during non employment (pensions,
unemployment, disability, sickness, maternity, family dependants etc.)
4. Residual safety nets (poverty)
5. Target: households with various family members (female carers)
6. Education & training: outside social protection
3
Variations in the «fordist» theme
(regimes, models, families, clusters..)
1. Continental Europe:
4. Southern Europe:




Bismarckian insurance schemes (BIS) 
insider/outsider divide
transfer heavy, lean on services
male breadwinner model (MBM)
2. Anglo-Saxon Europe:



Beveridgean “encompassing” schemes, weak
universalism
Occupational/fiscal welfare for the middle classes
Means-tested benefits for the poor (including
working poor)  poverty cum exclusion
3. Nordic Europe:




Strong universalism
Service rich (including Active Labour Market
policies )  already a Social Investment element
Dual earner model (DEM)  female
employment, gender equality
Strong but limited safety nets  low poverty,
high inclusion



BIS + national health services 
insider/outsider divide
Transfer (pension) heavy, very lean on social
services
MBM + high familialism ( low “exclusion”)
Weak/non existent safety nets ( very high
poverty)
5. Central/Eastern Europe:
Transition from socialist collectivism
(productivist welfare model) to mixed models
(social insurance + residual safety nets, poor
services, female earner/carer model)  high
poverty and exlusion
 4. Southern Europe:
 BIS + national health services insider/outsider
divide
 Transfer (pension) heavy, very lean on social services
 MBM + high familialism ( low “exclusion”)
 Weak/non existent safety nets ( very high poverty)
5
Old Age benefits (1990)
Benefits received at retirement as a % of average net earnings of manual
workers in manufacturing (1990)
Country
Contributory pension
____________
Personal rate
Minimum Benefit
____________
Personal rate
Belgium
73
47
Denmark
60
52
Germany
77
39
France
88
46
Ireland
42
35
Luxembourg
78
46
Netherlands
49
49
United Kingdom
44
31
EUR 12
75
36
Greece
107
8
Spain
97
32
Italy
89
19
Portugal
94
30
Social minima in EU countries (1992)
Old-age*
Invalidity
Unemployed


Country
ECU /
month
% GDP per
head
ECU/month
% GDP per
head
ECU/month
% GDP
per head
Belgium
442.7
32
924,4
67
442.7
32
Denmark
599.7
34
967.4
55
699.7
40
Germany
506.7
29
506.7
29
506.7
29
France
447.5
30
447.5
30
322.1
22
Ireland
329.3
38
329.3
38
329.1
38
Luxembourg
607.8
36
863.9
51
607.8
36
Netherlands
553.3
41
552.3
41
552.3
41
United
Kingdom
363.2
30
376.3
31
263.4
22
EUR 12
377.03
28.75
511.51
38.00
310.33
21.67
Greece
49.1
10
79.3
16
0
0
Spain §
272.8
28
272.8
28
0
0
Italy §
230.5
16
695
49
0
0
Portugal
122.8
21
122.8
21
0
0
Notes:
* A single person who has reached the age of retirement with no entitlement to contributory benefits and no other source of income
 A single person aged 40 with no entitlement to contributory benefits, no other source of income and who is unable to work
 A single person aged 40 with no entitlement to contributory benefits, no other source of income and who is available for work
§ In Italy and Spain, there is no formal minimum level of income support, but in a number of regions, people can receive social assistance from regional and local authorities
Source European Commission (1993)
32,0
30,0
28,0
26,0
24,0
22,0
20,0
18,0
16,0
14,0
12,0
10,0
8,0
6,0
4,0
2,0
0,0
l
rt u
ga
Po
Ita
ly
ai
n
Sp
G
re
EU
-1
ec
e
1995
2011
5
% GDP
Social protection expenditure (1995-2011)
Source: Eurostat
8
 Nella slide precedente si può provare a inserire
dentro gli istogrammi la quota pensioni?
9
The way we ought to be?
The social investment state
 Was introduced in the debate by Esping Andersen et al. (Why
We Need a New Welfare State, 2001)
 Became popular in the context of the Lisbon Strategy (20002010) ….
 … with different meanings: orientation, paradigm, analytic
concept/framework, a rethorical platform
 Has been gradually endorsed by the EU, especially with the
shift from the Lisbon to the Europe 2020 agenda
 Is the object of a fully fledged «package» of measures
proposed by the European Commission
10
The Social investment state: core traits







Emphasis on social promotion (enablement logic)
Ex ante (early) prevention of risks and needs (ECEC)
Large role for capacitating social services during the life cycle
Robust safety nets and activation (inclusion)
Individuals within households (dual earner/dual carer model)
Support for reconciling paid work and family life
Education (schooling, training, LLL) as integral part of welfare
sphere
 Encouragement of «social innovation»
Social Investment: what rationale?




