Framework and outline

This article focuses on the level of formal policy regulations, and the risk-category youth and unemployment. Youth are defined in accordance with EU indicators (European Commission, 2011) as 15–24 year olds. The focus on youth and unemployment relates to the pressing issue of high youth unemployment rates in Europe, combined with the social investment focus on employment, and on young people and preventive measures. The article's European perspective is a consequence of the debate on social investment both politically and scholarly being related largely to the European context.

In order to provide a backdrop against which the ideas of social investment can be related, the variables are contrasted to previous welfare state ideas. One of the important contributors to the debate on social investment, Jane Jenson (Reference Jenson, Morel, Palier and Palme2009), undertakes a mapping of social investment-, Keynesian- and Neo-liberal ideas, claiming that social investment has a logic that differs from the other two. She describes Keynesian ideas as prescribing state responsibility for assuring protection in the present when markets fail, and providing equal opportunities for its citizens, through a hierarchical and bureaucratic form of governance. In contrast the neoliberal perspectives is described as advocating limited state responsibility for welfare in order to avoid future deficits, governance through corporate models and privatisation, and a view on inequality as inherent to and necessary in the free market (Jenson Reference Jenson, Morel, Palier and Palme2009). It is based on these descriptions that I refer to Keynesian and Neo-liberal welfare state ideas throughout this article.

Temporal perspective

Investing in people is perhaps the most salient idea promoted in social investment literature, (Bengtsson et al., Reference Bengtsson, de la Porte and Jacobsson2017; Reference Bonoli, Morel, Palier and PalmeBonoli, 2009; Reference HemerijckHemerijck, 2011; Morel et al., Reference Morel, Palier, Palme, Morel, Palier and Palme2009). The idea is that allocating resources to policies that are capacity building for individuals will reduce the prevalence of risks such as unemployment in the future. I.e. it has to do with how policies relate to the occurrence of social risks, in this respect social investment differs from the welfare regimes of the past. As described by Jenson (Reference Jenson, Morel, Palier and Palme2009) in her portrait of modern citizenship-regimes, Keynesian policies responded directly to the risks of the present, the neo-liberal politics on the other hand focused on constraining costs in the present to avoid risks brought on by deficits in the future. The timeline of social investment also extends from the present into the future, yet with the distinct difference of a reversed logic of spending (on investments), rather than saving, in the present given the assumption that such spending will materialise as revenue in the future.

While the social investment perspective is biased toward preventive policy responses equipping the individual to avoid or handle social risks, the literature also speaks of striking a balance between proactive and reactive policies (Reference Vandenbroucke and VleminkxVandenbroucke & Vleminkx, 2011; Esping-Andersen et al., Reference Esping-Andersen, Gallie, Hemerijck and Myles2002; Reference Giddens and GiddensGiddens, 1998). Without reactive measures individuals may under certain circumstances not be able to make use of their capital or worse yet, it may be depleted. For example, income security will most likely affect the level of flexibility of workers (Reference Bothfield and RoualtBothfield & Roualt, 2014; Reference HemerijckHemerijck, 2015). Hemerijck (Reference Hemerijck2015) describes reactive policy measures in the realm of social investment as a form of protective buffers during periods of volatility and transition in people's lives. This implies that such periods will be brief or only occur occasionally, given that the role of reactive policies should still be marginal to that of proactive policies. Or that some degree of materialised risk is negligible in a social investment agenda. In fact, in Anthony Giddens (Reference Giddens and Giddens1998) social investment, proactive measures would preferably replace reactive cash-benefits in all areas possible.

