Making social policy work for economic development: the Nordic experience

The Nordic welfare states offer some lessons in a development context. A main achievement has been sustainable poverty reduction. Another important lesson is that, while democratization often leads to greater pressures for social policy expansion, social policy can also contribute to democratization. The Nordic countries further demonstrate that is possible to unify social protection with a competitive and growth-oriented economy. In a number of policy areas, particularly in relation to social services and labor market policy, the Nordic countries have also become leading modernizers. The women-friendly dual-earner model not only combats poverty among families with children, but also enables women to participate in the labor market. The future sustainability of the Nordic model of social policy hinges on the number of taxpayers that can be mobilized. In order to be successful in this, governments need to take a combined, or holistic, approach, and consider both micro motives and macro considerations.     

Nordic Employment Policies – Change and Continuity Before and During the Financial Crisis

The Nordic countries serve as models for successful employment and labour market policies. In this article, Nordic employment and labour market policies are analyzed from a comparative point of view. It is argued that Nordic employment and labour market policies have lost some of their distinctive features. Active labour market policies, for example, are now at the centre of policy priorities in many countries of the EU. And in some other respects, the Nordic countries have converged towards political patterns characteristic for states in central Europe, for example, de‐centralized patterns of wage bargaining and the partial lack of corporatist concertation. During the current financial crisis, specific patterns of crisis management can be observed in Scandinavia that make these countries distinct from many other countries in Europe.     

Societal shifts and changed patterns of poverty

Fritzell J, Ritakallio VM. Societal shifts and changed patterns of poverty Int J Soc Welfare 2010: ??: ??–??© 2010 The Author(s), Journal compilation © 2010 Blackwell Publishing Ltd and International Journal of Social Welfare. This article uses data from the Luxembourg Income Study to analyse cross‐national and cross‐temporal poverty risks in 11 Western countries. We show that poverty risks have tended to increase from the early 1980s to 2000. In line with what we would expect based on the welfare state literature, the Nordic countries tend to have the lowest poverty rates. However, the proportion of the national population with a market income below the poverty threshold has increased in all countries and the cross‐national variation in market income poverty is not apparently related to the type of welfare state regime. We perform a simulation analysis to test whether structural factors, that is, compositional differences in age, family and labour market behaviour, could account for the cross‐national variation found. Our results demonstrate the increasing importance of household labour market attachment for alleviating poverty risks, as well as for explaining the cross‐national variation in these risks.     

Social policy and poverty in post-totalitarian Europe

This article attempts to compare the social policy models of the west with social policies in post-totalitarian central and eastern Europe. It is argued that historical roots as well as recent developments make post-Communist social policy similar to the two major models in the west: the institutional redistributive model and the industrial achievement or performance model. The present problems of mass unemployment and growing poverty cannot be solved without a major reform of social policy, including state intervention and control. The residual social safety net and a strong market orientation are unlikely to be able to reduce poverty and unemployment. However, it is also argued that the strong role of the state and organized labour in both of these European welfare systems creates an obstacle to the future of social policy in the countries of central and eastern Europe. The state is viewed with great scepticism and organized mass social movements are weak in most of these countries. It will take time to develop such agents that can support the development of state social policy, and it may not even be accepted that the route of interventionist state welfare characteristic of western Europe is desirable.     

Ending poverty in Mongolia: From socialism to social development

While recent literature on social welfare has included Asian countries, less is known about low‐income and former socialist countries in Central Asia. This article combines a documentary‐historical method with a value‐critical approach to analyze Mongolia's social policy response to poverty. Mongolia is unique in Asia because it transformed from nomadic pastoralism to socialism without a phase of capitalist industrial development. The case study found that Mongolia lost social welfare when it transitioned from socialism, a statist model, to market liberalism and multiparty democracy. In the 21st century, Mongolia has been aspiring to promote social development by redirecting mining revenues to a human development fund. Mongolia is potentially an exemplar of social development strategies affirmed at the United Nations Conference for Social Development (Rio+20) regarding a green economy for inclusive growth and poverty elimination. Future social welfare research should consider the importance of sustainability. Key Practitioner Message: ● Global standards for tracking poverty alleviation will be integrated with sustainability measures beginning in 2015; ● Mongolia hopes to foster social development and sustainable livelihoods by reinvesting revenues from mining into human capital and health care; ● To sustain future generations, social policy needs to consider the relationship between natural capital, social capital, and financial capital.     

