European Welfare States’ Detour(s) to Social Investment

Since the end of the twentieth century, European welfare states have been reconfiguring the basic policy mixes upon which they were built after 1945. In the process, the overarching social policy objective has shifted from fighting unemployment in the 1990s to promoting employment participation through social investment. This chapter introduces the concept of social investment as a key to understanding recent welfare state change in Europe, in an attempt to move the debate beyond the well- established regime approach. The social investment turn has been variable and truncated, with major detours, often cutting across regime- specific legacies. This chapter spells out five European social (and non- social) investment reform trajectories: “vanguard” countries in Northern Europe, “bandwagoners” (for example, the Netherlands and the United Kingdom), “latecomers” such as Germany and Spain, “newcomers” from the Eastern EU periphery, and slow or “non- movers” like France and Italy. The chapter elaborates on the prospects for social investment in the EU after the Great Recession, divided between the fiscal limits imposed by austerity and the silver linings implicit in generous welfare provision, which may act as a “beneficial constraint” for ratcheting employment in sync with social inclusion.