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Strenghts and weaknesses of the Nordic and Continental Welfare State Models: What can We Learn from Each Other? Olli Kangas Danish National Institute of.

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Presentation on theme: "Strenghts and weaknesses of the Nordic and Continental Welfare State Models: What can We Learn from Each Other? Olli Kangas Danish National Institute of."— Presentation transcript:

1 Strenghts and weaknesses of the Nordic and Continental Welfare State Models: What can We Learn from Each Other? Olli Kangas Danish National Institute of Social Research & Department of Social Policy, University of Turku

2 Content of the presentation important values and importance of values social insurance labour markets social services poverty, social exclusion

3 ein einzig Volk von Brüdern? ”Now let us take the oath of this new federation. We will become a single land of brothers, nor shall we part in danger or distress.” –Friedrich Schiller (1759-1805): Wilhelm Tell EU: a federation of brothers / sisters? members may have common interests but what about common values / solidarity?

4 The Nordics trust on their national institutions (parties, parliament, government, police and justice system) but distrust on the EU Italians trust on EU but not on their national institutions Estonians trust neither on national nor EU institutions


6 there are big differences in general trust Nordics high-trust societies Belgians trust in their welfare state system how to increase trust in EU in the Nordics? how to increase trust in national institutions in the other countries? how to increase trust in other nations within the EU?

7 Workers’ insurance versus national insurance a long term convergence between models in the Nordics income-relatedness has taken over and unconditional benefits have lost relatively in the Continental model (notably so in Belgium) basic security has been improved consequently, differences in financing has been diminished –employees’contributions have been introduced in the Nordics Fin/Swe vs. Den –is it the level of social security contributions or the structure of financing or the structure of labour market & welfare state that is important for employment? the latter

8 Central European corporatism: a hindrance for reforms? participation of social partners makes the system robust –not directly open for political manipulation –high degree of legitimacy ”our system” harder to change, if needed, than politically administred systems In Sweden and Finland a number of important reforms were carried through; in Denmark welfare comission is preparing its proposals

9 the Finnish example

10 the Nordic have been able to cut public debts (that are among the lowest in OECD hemisphere) budgets are in surplus Economic growth has been pretty good since the mid 1990s (in Fin & Nor extremely good) Unemployment rates are low (Den, Nor, Swe) Employment rates are highest in the world female lf-participation due to the public sector

11 Maternal employment rates by the age of youngest child 2002 (OECD)

12 Probability not to be employed after care-taking period (ECHP / Koistinen 2005)



15 Some Danish lessons high wages financed via taxes and SOCIAL security contributions easy to dismiss, easy to get social security high employment mobility –30% of employees change their jobs annually! effects of globalization may be more severe e.g. in Fin & Swe than in Den

16 How to finance social services? social insurance vs. tax financing user fees vs. tax financing problems in tax financing –tax levels are high –EU sets limits for the Nordics to use previously proven devices –discrepancy between risk pool and financial pool User fees –how to guarantee access to the poorest sections –income-tested user fees pros & cons

17 Rowntree's poverty cycle in York 1899 and 2000's cycle in Continental Europe / Scandinavia and the United States and the United Kingdom.

18 third sector as a provider of social services traditionally in C-E the 3 rd sector has been important it has played a role in the Nordics, too state-subsidized EU directives on competition hollow up the possiblities of the 3 rd sector that bifurgates into the private for-profit systems or into the public sector private legislation penetrates into the social legislation –EU –municipal tenders (subject to law suits) common-law takes over the codified law?

19 the old are not poor and the poor are not old; problem of social exclusion: youth and immigrants

20 The Belgian tax experiment the dilemma between decent income from work and too high wage levels for unqualified labor –in the US also analfabetics get job –how to avoid the working but poor situation the experiences from the Belgian experiments?

21 PISA: pupils’ acievement results CountriesProblem solving MathematicsReadingScience SWE 22171815 DEN 12 1320 FIN 6767 1414 1818 1616 BEL GER 19201216 FRA 1716215 AUS 9879 CAN 10988 IRE 1825617 UK 1918107 USA 28 1521 KOR 2524 JAP 331912

22 COGNITIVE PERFORMANCE AMONG 15-YEAR OLDS. USAU.K.GERNLDENNORSWE Constant421.34***444.86** * 375.97** * 465.29***388.85** * 406.06** * 433.92** * Gender 18.68*** 15.53*** 25.57*** 10.04*** 20.24*** 27.51*** 27.51*** Immigrant- 15.98*- 14.01**-40- 92*** -30.87***-25.48***-35.25***-35.66*** Father Education 3.57*.76 7.52***.58 8.19*** 2.98* -.27 Mother educ: Secondary 13.79* 10.31 43.61*** 27.24*** 37.87*** 30.83*** 20.59* Mother educ: Tertiary 13.88* 15.42* 50.01*** 22.34*** 52.72*** 20.44** 17.07* Socio-economic Level 1.10*** 1.17***.90***.92***.50*** 1.01*** 1.06*** Cultural Capital 34.21*** 40.65*** 36.39*** 35.82*** 34.17*** 38.73*** 30.84*** Mother part- time 16.84** 12.92*** 5.00 9.55** 8.24 4.76 5.05 Mother full-time - 8.91* 5.99** - 3.09 -10.66* -.77 2.91 7.41 R2R2. N2571745839332169393334703836 Espinng-Andersen 2005

23 Challenges for educational systems those countries with good performance display low social inheritance problems of education / segregation in Den & Swe In Europe education more evenly distributed than e.g. in the U.S. but top-education more succesfull in the US

24 What can we learn from each other? to be small and clever national strategies the common European welfare project? what are the smallest denominators for the European project?

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