Challenges to Twenty-First Century Social Policy Provision

The predicament of early twenty-first century welfare provision

To argue that European welfare states are adaptive and resilient is not to say that they are in good shape. Any understanding of contemporary welfare state change should begin with a cursory inventory of the most important changes in the policy environment of the welfare state over the past three decades. In interaction with each other, five sets of challenges have in recent decades fundamentally transformed the policy environment of modern social policy (see Hemerijck, 2009b). These are now reinforced by the aftermath of the global economic crisis. First, from outside, intensified international competition has come to challenge the redistributive capacities of national welfare states (Scharpf and Schmidt, 2000). Second, from within European societies, changing gender roles in families and labour markets, and increased life expectancy, together with declining birth rates, the shift from an industrial to a service economy, and the destandardization of employment relations have confronted Europe's social policy systems with 'new social risks' (Esping-Andersen etal, 2002; Bonoli, 2007; Esping-Andersen, 2009). Third, as policymakers try new ways to manage the 'new social risks' of skill depletion, inadequate social security coverage, lone motherhood, and problems of reconciling work and family, their endeavours are constrained by domestic social policy commitments inherited from the past. Large portions of social expenditure are historically committed to prior welfare commitments, especially in old age pensions, which under conditions of relative austerity and slower economic growth seem to crowd out the available policy space for initiatives to mitigate 'new social risks' (Pierson, 1994, 1998, 2001c, 2004, 2011). Fourth, at the supranational level, the European Union (EU) has concurrently emerged as a critical intervening variable in, restricting and prescribing but also enabling, welfare state reform. It is fair to say that in the EU we have entered an era of semi-sovereign welfare states (Leibfried/Pierson, 2000; Ferrera, 2005a; Zeitlin, 2005c). The fifth and final challenge relates to the precarious political context of early twenty-first century Europe, with middle classes increasingly fearing the downward mobility of their offspring, going hand in hand with ever stronger electoral abstention and volatility and growing support especially for right-wing, populist, anti-EU, and anti-immigration political movement and parties (Mair, 2007; Elchardus, 2009). A strong political sentiment of national welfare chauvinism has spread across Europe since the turn of the new millennium. Together these five challenges critically delineate the political space of current and future domestic and EU-level social policymaking, even before the onslaught of the 2007-11 economic crisis. The rest of this chapter discusses these five adaptive challenges in turn.