Distributional principle

The distributional principle here refers to perspectives on responsibility and equality, or simply who should provide what to whom? Based on a dichotomous classification of equality-approaches, equal opportunities imply equal shares distributed for all, while equal outcomes seek to distribute resources in a way where the end result is as equal as possible (Reference DworkinDworkin, 1981a, Reference Dworkin1981b). Neo-liberalism favours diversity as inherent to the free-market and a means to control spending, as opposed to Keynesianism that favours equal opportunities (Reference Jenson, Morel, Palier and PalmeJenson, 2009). Social investment is primarily characterised by distributional principles of a more individualistic nature, promoting equal opportunities proactively. Equipping the individual and aiding him/her to become better skilled for new types of jobs in an increasingly flexible labour market is often described as a central task of a social investment strategy (Reference Bonoli, Morel, Palier and PalmeBonoli, 2009; Reference Vandenbroucke, Hemerijck and PalierVandenbroucke, Hemerijck, & Palier, 2011). Bringing us to the issue of responsibilities of state and individual/family for different perspectives on equality. The approach to equality in social investment implies that the primary responsibility for policy makers (the public sphere) is to provide equipping and preparing efforts on broad front through different life stages, while the further outcome is the responsibility of the individual/the family (private sphere) (Reference Jenson, Morel, Palier and PalmeJenson, 2009). A system of broadly distributed social policies, rhymes with the notion of universalism in welfare state theory. It could therefore be argued that much of the social investment literature is in fact suggesting that social investments to a large part should lean toward a more universalistic provision of policy. However, social investment also mentions the complementary role of policies that protect in the face of social risks, unemployment for example (Reference Vandenbroucke and VleminkxVandenbroucke & Vleminkx, 2011), targeting those that need it more. Such policies reflect an approach to equal outcomes, but lie closer to the Keynesian welfare state ideas (Reference Vandenbroucke and VleminkxVandenbroucke & Vleminkx, 2011). In these instances, the public has a responsibility to address inequalities. This means that the condition for such responsibility is substantive inequality, hence this responsibility is only toward already marginal(ized) individuals with the goal of increasing equal outcomes.

Policy coherence

A broad battery of policy responses is part of a social investment agenda. This is exemplified in the social investment literature by calls for policy efforts toward skill enhancement and full employment; women entering the labour market, early education and childcare (Reference Bothfield and RoualtBothfield & Roualt, 2014; Reference CantillonCantillon, 2013; Reference Deeming and SmythDeeming & Smyth, 2015; Reference HemerijckHemerijck, 2011; Reference Jenson, Morel, Palier and PalmeJenson, 2009; Pintelon, Cantillon, Van den Bosch, & Whelan, Reference Pintelon, Cantillon, Van den Bosch and Whelan2013). The assumption in social investment literature is that these policies impact and has bearing on one another, making coherence of policies important. While such complementarity is possible, as put by Atkinson (Reference Atkinson2010) it ‘can be achieved but not assumed’. This ties in to some of the critical voices of this concept, arguing that in a worst-case scenario incoherent policies may generate ‘Matthew effects’ where measures benefit those among the target group who are already better off (Cantillon & van Lancker, Reference Cantillon and van Lancker2013). So for situations or groups where problems are complex, coherence will likely have a crucial impact on the extent to which policies reach and aid the disadvantaged. Yet there is a lack of clarity as to what precisely will generate policy-coherence. One aspect of coherence, it can be argued, is the interaction and cooperation between policy areas. Scholarly literature in this field indicates that provision of a multitude of policies including services, cash and in-kind benefits from several areas and actors will likely require coordination (Øverbye, Strohmeyer Navarro Smith, Karjalainen, & Stremlow, Reference Øverbye, Strohmeyer Navarro Smith, Karjalainen, Stremlow and Kazepov2009). Even more so if there are common goals to the provision of such policies. This relates well to social investment and its coherence idea. An expression of coherence could thus be regulations of how coordination between policy areas and actors is organised, for example if there is required cooperation or even gathering different agencies under common leadership or in common facilities. Related to welfare state paradigms, the neo-liberal ideas entail differentiation of policy provision, organisationally dispersed among decentralised levels and a multitude of actors (Reference Jenson, Morel, Palier and PalmeJenson, 2009). Keynesian notions of policy organisation and state interventions on the other hand, promote macro-level management implying some mode of centralisation (Reference Jenson, Morel, Palier and PalmeJenson, 2009). In this sense the social investment notion of policy coherence seem, while vague, to be a step away from both Keynesian and neo-liberal thinking.

Notable in this section is the room for variation along the lines of social investment ideas within each dimension, and how the ideational content between dimensions connect and overlap. The proposed framework therefore allows for different approaches to time, distribution and coherence, and at the same time indicates that how the approaches are combined has bearing on the extent and form of social investment.