Comparing income poverty gap and deprivation on social acceptance: A mediation model with interpersonal communication and social support

In many developed countries or regions, wide income disparities increase the difficulty in reducing poverty. In their day‐to‐day lives, poor people often feel less accepted by the society. The failures in communicating with social groups and receiving social support lead to negative consequences on individual well‐being and higher level of social exclusion. Based on the debate upon alternative approaches to conceptualizing and operationalizing poverty, this study attempts to verify a mediation model with data from a household survey (N = 1,202) in Hong Kong. The results of structural equation modelling reveal that deprivation is a more powerful indicator than income poverty for specifying the negative relations of poverty with interpersonal communication, social support, and social acceptance; the negative impact of deprivation on social acceptance can be reduced by two significant mediators of interpersonal communication and social support. The results are discussed in terms of directions for future research and policy and welfare intervention.     

Nationalist Reframing of the Finnish and Swedish Welfare States – The Nexus of Nationalism and Social Policy in Far‐right Populist Parties

The rise of right‐wing populist parties in the Nordic countries is slowly redefining the Nordic social democratic discourse of the universal and egalitarian welfare state. The nexus of nationalism and social policy has been explored in regions and countries such as Quebec, Scotland, Belgium and the UK, but the change of discourse in the Nordic countries has received less attention. Taking the case of Sweden and Finland, this article argues that Nordic populism does not question the redistributive welfare state per se as many other European neo‐liberal far‐right parties have done. Instead, it reframes the welfare state as being linked to a sovereign and exclusive Swedish and Finnish political community with distinct national boundaries. Although Sweden and Finland largely share a common welfare nation state discourse, the article also points to important differences in the way this discourse is able to frame the welfare nation state where access to, and the design of, social services are no longer universal and egalitarian but based around ethnicity. The article aims to demonstrate this through an analysis of the welfare discourses of two populist parties: Sweden Democrats and True Finns.     

Denmark: Universal or Not So Universal Welfare State

This article questions whether or not Denmark is still a universal welfare state. It does so by first offering a comparative‐based analysis of the Nordic countries on central welfare state parameters. Second, the article utilizes a case‐based analysis in respect of three core areas of the Danish welfare state—pensions, unemployment and early retirement benefit—to assess the distinctiveness of the Danish model. The article concludes that, notwithstanding the Danish model is more mixed today than it used to be, it continues to be distinct in areas such as equality, full employment, a high level of spending on social security and an active labour market policy.     

Poverty and material deprivation among European workers in times of crisis

Many EU countries are faced with abysmal public debts and high unemployment, and may have to reduce their social expenditure and deregulate their labour market, which should lead to an increase in ‘working poverty’ (i.e., an increase in the number of working men and women who live in a low‐income household, or in a household that cannot afford certain goods and services considered essential for a decent life, respectively). However, working poverty remains an under‐analysed phenomenon in Europe. Moreover, the vast majority of existing definitions used in Europe are based on a relative income poverty line and the EU's official definition of ‘in‐work’, which raises concerns about the robustness of existing findings. This article first examines how the socioeconomic situation has evolved in seven EU Member States that have fared differently. In addition, the article examines whether the use of non‐monetary poverty indicators and of an encompassing definition of ‘working’ has an impact on the conclusions drawn. An attempt is made to identify the main macro‐level determinants of changes in ‘working poverty’ and to better understand their impact at the micro‐level.     

Is democracy pro poor in Sub-Saharan Africa?

This study examines if democracy reduces poverty in 40 Sub-Saharan African countries for the period 1999–2018. For this purpose, we employ the Generalised Method of Moments. The results show that democracy is not directly associated with poverty reduction in sub-Saharan Africa. However, this observation hides important non-linearities and an interesting pattern of policy complementarities. Indeed, democracy is associated with poverty reduction in countries where economic growth is strong and human capital high. The robustness tests carried out do not change these results. This means that poor economic growth and weak human capital not only have a direct negative effect on the well-being of SSA countries, but also prevent the poor in those countries from benefitting the gains of democracy. Therefore, in order to reduce poverty in SSA, policy makers should continue the process of democratization while simultaneously adopting policies of economic development and human capital building. Democracy in isolation is useless for the poor in SSA.     

Swedish Family Policy – Continuity and Change in the Nordic Welfare State Model

The main question addressed in this regional issue is whether or not the Nordic welfare states can still be considered a distinct welfare regime cluster given recent changes, such as the introduction of more private elements into the welfare state. The Nordic welfare states are often described as emphasizing full employment, economic and gender equality, and universal access to cradle‐to‐grave welfare state benefits and services. In the case of Sweden, often pointed to as the model of a social democratic welfare state, such elements remain intact in most aspects of the welfare state, even given the challenges presented by the global neo‐liberal economic paradigm since the 1970s. One way to determine whether or not the Nordic welfare states remain a distinct cluster is to provide an in‐depth examination of various welfare state policies in each Nordic country. To contribute to this analysis, an investigation of family policy in the Swedish context will be provided. Even given recent challenges, such as the introduction of private for‐profit childcare providers and a home care allowance, I argue that Swedish family policy has remained largely social democratic in its underlying goals, and thus acts to support the case for a distinct Nordic welfare regime cluster.     