More growth: human capital + labour market participation
Better growth: knowledge based, quality jobs
More cohesion: safety nets, inclusion policies, elderly care
More equal opportunities: early child education and care,
work-life balance, capacitating services
 More social justice: containment of inter-generational
transmission of advantage/disadvantage, greater mobility
chances
Ratesof return toHUmn capitlInvstment: the
Heckman curve
Return to a dollar unit invested at
different ages fromthe perspective of
the beginning of life, assuming one
dollar initilly invested at each age
13
Social Investment spending by function: the state of play in
selected countries
TOTAL PUBLIC EXPENDITURE ON EDUCATION, 1995-2010 (% gdp)
8,00
7,00
6,00
5,00
1995
4,00
2010
3,00
2,00
1,00
Source: Eurostat
G
re
ec
e
ly
Ita
Sp
ai
n
an
y
G
er
m
EU
15
EU
27
Fr
an
ce
Po
rtu
ga
l
Sw
ed
en
0,00
Social Investment spending by function: the state of play in
selected countries
TOTAL PUBLIC EXPENDITURE ON FAMILY/CHILDREN, 1995-2010 (% gdp)
4,0
3,5
3,0
2,5
1995
2,0
2010
1,5
1,0
0,5
Source: Eurostat
ly
Ita
Po
rtu
ga
l
Sp
ai
n
EU
27
G
re
ec
e
EU
15
Fr
an
ce
Sw
ed
en
G
er
m
an
y
0,0
Social Investment spending by function: the state of play in
selected countries
TOTAL PUBLIC EXPENDITURE ON FAMILY/CHILDREN, 2005-2010 (per-capita,
pps)
1.000,00
900,00
800,00
700,00
600,00
500,00
400,00
300,00
200,00
100,00
0,00
2005
Source: Eurostat
ly
Po
rtu
ga
l
Ita
Sp
ai
n
EU
27
G
re
ec
e
Eu
15
Sw
ed
en
Fr
an
ce
G
er
m
an
y
2010
Social Investment spending by function: the state of play in
selected countries
TOTAL PUBLIC EXPENDITURE ON ALMP, 2005-2010 (% gdp)
1,2
1
0,8
2005
0,6
2010
0,4
0,2
Source: Eurostat
G
re
ec
e
ly
Ita
Po
rtu
ga
l
EU
15
EU
27
Sp
ai
n
Fr
an
ce
Sw
ed
en
G
er
m
an
y
0
Social Investment spending: the state of play in selected
countries
TOTAL PUBLIC EXPENDITURE ON EDUCATION, ALMP and FAMILY/CHILDREN,
2010 (% gdp)
12
10
Gdp%
8
6
4
2
Source: Eurostat
Fr
an
ce
Sw
ed
en
an
y
G
er
m
EU
27
EU
15
Po
rtu
ga
l
Sp
ai
n
ly
Ita
G
re
ec
e
0
Si possono mettere qui alcuni dati di
outcome: %povertà (anche children),
NEETs, female employment, unemployed
in receipt of benefits, posti in asili nido
ecc.? Per dire che le lacune del welfare
pubblico hanno conseguenze sociali
negative (anche % di figli che vivono a casa
dei gen)
19
Sothern European Social models: the
challenges
 Further recalibration of public social expenditure
towards «social investment»
 Budgetary constraints + increasing needs
 Need for a SECOND WELFARE, mobilizing additional
non public resources: household savings, private
sector (e.g. company welfare), non profit sector
20
WHY «SECOND» WELFARE
 - it comes after the historical develompent of FIRST
welfare, i.e. state-centred and state-funded social
protection during the long XX century
 - it complements FIRST welfare:
 - integrates/supplements existing public schemes
 - adds new schemes/measures in uncovered areas of
need
 Stimulates social innovation
 Does NOT replace FIRST welfare
21
SECOND WELFARE
 mix of innovative interventions mainly funded by non
public resources
 With a view to offering benefits and services new
social needs and new categories of vulnerable people
 Provided by a multiplicity of stakeholder
 Anchored to local contexts, but inserted in wider
networks (no «parochialism»)
 Carefully monitored and evaluated
22
The protagonists of SECOND WELFARE

Private insurance

Mutual funds

Non
public
financers
Mobilizing private
savings

Users

Social enterprises
Private companies

Cooperatives

Trade Unions

Voluntary sector

Interest associations

Regions

Non profit Foundations

Local

Charitable institutions
Erogatori di
prestazioni
governments non pubblici
Coordinamento
/regolazione/
monitoraggio/v
alutazione
M. Ferrera – Università di Milano e Centro Einaudi
2
Before working age
risks/needs
Working age
risks/needs
Post working age
risks/needs
I
welfare
II
welfare
Early
childhood, Education
Education
& Care
Service mix
e.g. Work-life
balance services
Social
insurance &
Health care
Service mix
e.g. Company
based welfare
Private provision
of services
Coordination
Pension
I pillar
LTC
Pension Service mix
II pillar
Pensio
n
III pillar
State
Public funds
Universalism
The Third Sector in Italy
In 2011, the third sector in Italy:
- 300.000 organizations
- with a financial weight of about 67 billions euros (4,3% of gdp)
- 5,7 millions people involved,
of which 681.000 employees and 271.000 contract workers,
3,4% of the labour force
25
Paid employment in the «social
economy» (% of total employment)
country
%
2002-2010
Austria
5.7
- 10.2
Belgium
10.3
+65.4
France
9.0
+16.8
Germany
6.3
+21.0
Netherlands
10.2
+10.9
UK
5.6
-4.6
Ireland
5.3
-36.4
Denmark
7.2
+21.6
Sweden
11.1
+146.6
Italy
9.7
+66.7
26
Italy: The role of foundations
In 2012, the FOB system:
- assets: 42 billions euros
- 965,8 millions euros spent on 22.000 interventions
 32 Community Foundations
- of which 15 in Lombardy, with 22,5 millions spent in 2012 to
support 2.300 social projects
27
 Dati sulla distribuzione funzionale interventi
fondazioni
28
Foundations and social innovation
 Not only financial support but also…
 Catalysts of multi-actor partnerships
 Innovative solutions and governance mechanisms
29
SECOND WELFARE: The challenges
 Inappropriate «nesting» between FIRST and SECOND
welfare
 Insufficient coordination: no «system», only isolated
experiments
 Territorial disparities and inequities
 Weak monitoring/evaluation
 Weak adhesion to the Social Investment approach
30
EU interest and activism on the fronts of
social innovation/social economy/social
businesses
 A Southern European Network on Second Welfare
experiences?
 2wel-South
31