Temporal perspective

The operationalisation of the temporal perspective, is based on two aspects of policies; primarily their point of entry in relation to a social risk, and additionally their duration. The relation between a social risk materialising and the policy response captures the nature of different policy-timelines. It is however key to be mindful of the fact that social risks are defined rather than given, and a policy may address several risks, some of which it may seek to prevent and others react to. For example, day-care may provide a long-term proactive investment for children, as well as a reactive measure for a young parent wanting to seek employment.

The temporal dimension is defined by three variable-settings: Proactive, Reactive-bridging and Reactive-continuous. The point of entry is defined by whether or not a policy is conditioned by a risk having occurred. Proactive policies have no requirement of a risk occurring (e.g. basic education) whereas reactive policies only enter in after a risk is manifested (e.g. unemployment-benefits). The variable value Proactive is solely defined by point of entry. Focusing on young people and the risk of unemployment, the bulk of proactive measures are likely education and child-care, efforts which in Europe generally span over several years. A further distinction by duration of proactive policies is therefore not made in this operationalisation.

Reactive policies on the other hand is divided by duration into the variable-settings Reactive-bridging or Reactive continuous, based on the emphasis in the social-investment literature on policies reacting to ‘transitions periods’, implying temporary states of volatility. An attempt to pin-point a limit between long- and short term duration runs the risk of being misleading, as it needs to capture characteristics of policies in different areas and include both cash and in-kind measures. Instead, I differentiate between time-limited or non-time-limited measures. The distinction simply being that a reactive policy with a specified maximum duration is defined as a Reactive-bridging policy, and those without as Reactive-continuous. While a bridging approach is more in line with the complementary reactive policies described in the social investment literature, the reactive continuous approach is rather an extension of the bridging approach than a complete divergence from it.

A proactive policy targeting youth unemployment is Switzerland's national legislation for vocational training from 2002 (VPETA). The vocational training programmes are open to youth whether previously unemployed or not and aims to provide smooth transitions from education to employment. The Swedish Job Guarantee for youth (UGA) and Activity Compensation (AC) as well as the UK New Deal for Young People (NDYP) are instead examples of labour market programmes targeting already unemployed youth. Participation in all three programmes is time limited making them reactive-bridging.

Distributional principle

The distributional principle is tied to notions of equality and distribution, in this case the distribution of policy access for youth and the risk of unemployment. Since the distributional principle of social investment comprises broadly distributed policies, and policies aimed specifically at marginalised individuals or groups, the operationalisation is focused on policy access. Studying the width or curtness of policy access and the individuals it addresses, makes it possible to discern the previously mentioned what, who and whom of the distributional principle. How access to a policy is regulated reflects the different forms of equality applied in this article, roughly one that distributes equally (universal) or one that targets those affected negatively by inequality (targeted). This in turn tells us something about the extent and form of responsibility that lie with state and individual/family respectively.

The distributional principle has the variable-settings: Universal, Compensatory targeting and Non-compensatory targeting. The first indicator, Universal, is defined here as policies available to young people on equal terms, for example an ALMP programme for all youth formally registered as unemployed for a specified time. This includes policies combining general universal access with favourable access conditions for a marginalised group. Compensatory targeting are policies where general access is targeted toward a group of youth, defined as being more vulnerable on the labour market than youth in general.Footnote ⁶ In cases of cash-benefits, means testing is also defined as compensatory targeting. Finally, Non-compensatory targeting refers to instances where access to a policy is directed to youth who are not marginalised, for example apprenticeship-programmes for youth with high skills. Non-compensatory targeting is treated as a non-equal approach to distribution of access, as it deviates markedly from the other two approaches and from the ideational content of social investment. Sanctions have been left out of the operationalisation due to the difficulty of fully capturing it in regulations, and as they are likely to be found in a large number of policies regardless of universal or targeted access. Access to a policy does not guarantee equal utilisation of it, nor equal or increased advantages because of it. But it does indicate whether there is an intent to equally provide the opportunity for some mode of action (Campbell (Reference Campbell1975), and whether there is an effort to level the playing field in the consequences or risk of unemployment for young people.