Social income transfers and poverty: A cross‐country analysis for OECD countries

Caminada K, Goudswaard K, Koster F. Social income transfers and poverty: a cross‐country analysis for OECD countries Poverty alleviation is an important policy objective in developed welfare states. This article reports on a study of the association between social transfer policies and poverty. It has been claimed in several studies that based on a simple bivariate approach, high social effort goes along with low poverty levels. Empirical studies have also found that factors such as demographic and economic conditions may also have an influence on poverty, affecting the relationship between social spending and poverty. In the present study, we empirically analysed the impact of social expenditure on poverty for the period 1985–2005, and in contrast to previous research, demographic and macroeconomic differences across countries were controlled for. Quite a strong negative relationship was still found between the level of social expenditure and poverty. Ageing and unemployment rates were found to have some explanatory power but without affecting the association between social transfers and poverty. Thus, the multivariate approach chosen in this study confirms the results of earlier research.     

‘In a perfect world it would be great if they didn't exist’: How Australians experience payday loans

In the last few decades, payday lending has mushroomed in many developed countries. The arguments for and against an industry which provides small, short‐term loans at very high interest rates have also blossomed. This article presents findings from an Australian study to contribute to the international policy and practice debate about a sector which orients to those on a low income. At the heart of this debate lies a conundrum: Borrowing from payday lenders exacerbates poverty, yet many low‐income households rely on these loans. We argue that the key problem is the restricted framework within which the debate currently oscillates. Key Practitioner Message: ● Framing payday borrowing as a problem of market failure leads to one‐sided and ineffective regulatory responses; ● Until governments instigate real alternatives for cheap and readily available credit, and broader anti‐poverty measures, curbing access to payday lenders can have the perverse effect of increasing privation; ● For practitioners seeking to abolish payday lending, campaigns for higher wages and a liveable social welfare income are central.     

Unemployment and economic security for young adults in Finland,Norway and Sweden: From unemployment protection to poverty relief

In this study, we investigated if there has been a displacement in the type and coverage of welfare services available for young unemployed adults in Finland, Norway and Sweden over the last two decades. This question is important because a number of studies have argued that the generous unemployment benefits and extensive labour market intervention found in the Nordic welfare states shield young people from the most severe consequences of economic inactivity. In this article, we instead show that during this period, less generous means‐tested unemployment and social assistance benefits have become the most important form of income protection for young people. In evidence, earnings‐related unemployment benefits now cover only 10 per cent of unemployed Swedes and Finns and 45 per cent of unemployed Norwegians aged 24 years or younger. This development marks a significant change in our understanding of unemployment protection for young people in Nordic countries.     

Making ends meet: perceptions of poverty in Sweden

During the era after the Second World War, Sweden has built a welfare system based on labor market participation and income maintenance. Low unemployment and decent wages are supposed to guarantee people a labor market income or income maintenance, which in turn should provide a proper standard for everyone. However, a rapid increase in unemployment and economic problems have made the future of the Swedish welfare state more uncertain than ever. These circumstances have, among other things, led to the suggestion that Sweden should abandon the income maintenance policy and create a social policy system with the more limited ambition of guaranteeing everyone a minimum income. In that case, one central question must be answered: what constitutes a decent minimum income in today's Sweden? Where should we draw the poverty line under which people will not be forced to live? These questions are central in the current debate. The consensual poverty line method is used in this article to derive a poverty line relevant for today's Sweden. The results shows that more than every fifth household has an income below the consensual poverty line. That is, they have an income that most Swedes would argue is too low to make ends meet. The level of the consensual poverty line was compared with the National Board of Health and Welfare's guidelines for social assistance. The consensual poverty line was shown to be more generous to small households and the norm for social assistance was more generous to larger households. Finally, the expenditure for guaranteeing all Swedish household a minimum income equal to the consensual poverty line was estimated: more than SEK 25 billion per year. The results in the article casts serious doubt on the ability of the Swedish welfare state to secure a decent income to all citizens.     

