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Anton Hemerijck -Political Economy

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Anton Hemerijck -Political Economy

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Anton Hemerijck -Political Economy

  1. 1. We all know exactly what to do, we just don’t know how to get re- elected (J.-C. Juncker) Really?? OECD, Paris 29 November 2019 1 Anton Hemerijck (EUI)
  2. 2. 1. A puzzle to explain 2. Taking “social investment” seriously 3. Welfare lessons from the Great Recession 4. Reform is difficult, but it happens! – the Dutch example – not about re-election but surviving hard times by turn- taking 5. Light-at-the-end-tunnel (cognitive-normative) reform discourse 2 Outline
  3. 3. 1. Glass half full? Employment trends in 11 selected OECD countries (% of working-age population; Source: OECD) 3 Denmark France Germany Italy Netherlands Poland Latvia Spain Sweden UK US 50 55 60 65 70 75 80 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
  4. 4. Children at risk of poverty or social exclusion 4 0% 10% 20% 30% 40% 50% 60% 70% EU27BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK 2005 2015 Source: Eurostat Glass half empty?
  5. 5. 5 Beyond the OECD Jobs Study (1994) tradeoff employment (y) equality (x) and size of welfare states (Hemerijck & Ronchi 2019)
  6. 6. 6 2. Taking social investment seriously ECEC stimulates children cognitive and social development and parental employment High educational attainment reinforces success in further education Better school and skills associated with higher employment and productivity ALMP and WLB policies for higher (female) employment, lower gender gaps and higher fertility Active ageing, lifelong learning and LTC induce higher exit age Extra-resources for poverty protection and prevention (Hemerijck 2017)
  7. 7. Number supported by welfare provision Average consumption per welfare client Number of workers (hours worked) Average productivity per worker 7 Welfare carrying capacity versus them-us neoliberal discourse Long-term strength of the economy and welfare provision increasingly contingent on social policy contribution to the (dynamic) productive ‘denominator’ side of the welfare equation, requiring a wider and more multidimensional ambit of policy interventions across the entire life course, beginning with children (Esping-Andersen et al., 2002)
  8. 8. Three complementary functions: • Raising the quality of lifelong human capital stocks and capabilities from the young to the old • Easing and improving gender-balanced flows of contemporary labour market transitions in line with life course dynamics to retain human capital • Upkeeping and upgrading inclusive minimum-income universal safety nets and social insurance as social (income) protection and macro-economic stabilization buffers over risky transitions to protect human capital 8 How: social investment stocks, flows and buffers (Hemerijck 2015, 2017)
  9. 9. Different policies performing synergic stock-flow-buffer functions to support citizens’ life-course transitions – Here and now: stock-flow-buffer policies work in conjunction to enhance current opportunities (ECEC and WLB); inclusive buffers with ALMP mitigate moral hazard) – Cumulative returns over time: policy synergies addressing one phase of the life course enhance capabilities in later stages (ECEC early investments in children -> future human capital gains in employment at lower inequality 9 Social investment policy-mix matters
  10. 10. • Automatic stabilizers work (if buffers inclusive) • Macroeconomic discretion matters • Social investment pays (stocks and flows) • Euro-membership not a blessing per se (pre- and post-crisis divergencies) • Social Europe: not yet a glass half-full? • Unthankful politics of deep crisis management (not about re- election) • Consensus democracies (PR) better able to flexibly maintain a politics of long-term [social investment reform] with electoral support (and stem the populist tide) • Are we turning the page on neoliberalism? I think so, slowly 10 3. Welfare Lessons from the Great Recession
  11. 11. • Highly financialized economy (major bank bailouts) • Requiring overnight EMU austerity • Housing, health, labour market, social security, pension and climate structural reform (2012 – 2019) • Structural reform enacted and delivered by (de facto) minority coalition [Rutte II VVD/PvdA 2012-2017] • Reform process: series of ‘social pacts’ progressively endorsed by ‘constructive opposition’ parties to seal cumulatively transformative policy change • Civic education spillover: deep crisis management is about making «tough but fair» compromises • «So what» losing election: it’s about turntaking across center 11 4. Longest Dutch government since 1945 in trying times
  12. 12. • Democracy unsafe if economy not able to provide jobs and goods to sustain acceptable standards of living • Little reason to panic: long-term success of high-spending EU welfare states as «productive constraint» for SI reform in knowledge economies and ageing societies • Recalibrating solidarity aligning: Piggy Bank insurance, Robin Hood redistribution, Gender-balanced [stepping-stone and second-chance] capacitation • E(M)U’s imperative to construct a «holding environment» for active and inclusive welfare states to prosper (for which ECB built a foundation) • Diverse societies and heterogeneous life course dynamics and risks better catered for in «consensus democracies» 12 5. Capacitating European solidarity – no marketing ploy
  13. 13. 13 Thank You! anton.hemerijck@eui.eu

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