Three of the four previously mentioned programmes have a universal distributional principle. The VPETA law on vocational training encompasses vocational training broadly, covering upper secondary and tertiary education levels. The UGA and NDYP similarly are directed to a broad group of youth; all registered unemployed youth. The Swedish AC on the other hand is a compensatory-targeting programme, where access is targeted to marginalised youth who have a reduced working capacity.

Policy coherence

Policy coherence is limited here to regulations on how coordination of implementing agencies is organised.Footnote ⁷ Given the variety of problems and policies covered by social investment, it is likely that coordination of policy-providing agencies will be important. Since coordination implies seeking some mode of harmony in interaction, it is assumed for this operationalisation that coordination provides important conditions for policy coherence. The variable-settings are created to capture formal regulations of coherence regarding implementing organisations and policy programmes. Implementing organisations in this instance refers to those organisations with the overall responsibility for implementation of a policy/policy area. Due to the quite general description of policy-coherence in the social investment literature, these aspects were selected based on the policy level of interest (policy regulations), and literature on developments in the organisation of policy provision around Europe.

The variable-settings for coherence are defined as: Integration, Cooperation and Separation. An approach to coherence, uniting two or more agencies or policies under joint leadership constitutes integration (Reference Christensen and FimreiteChristensen & Fimreite, 2010; Øverbye et al., Reference Øverbye, Strohmeyer Navarro Smith, Karjalainen, Stremlow and Kazepov2009). Cooperation is identified when cooperation is stated in the regulation either as a requirement or explicitly encouraged, even when the structure for such cooperation is not expressly stated or suggested. The third setting, Separation, refers to one of two things; splitting up policies or implementing organisations, which can be exemplified by the outsourcing of public programmes to private actors. Alternatively, when a position on cooperation is wholly absent in the regulations of a policy.

The VPETA reflects an integration form of policy coherence, gathering fields and levels of vocational education that were previously divided between cantons and federal state under a common federal law. Another example of integration is in the UK where the Benefit Agency and Employment Service were merged into Job Centre Plus, an integrated agency delivering benefits and services of the NDYP. The Swedish UGA on the contrary contains no regulations requiring or encouraging cooperation. In addition, the Swedish Public Employment Services (PES) were tasked with purchasing services from private providers to be used for example in UGA. These two aspects of UGA reflects separation. In the Swedish programme AG, there is a stated responsibility for the implementing agency (the Swedish Social Insurance Agency; SIA) to cooperate with other relevant agencies and actors. This is in line with the setting cooperation (Table 1).

Strict social investment

If we distil the more salient approaches from each dimension of social investment we end up with an ideal type based on a proactive timeline, a universal distributional principle, and an integration approach to coherence. This implies a strictly biased form of social investment.

This ideal-type combines pro-active efforts with universal access to policies. It reflects quite an individualistic approach where equal opportunity is not the means to equal outcomes but the goal itself, given that it is applied to proactive policies as opposed to reactive ones. On the other hand, it underscores the necessity of social spending and broad state intervention. The notion of broad proactive measures is the perhaps most salient in the social investment literature. Regarding coherence, the disregard for its role in substantive policymaking is problematic. The way I have operationalised this variable implies that a strict social investment would again, require quite an active state in terms of policy provision and regulating and possibly governing integrated policies. Looking at actual policy areas, basic education systems are to their nature pre-emptive to unemployment, but they may to varying degree be universal and integrated. For example, in the previous section the VPETA is categorised as a proactive, universal and integrated policy type, which is in line with strict social investment. Other education systems, such as those applying tracking, can however not be regarded as universal and is thus further from a strict social investment. This pokes a hole in the presumption in social investment literature that all education efforts are strictly in line with the ideas of social investment. If we look at the NDYP, it is universal and integrated, but has a temporal perspective that is reactive-bridging rather than proactive. This programme corresponds to strict social investment in all aspects but time, which is not surprising as unemployment programmes are based on the substantive risk of being unemployed.

