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 ( ): 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 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?

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
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

22. 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 * **
-40-92***
-30.87***
-25.48***
-35.25***
-35.66***
Father
Education
3.57*
.76
7.52***
.58
8.19***
2.98*
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*
2.91
7.41 R2
.182
.200
.247
.230
.199
.170 N
2571
7458
3933
2169
3470
3836
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?