Social security for China's rural aged: a proposal based on a universal non‐contributory pension

Yang Y, Williamson JB, Shen C. Social security for China's rural aged: a proposal based on a universal non‐contributory pension Int J Soc Welfare 2010: 19: 236–245 © 2009 The Author(s), Journal compilation © 2009 Blackwell Publishing Ltd and the International Journal of Social Welfare. China's relative lack of social security coverage for rural elders exacerbates the already severe rural–urban economic disparity, slows the rate of rural poverty reduction, and raises social justice concerns. Our analysis draws on evidence from a number of sources including interviews with experts on China, Chinese government documents, Chinese newspaper accounts, and other sources from other countries. Based on our analysis of what has been tried in other countries and the current situation in rural China, we offer some suggestions for Chinese policy makers. We suggest that, for rural China, a universal non‐contributory old‐age pension deserves serious consideration, and refer to our proposed model as a Rural Old‐Age Social Pension. It will reduce the level of poverty in rural areas and the degree of income inequality between rural and urban areas while simultaneously promoting social and political stability.     

It's More Than an M‐shape: The Political Economy of Female Non‐Standard Workers in the Republic of Korea

This study examines the re‐entrance of female workers into the Korean labor market. We highlight that women in their 40s have the highest rate of employment among all female workers and that a large proportion of these women are entering into non‐standard employment. In approaching this question, we examine the political economy of this phenomenon by first discussing the demand side of the Korean labor market using the gendering of the varieties of capitalism argument and then the supply side with the work–life balance argument. When examining re‐entrance into the labor market, women with general skills with lower education and higher education both found it more feasible to re‐enter the labor market as non‐standard workers. While work–life balance is a prominent reason for women's choice of opting out of the labor market, work–life balance choice mattered less for women re‐entering the labor market as non‐standard workers in their 40s and 50s but instead firmly based skill formation mattered more. In addition, the retail service industry is suggested to absorb a large number of female workers with lower skill levels who would have had difficulties in re‐entering other male‐oriented companies.     

Aiming to keep poor Mexican families at the breadline (but no higher): The effects of minimum wage,tax, and social policy changes between 1994 and 2012

Welfare policy in Mexico has been transformed in recent decades. During the years of the import‐substitution industrialization economic strategy and the hegemonic party political regime, social policy was based on social insurance programs of limited coverage to urban formal sector workers and their families. In the mid‐1990s, an unprecedented expansion of social protection through social assistance programs was triggered, along with social insurance reform. This article assesses the effects at the household level of social policy changes, in combination with changes in taxes and the minimum wage, which also impact the welfare of the population. The research applies “model families” to establish effects of social, tax, and minimum wage policy changes across population groups, and their combined potential to combat poverty. Findings show that although taxation and social policy changes increased redistribution towards poor families, their capacity to lift and keep them above poverty thresholds was limited by the drop in the real value of the minimum wage and by strict targeting mechanisms, which exclude families that do not meet eligibility criteria but still fall below poverty lines. Social policy expansion merely subsidized the drop in real minimum wage, and poor families at best remained at similar income levels. Hence, the logic of the design of welfare policy changes can be characterized as aiming to keep poor families on the breadline, but no higher.     

Kosovo's social policy during self‐management,UNMIK and independence: Persisting high inequality and social exclusion

This study examined: (i) Kosovo's social policy's poverty and inequality outcomes in recent history, namely during Yugoslav self‐management socialism (1952–1989), the United Nations Mission in Kosovo (UNMIK) (1999–2008) and independence (2008 onwards), and (ii) the impact of local politics in the more recent trajectory of social policy. The study shows that the poverty rate after the war (1999) is significantly lower than it was during socialism, but that there is persistent high and deepening Gini inequality and social exclusion. Transfers and taxes of the residual‐liberal policy have reduced more pretransfer–pretax inequality, and especially poverty, compared with self‐management's insurance‐dominated socialism, but their effectiveness is declining due to the policy's underlying long‐term, pro‐market logic and its increasing particularism with respect to short‐term transfers. The article argues that the main local political cleavages have originated from self‐management socialism's extensive stratification. These cleavages matter in distributive conflicts, and they mattered also during the UNMIK period by easing the pathway for the unprecedented influence international organisations have had on policy formation.     

Introduction: social policy and economic development in late industrializers

This Supplement in the International Journal of Social Welfare presents the main findings of a United Nations Research Institute for Social Development research project on social policy in late industrializers, covering countries in East Asia, Latin America, Middle East and North Africa (MENA), and sub-Saharan Africa, as well as the Nordic countries. One of the findings from the research is that social policy has been used as an integral part of economic development in successful late-industrializing countries. In the MENA region and sub-Saharan Africa, however, social policy was tried for too short a period to be properly implemented and tested. East Asian and Latin American countries started with a narrow-based social policy, but social policy in East Asia was extended to foster social solidarity, bringing people into the mainstream of social change. Such findings suggest that social policy is multifunctional, not only in terms of social protection but also economic development and democratic governance.