Targeted social investment

The targeted social investment type is based on a bridging reactive timeline, a compensatory distributional principle and a cooperation approach to coherence. As described in the conceptual framing of the three dimensions, social investment is open to some extent of reactive policies for bridging limited periods of transition. This also implies an openness to compensatory targeting as we are talking about a limited role for these policies. A targeted social investment type opens up for policies that deviate from the strict social investment ideal type, toward the more complementary approaches in social investment. It combines a temporal perspective of present spending on present risks, with a restriction on time connecting somewhat to an economic approach to expenditure restrictions. The approach to distribution can be read as reversed from the strict social investment, as targeting to compensate for inequalities is the means to adjust unequal outcomes. In this scenario, the organisational conditions for cooperation act as the means to achieve coherence, implying less public intervention than in the strict social investment. In the literature on social investment, this approach to policymaking is discussed no further than as a complementary policy-format, primarily mentioned in terms of unemployment benefits during transition periods. There are however, examples of other types of policies targeting marginalised youth, as with the AC programme in Sweden. It is targeted to youth with long-term disabilities or illness, cooperation is regulated in the policy, and it is a reaction to inability to gain regular employment. This example demonstrates that reactive social investment policies may well be present in policy areas other than unemployment benefits, a notion that has not been paid much attention in the social investment literature outside the mention of parental leave schemes. The fact that compensatory-targeting is utilised in proactive measures, also begs the question whether the room for compensatory-targeting measures should be paid further attention in the social investment literature.

Reactive social investment

Based on the goals of social investment, increased inclusion and reduced poverty, it would seem reasonable that some reactive measures would benefit from being universal in order to protect. The reactive social investment type is based on a bridging-reactive timeline as in the targeted social investment, combined with a universal distributional principle of the strict social investment, and a cooperation approach to coherence. The universal approach provides a means of equal opportunities to protection during periods of transition. However, in contrast to the strict social investment, the reactive approach implies the ends to be outcomes that are more equal. This is combined with the responsibility of the state to intervene as inequalities materialise. Policy coherence is here sought through regulated cooperation. Given the complementary role of reactive policies in social investment, and the time-limited nature of these policies, a less invasive form for coherence may be sufficient. However, it does still imply some extent of public intervention through regulation to insure that policies do not counteract one another. This ideal-type, where the reactive form of policy is extended by its distributional principle to function as a universal policy, is an attempt to further the notion of the role of reactive policies. Given that the problem to which a policy reacts is not too widespread, it is quite possible for a reactive policy to be universal without supplanting proactive universal policies. The Swedish UGA is an example of a reactive universal policy response. This programme is universal in access, and has a specified time limit, categorising it as a bridging-reactive policy. However, it lacks the cooperation aspect of the reactive social investment; instead, the UGA is characterised by separation. In this sense, the UGA demonstrates that policies that may entail several features in line with a social investment strategy can also incorporate elements that deviate from social investment.

Scholars argue that social investments may be found in many different policy areas (Reference KvistKvist, 2015b), occurring in variations of different approaches (Reference Bonoli, Morel, Palier and PalmeBonoli, 2009), and that these are not a package of inseparable strategies in substantive policies (Reference Vandenbroucke and VleminkxVandenbroucke & Vleminkx, 2011). This is demonstrated by the examples of policies in different areas, using varying approaches, and to different extent belonging to an ideal-type of social investment. In previous studies on social investment, education is often categorised as social investments per se because it is proactive. Yet as demonstrated, education efforts may lack approaches that are central to social investment, begging the question when and how is education actually social investment? Another reoccurring concept is equality of opportunity, which we may find both in education but also in reactive measures such as the Swedish job guarantee for youth or the NDYP. In addition, the role of equal outcomes and protection is described in the literature as having a complementary role to play, yet it is hardly mentioned outside examples such as unemployment benefits and parental leave. This could be interpreted to mean that other reactive measures, such as the AC in Sweden, are not social investments, in spite an approach to increased equality, a focus on human capital investment and cooperation focus. In order to measure and debate social investment in a more nuanced and structured manner we need to study several approaches and how they interact. We also need to move beyond the notion that a specific type of policy, such as education, is always social investment. I argue that we need to open up to the idea of several types of social investment, as well as the fact that these may be more or less suitable for addressing different problems, in different policy areas and for different groups.