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The Quest for Sustainable Social Policies in Ageing Societies

The Quest for Sustainable Social Policies in Ageing Societies . Joakim Palme Uppsala U niversity. Quest, denotes an undertaking, an exploit, or an experience involving hazards and requiring boldness.

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The Quest for Sustainable Social Policies in Ageing Societies

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  1. The Quest for Sustainable Social Policies in Ageing Societies Joakim Palme Uppsala University

  2. Quest, denotes an undertaking, an exploit, or an experience involving hazards and requiring boldness

  3. Quest, is used chiefly in poetry or elevated phrases to suggest days of chivalry and romantic adventure and implies a search or pursuit, always of something elusive and often unattainable

  4. Sustainabledevelopment ”Meets the needsof the present withoutcompromsing the abilityoffuture generations tomeettheirownneeds.” Common future, Brundtland report, 1987 • Ecological, economic, political, and social dimensions of good policy design

  5. Goals/functions of social policy • Redistribution • Insurance • Services • Investment

  6. The ageingcrisisand itsshadow

  7. Welfarestate in crisis:How to protect the rights whilstcontroling the costs? A study for the Council of Europe

  8. Cheap rights!

  9. Cheap rights or moretaxpayers?

  10. Increasing the number of tax payers: Nordic experience with dual-earnermodel and femaleemployment • improvingwork incentives in the tax system, as well as in the benefit systems • promotinghuman capitalinvestements (amongwomenandchildren) • subsidisingsocial services for children and frailelderly relatives • offeringemploymentopportunities

  11. Sustainablepolicies in ageingsocieties Report to the European Commission, Edited by Lindh and Palme

  12. Rethinking social policy in ageingsocieties Social security is strongly redistributive over the life cycle: the ageing of societies puts tough fiscal pressures on public spending The debate on ageing issues has been overly focussed on pension reforms and savings How social policy interact with fertility, education and labour supply is of vital concern: secure the future tax base!

  13. Education and Growth:Macromodel Statisticallysignificant relations • Educationexpenseshave a positive impact on GDP/capita • GDP/capita has a positive impact on averageyears of educationbut a negative impact on the GDP share of educationexpenses

  14. The EcononomicLife-Cycleanda future for Social Investment?

  15. Life-cycle deficit

  16. 1.5 1 0.5 Normalised by average labor income 30-49 0 90+ 0 10 20 30 40 50 60 70 80 -0.5 -1 Age USA (2003) Austria (2000) Sweden (2003) Source: NTA project2007: www.ntaccounts.org Institutional variation behind life cycle variation in the intergenerational transfer system Life cycle deficits per capita

  17. European futurebeyond the Lisbon Agenda

  18. Social investments Are aboutinvesting inan equal distribution of human capital in order to promote a goodeconomiclife-cycle for alland reduce the pre-redistributioninequality

  19. Agenda for a social investmentapproach Go beyond immediate responses to the current crisis not to reproduce the failures of the recent past. Global crisis in the financial system may change our views on what is possible. Human capital investments have been getting less attention in the debate. How can we rethink the future with the time horizon being prolonged by the issue of climate change?

  20. Publiclyfundedchild-careinvests in cognitive and social skillsessential for life chances of children Qualityofcompulsoryeducation – PISA studies ofcorecompetencies:reading, mathematics, science Skillneeds in advancedindustrialsocietieshavechanged –polarizationamongyouth is a reality and a threat The ”learningeconomy” requires a constantrenewingofcapabilities in firms and competencesofworkers Capability formation:A life courseperspective

  21. Cumulative Educational Spending Educational Spending 1995 Skill Acquisition Index Cumulative ALMP Spending in 1995 ECEC (cumulative daycare spending) Short Term Unemployment Replacement Bottom 5th Percentile Literacy Average Literacy Employment Levels in 1995 Discretionary Learning Employment Nelson and Stephens 2011:PoliciesOutcomes

  22. Sweden 2003 capita 2003

  23. USA 2003

  24. EU2020

  25. The strategy EU2020 puts forward three priorities: • Smart growth: developing an economy based on knowledge and innovation. • Sustainable growth: promoting a more resource efficient, greener and more competitive economy. • Inclusive growth: fostering a high-employment economy delivering social and territorial cohesion.

  26. Flaw of the EU 2020 Agenda:Howcanthe solefocus on expenditurecuts, generate the necessaryrevenue for a social investment approach?

  27. The Social Investment Pact The New Agenda from the EU Commission(Commissioner Lazlo Andor)

  28. Social Investment Pact • Social protection, investment, stabilization • Recommendation on earlychild-hoodeduc. • YouthPackage • EmploymentPackage • Elderlycare • Stabilization via EU Unemploymentinsurance • European Social Fund (ESF)

  29. Politicaleconomyof social investment • European social models are attempts to apply ‘strategies of cooperation’, time to revitalise, else no social cohesion • Social investment approach is unattainable and elusive, unlessboldness and willingness to takepolitical and other risks. This includesraisingenoughtaxes for massive social investment.

  30. Social policy context of social investment Keyconcepts in EU • Social cohesion • Social inclusion • Social capital • Social investment and protection • Social citizenship

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