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

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

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?

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

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?

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

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

the Finnish example

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

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

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

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

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

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

third sector as a provider of social services traditionally in C-E the 3rd 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 3rd 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?

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

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?

PISA: pupils’ acievement results Countries Problem solving Mathematics Reading Science   SWE 22 17 18 15 DEN 12 13 20 FIN 6 7 1 4 8 BEL GER 19 16 FRA 21 5 AUS 9 CAN 10 IRE 25 UK USA 28 KOR 2 JAP 3

COGNITIVE PERFORMANCE AMONG 15-YEAR OLDS.   USA U.K. GER NL DEN NOR SWE Constant 421.34*** 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*** 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* 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 R2 .182 .200 .247 .230 .199 .170 N 2571 7458 3933 2169 3470 3836 Espinng-Andersen 2005

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

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?