Social Investment, the New Beveridge?

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CBG 1.06, Centre Building, LSE


Professor Anton Hemerijck

Professor Anton Hemerijck


Dr Bob Hancké

Dr Bob Hancké

A major impetus behind the 1942 and 1944 Beveridge reports was that the Great Depression and Keynesian macroeconomic in its wake made William Beveridge see social risks ‘in a different light’.

From this experiential-ideational vantage point, Beveridge believed that compulsory social security – the core innovation of the post-welfare state – would at the same time stabilize macro-level effective demand while mitigating micro-level household poverty, in times of demand-deficient hikes in unemployment.  Over the past decade, the notion of social investment has gained considerable traction in the political debates over welfare state futures. It can be argued, in analogy to the Beveridgean welfare state, the social investment paradigm has its origins in seeing the changing nature of social risks ‘in a different light’, bearing on important changes in post-industrial advanced economies and societies,  most notably intensified international economic interdependence, skill-biased technological change, the feminization of the labour market, and demographic ageing. 

This contribution traces the evolution of the social investment edifice as a sui generis welfare policy paradigm from the cognitive lead of seeing social reality ‘in a different light’. Although public social spending levels have been consolidated over the past two decades, most European welfare states have been recalibrating and reconfiguring the elementary policy mixes upon which they were built after World War II in a social investment direction. In the process, the overarching social policy objective has shifted from consumption smoothing to promoting employment participation, although the extent of this shift varies from country to country. In a generic sense, SI reform tilts the welfare balance from ex-post compensation in times of economic or personal hardship to ex-ante risk prevention, based on three core policy function: (1) fostering life-long human capital stock development; (2) easing the flow of gendered and family life course transitions; and (3) upholding inclusive social protection buffers in times of need. Empirically, unsurprisingly the social investment turn has been variable and truncated with major detours, often cutting across regime-specific legacies. Taking stock of recent developments occurred before and after the economic crisis, this contribution attempts to move the debate beyond the well-established regime approach. There may even be a – paradoxical – silver lining to high-spending EU welfare state acting as a “productive constraint” to pro-actively leverage social investment reform for ratcheting employment growth in synch with social inclusion on an ideological platform of capacitating solidarity.


Anton Hemerijck is Professor of Political Science and Sociology at the European University Institute.

Bob Hancké is Associate Professor in Political Economy at the European Institute, LSE.