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The Social Policy Context
Significant improvements in social conditions have been achieved in recent years due to the combination of economic growth and effective social protection. Nevertheless, social distress remains only too common. The main way traditional social policy has addressed this is through publicly-provided benefits – to protect individuals against the risks of life and to ensure that economic and social development move in tandem. However, this traditional model is under increasing pressure today, because of concerns about its affordability and because of a widelyheld view that many clients are badly served by existing programmes. At the root of social distress are structural factors that are common to all OECD countries: the more unequal distribution of market income, shifts in disadvantage among stages in the individual’s life-course, rapid ageing of the population, more diverse family patterns and changing labour-market conditions. More and more countries are introducing active social policies to tackle the challenges posed by these trends. This move to a more active approach aims to encourage individuals to participate as fully as possible in economic and social life. It is based on recognition of the rights and responsibilities of individuals and organisations as part of the broader community where they live and function. These reforms typically combine efforts to give all children a better start in life, to help parents reconcile work and family responsibilities, to help individuals overcome barriers to work, to make work pay and to respond to the needs of people in the latter part of their life. While the specifics of active social policies vary according to the life-course of individuals and specific country circumstances, their common thrust is the need to go beyond insuring individuals against the risks of life, towards a greater focus on investing in peoples’ capabilities and enabling them to realise their full potential throughout their lives.
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Giving Children and Parents a Brighter Future
Investing in children has high pay-offs, both for the children themselves and for society in general. Children who grow up in disadvantaged households are more likely to have difficulty in school, to struggle to find jobs, to be unemployed, sick and disabled when adults. They are also more likely to be parents of poor children themselves, threatening an ongoing cycle of deprivation. Yet, for all the talk of investing in the next generation, social expenditure on children and families ¨C leaving aside education ¨C is dwarfed by other types of interventions, in particular towards the elderly. Low levels of social spending have remained possible because the family is still the best means of providing for children¡¯s needs and care ¨C but family structures are changing, and policy needs to change too. Furthermore, existing policies are already failing to prevent higher poverty among children in some countries, lower fertility rates in most of them, and a persistent gap in the division of paid and unpaid work between men and women. Active social policies towards families with children pay greater attention to ensuring adequate investment in the development of children, sharing part of the associated costs more broadly, and allowing parents to better reconcile work and family responsibilities. As current trends unfold, the need for active social policies towards families with children will increase, but so will the pay-off for adopting such policies. These policies hold the promise of helping adults overcome obstacles to have more children while giving mothers the support they need to remain in the labour market if they wish, thereby offsetting some of the anticipated effects of population ageing. They also help give children the best possible start in life, setting in motion a virtuous cycle of self-reliance and lifelong learning that prepares them for the greater demands of the future and averts the threat of a cycle of poverty and disadvantage. Achieving these results requires policies aimed at: ¡ñ Investing in children. ¡ñ Boosting maternal employment. ¡ñ Reconciling work and family responsibilities. ¡ñ Creating a framework that supports parents¡¯ fertility decisions.
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Combating Poverty and Exclusion Among Prime-aged Persons
Preventing poverty and exclusion among prime-aged persons is a key goal of social protection. While poverty and exclusion manifest themselves most directly in the form of inadequate income, their principal roots lie in a lack of skills, in a range of personal characteristics and structural factors that create obstacles to the use of skills, and in the reinforcement of these obstacles during periods of benefit receipt. Active social policies to avoid poverty and exclusion among persons of working age aim at helping benefit recipients overcome the obstacles to entering into paid work. They combine early and tailored interventions, greater focus on integration services, mutual obligations on both clients and providers to co-operate in the rehabilitation process, and reforms of benefit systems to remove disincentives to work. Active social policies, however, are not a silver bullet. While substantial progress has been achieved in many OECD countries by putting employment integration at the heart of social policy, not everyone can be expected to participate in the labour market, and getting people into jobs will be insufficient to avoid exclusion if people do not keep the jobs, if the wages that the jobs pay are not high enough to escape poverty, or if they offer little prospects of skills development and career progression. Hence, policies aimed at integration into employment must be complemented by measures to ¡°make-work-pay¡± and to assure adequate income for those for whom integration or re-integration into the labour market is more difficult to achieve, in particular single parents and people with disabilities. A consensus is also emerging in a number of countries on applying an approach based on the principle of ¡°mutual obligations¡± ¨C that the commitment and effort society makes to assist beneficiaries requires that they in turn do their best to take steps to find work or engage in other productive activities. The pay-off of these policies in the future is higher income and selfsufficiency among traditional client groups, as well as higher employment rates for the economy as a whole. Reaping these benefits will require: ¡ñ Completing the welfare-to-work agenda. ¡ñ Making progress with welfare-in-work. ¡ñ Moving beyond work as the only focus of policies. ¡ñ Strengthening the effectiveness of programmes targeted to persons for whom work is less feasible.
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Responding to Shifts in the Risks Confronting Older Persons
As recently as the 1970s, the words gpensionerh and gpovertyh were inextricably linked. This is no longer true: during the past few decades, older persons have experienced significant improvements in their economic well-being. They are also living longer and healthier lives in all OECD countries. But, in a context of rapid population ageing, this improvement in performance is weighing heavily on government budgets, threatening the financial sustainability of the programmes that underpinned this progress. Moreover, social policy has been less successful in addressing other risks facing the elderly: the barriers that older workers face in retaining work, the risk of disability and isolation in old age, and the disturbingly high rates of poverty among some specific groups of elderly, in particular those with no pension rights or with interrupted careers. The changing configuration of risks confronting older persons, and the threat to the financial sustainability of the relevant programmes, calls for a shift in policy intervention. Active policies strive to address the obstacles to the continued participation of older persons in economic and social life, with a view to improving their well-being and making better use of their capabilities in activities that benefit both the whole community and themselves. Raising the labour-force participation rates for older persons is important not only for labour-market reasons and to put pension systems on a more solid footing, but also to avoid the risk that, in countries where the value of public pensions has been reduced recently, lower replacement rates will lead to higher poverty in old age. One specific concern is to ensure that the burden of assisting older persons with disability does not weigh disproportionately on women. Because many of them will have entered the labour market, they may no longer be available to provide the care needed by an increasing number of frail elderly. This requires adapting the system of formal care provision and its relationship to informal care, redistributing costs, and taking measures to lower the burden falling on family carers. Priorities for reform include: œ Lowering the costs of old-age pensions while diversifying retirement income. œ Promoting a longer working life. œ Providing more quality services for an increasing number of frail elderly.
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