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A sustainable welfare state Joakim Palme Institute for Futures Studies.

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Presentation on theme: "A sustainable welfare state Joakim Palme Institute for Futures Studies."— Presentation transcript:

1 A sustainable welfare state Joakim Palme Institute for Futures Studies

2 Citizenship in the 21st century UN charter on human rights UN convention on the rights of children Rights and responsibilities Capability approach to welfare

3 Why the founding principles of social security rights are important How benefits are distributed: coverage and adequacy – social sustainability How social security create interest coalitions and political support – political sustainability How social security programs may contribute to increase the number of taxpayers – economic sustainability How to re-negotiate contracts/institutions? A policy dilemma

4 Rethinking social policy in ageing societies Social security is strongly redistributive over the life cycle: the ageing of societies puts tough fiscal pressures on public spending The debate on ageing issues has been overly focussed on pension reforms and savings How social policy interact with fertility, education and labour supply (the future tax base) is of vital concern We need to reform the system of social protection in order to make it sustainable for the future

5 Equality and efficiency Universal coverage – combating poverty and exclusion Transaction costs - low with universal systems Portability – good for labour mobility Incentive structure – poverty traps avoided Investments in health and education – productive labour force Stable institutions positive for growth: social rights as property rights Expenditure levels not the critical factor but program design

6 Framework for reform: increase the number of taxpayers Incentives; individual taxation and rights, universal benefits and earnings-related social insurance vs. means-testing, Human resources; lifelong learning Social services; child care, elderly care Employment opportunities; goals and priorities of macro-economic policy, rehabilitation in social security

7 Latin American context Millenium goals of poverty reduction A developmental approach A rights based approach Agriculture, formal and informal sectors Implementation

8 Developmental approach Social policy regimes Social insurance and cash benefits Social services; health and dependants Fiscal and occupational welfare Labour market regimes Labour law: flexibility and security Skill formation: education and on the job Educational regimes Pre-schools: dual earner model and life long learning Single-, dual- or multiple-tracks Tertiary education: financing and selection criteria Migration regimes Refugees vs. labour migrants Global migration, Regional regulation, National policies

9 Welfare/capabilities and welfare institutions Welfare: Individual resources making it possible to control living conditions Several dimensions: health, work, income, education etc Misfortune: social policy challenge Welfare institutions: Resoures for the individual as user Insurance for future needs Investment in the future Access and quality State, municipalities, market, voluntary sector, family

10 Sustainability 2.0 How to re-negotiate contracts/institutions? A policy dilemma

11 The ‘Great’ Swedish Pension Reform 1994/98 Ageing society Problems of cost control Incentive problems Individual choice in a compulsory system Political compromise in the most controversial policy field Defined contribution formula 18,5 % of income 16 % Notional Defined Contribution Accounts 2,5 % Fully Funded Accounts Pension Credits: child- rearing etc. Guarantee pension, no means-testing! Buffer funds and automatic balancing

12 Modern family policy: Sharing the costs of raising children -to avoid population decline and its consequences for growth and intergenerational equity Modernisation is about: Gender and work in ageing societies

13 Family policy, female economic activity, child poverty and fertility Family policy Female labour force participation Child poverty Fertility ++/-- - - +

14 Scandinavian model Characteristics: Universal residence based rights Universal earnings-related social insurance Social and health services with universal access Universal education and active labour market policy Achievements: Low life-cycle poverty Reduced inequalities Strong support for social security High employment High female participation High growth and productivity

15 The European Social Model Goal ”The European social model is about social inclusion and equality of opportunity.” Barrosso July 12, 2005 Sustainable strategy Middle class inclusion Universalism Human capital response to ageing societies Gender and work Equality of conditions

16 Open Method of Coordination: Benchmarking Social Outcomes Lisbon Strategy on Employment Sustainable pension systems Health insurance Social inclusion indicators Why not? Family policy and the rights of children

17 Reforming social protection Be faithfull to the goals Be ruthless when examining the means Let both values and facts guide the reform work! (The road to hell is paved with good intentions The devil is in the detai)l

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