Changing labour markets, changing welfare across the OECD: the move towards a social investment model of welfare as a response to competition

This chapter examines in more depth one of the attempts to develop a 'progressive' modernisation of welfare: the social investment model. The notion of a 'social investment welfare state' has gained increasing ground over recent years, playing an important role in the discourse of international organisations such as the Organisation for Economic Co-operation and Development (OECD) and EU. It forms a part of a number of concepts - others include 'active social welfare', the 'new welfare state' and 'new risk welfare' - that might be grouped under the label 'new welfare'. All are based around a shared view that developed welfare states have begun to place less emphasis on income protection and more emphasis on investing in human capital. Put differently, they stress the growing importance of the 'productive' elements of social policy, chiefly on the basis that this may square the circle of maintaining social expenditures while responding to increased economic competition. The chapter then reviews how far reform agendas match the reality of the social investment model theory and, moreover, evaluates the effectiveness of the approach in reconciling social and economic pressures.