nordic welfare: a diy guide
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Nordic Welfare:A DIY Guide
Jon KvistCentre for Welfare State ResearchUniversity of Southern Denmark
Denmark – the land offairytales and LEGO
High equalityBetween rich and poorBetween men and womenIncomesEmploymentEarningsSubjective measures
High employmentFor allParticularly for womenThe higher the skills, the higher the employment
High employment is important:-To increase welfare-To finance welfare
Without high employment, no “welfairytale” how to make the welfare model employment-friendly?
Question: The Welfare PuzzleLow wage inequalityHigh employment
Generous cash benefitsHigh taxes
Activation requirement polices moral hazardEncompassing labour, social, educational and health services
that helps to create, maintain and utilize human capital
Answer: Employment-friendly policies
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Nordic approach
• Goal is to maximise the realization of human capital for all
• Almost all public policies are directed towards increasing work
• Welfare model not only about securing a safety net or providing insurance and compensation, but also social investments
Social investments over the life course
Childhood Youth Working ageFertille Old
Social investments: Example of policies
Childhood Youth Working ageFertille Old
Early childhood education and care
Primary, secondary and tertiary education
Care for children and elderly, leave schemes
Life-long learning, ALMP
Home help, health care
Social investments: Returns
Childhood Youth Working agedFertile Old age
Rate of return
Cognitive skills
Competences and knowledge
Skills and taxes
Children
Less expenses
Social investments
Insurance
Safety
(Re)distribution
The Welfare Circus
Equity versus efficiency Standard focusNegative trade-off through distortions from redistributive policies
Scandinavian focus1.Insurance promotes
risk behaviour2.Human capital investments
increase qualifications3.Cash benefits are
automatic stabilizers •Moral hazard can be policed
Life satisfactionUK DK
Organisation of welfare services
Authority to taxLegislate on cash benefitsTertiary education
Authority to taxSocial services-Childcare-Elderly careEducationEmployment servicesSome health servicesIn part reimbursed in part by state for cash benefitsInter-municipal redistribution
No authority to taxHealth services
State Regions (5) Municipalities (98)
Active labour market policies
Duration of unemployment spell
Workfare intensity
Job searchContact to job exchange
Short programmesCouncilingJob search courses
Targetted programmes:TrainingEducation
Changing demographics• Changing household
composition• Ageing populations• More ethnic diverse
populations
• (Re)conciliation of work and family life
• Less people to care and finance more elderly
• Maintain solidarity
Challenges
GBR
DK
GBR DK
Trust in others
The way we combine Lego bricks constitute our welfare societies
Employment protection
Social security
Active labour market policies
Social services
…. AND THUS THEIR SOCIAL AND ECONOMIC SUSTAINABILITY
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Lego bricks in the Danish model
Employment protection legislation
Active labour market policy
Social security Social services
Lax Rights and duties Encompassing Accessible, good quality childcare
Contact and talks Generous for low income groups
Encompassing elderly care
Job subsidy
In-work training
Courses and education
Sanctions
In short• By whom, where and when you are born matters for
your life chances• No big trade-off between efficiency and equity• Social security provide redistribution and insurance• Activation polices moral hazard• The effects of active labour market policies depends
on; economic cycle; type of instrument and target group, program length, sequencing and timing; etc.
• Social investments crucial, especially in:– Knowledge based societies- People before they become adults- Kids with disadvantaged family backgrounds
Is the Nordic model sustainable?
• Maintain high employment rates• Avoid increase in long term unemployment
and marginalization• Not new challenges, but changing focus and
forms• Other forms of equality: gender, age, persons
with handicaps and illness, ethnicity, regional etc.
• Social investments more needed than ever
Crisis perspectives
Cohort effectsIntergenerational effectsEuropean polarizationLabour market polarization
Nordic model here to stay
Thanks for your attention
www.jonkvist.comGood luck with
the Scottish Model!
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