Is social investment inimical to the poor?

Abstract

In the last two decades, the social investment strategy has been the main approach to welfare state reform. Concretely, two spending programs have dominated the agenda: the expansion of active labor market programs and the development of childcare services. Many authors have suspected, however, that these social investments were realized at the expense of income protection for the poor. This article assesses this potential trade-off with time-series cross-sectional models of the determinants of active labor market policies expenditures, childcare spending and the adequacy of minimum income protection (MIP), for 18 OECD countries between 1990 and 2009. It turns out that social investments are rather akin to traditional welfare state programs, and are explained by similar institutional, political and economic factors. More importantly, they do not develop at the expense of income protection. Social investment initiatives are consistent with the usual politics of the welfare state and, overall, they are not inimical to the poor.

Noël, A. (2018). «Is social investment inimical to the poor?», Socio-Economic Review. https://doi.org/10.1093/ser/mwy038