Climate change, demographic ageing, labour market restructuring, and growing social inequalities create major challenges for welfare states and raise questions about how to organise social protection and public investment in social services and policies in a way that is both socially fair and environmentally sustainable. In the paper “Macro-regularities about investment in social services”, written by SWINS partner from the University of Antwerp, Researchers focus on the use of several macro-indicators to measure three different dimensions of sustainable wellbeing: economic (income, economic growth and employment), social (inequality and poverty), and environmental (carbon emissions and fine particulate matter) performances. They argue that strengthening and improving social services can be used as a tactical method to deal with these challenges and to support sustainable and inclusive wellbeing throughout life.

Social services and policies play a key role in the transformative phase that current societies are undergoing, driven by interconnected social, economic, environmental, and technological changes. Thus, a better and systematic understanding of how the investment in social services and policies in European welfare states impacts key societal outcomes is a necessary endeavour.

Indicators of sustainable wellbeing

Sustainable wellbeing can be measured using various indicators, Researchers selected the indicators based on the SWINS Theoretical Framework, which indicates 3 mains focus areas – productivity, rights and sustainability – and on pragmatic arguments, related to the selection of social services and policies that are investigated. Researchers have used these macro-indicators to measure the three different dimensions of sustainable wellbeing: economic, social, and environmental performances.

To measure the impact of social service investment on economic outcomes, they use income, economic growth, and employment (also the distinction between male and female employment rates). They also give attention to measures that go beyond GDP and narrowly defined economic indicators. Therefore, poverty and inequality are used as social indicators of sustainable wellbeing.

The environmental dimension is an equally important part of sustainable wellbeing but is not yet very prominent in existing research and few indicators have been used in practice in this context. In their study, Researchers have focused on carbon emissions and particulate matter as indicators to measure this environmental dimension, though other indicators such as biodiversity would also qualify in principle (but have not been used yet in practice).

Different Social services investigated

The research study focuses on four key social services that play an important role during the entire life course:

Early Childhood Education and Child care (ECEC): foundational service during childhood. Also very important in encouraging parental, and particularly female, participation in the labour market. This service is also relevant for mitigating inequalities in early life. Consequentially, investment in ECEC might impact several macroeconomic outcomes, such as increased earnings and improved labour market outcomes. Investing in all children equally is beneficial for the society at large because sustainability of the welfare state relies on it.

Education: foundational service during childhood, adolescence and adulthood.
As individuals acquire more skills and knowledge through education, their productive capabilities improve. This, in turn, leads to increased productivity and a higher skilled workforce, characterised by greater employability. Consequentially, well educated people have higher chances of finding a job. At the macro-level, this influences economic and social outcomes. Education can also play an important role in reducing income inequality and poverty.

Active labour market policies: enabling service during adulthood.
Active labour market policies can be divided into different types of policies and can have various effects on different types of outcomes. The goal of all these different types of policies is to enhance the labour market prospects of unemployed people by increasing their productivity, and therefore their employability. This in turn then leads to positive macro-effects, such as higher employment levels.

Health care:  foundational service during the entire life-course.
Investing in health care is important to influence the economic, social, and environmental outcomes of welfare states. The quality of care is important for the effectiveness, efficiency, equity, and access of health care provision. When high quality healthcare can be guaranteed, this benefits all indicators of sustainable wellbeing. The better the quality and the treatment, the smaller the decline in the patient’s labour earnings and labour market participation, and thus in the macroeconomic outcomes

The sustainable wellbeing perspective that is at the core of SWINS also points to the importance of environmental outcomes. One way of integrating the environmental perspective is to look at the environmental impact of social services and policies, for instance by looking at the impact on carbon emissions that follow from the provision of these services. However, the impact of investment in social services on emissions (or other environmental outcomes) has hardly been researched.

Even though, evidence concerning environmental outcomes is more limited, the review identifies promising links between social investment and environmental sustainability, particularly through emerging eco-social or green services such as energy efficient social housing, green job creation, and more sustainable health systems.

Overall, the deliverable highlights that investing in social services is a key component of transition strategies aimed at achieving sustainable wellbeing within planetary boundaries.

To read more on this discussion read the full publication!