The University of Edinburgh -

Overview

Rationale

The sustainability of advanced welfare states is increasingly in doubt. Economic internationalisation poses employment problems; post-industrial labour markets imply a lower potential for productivity gains; demographic challenges, low economic growth and high levels of non-employment within the working age population in many countries undermine welfare state resources. However, welfare states play a vital role in ensuring growth to be economically and socially sustainable. Not only do they contribute to a healthier and more educated population but influence life chances and opportunity structures, support socially disadvantaged groups and help maintain social solidarity in the face of rapid societal change. Industrialised nations are thus faced with a serious challenge: to construct sustainable welfare provision for sustainable growth, a new social settlement for a new social and economic age. The particular profile and extent of this challenge, as well as the feasibility to engage in innovative policy responses, varies across countries, partly because of differences in national context, but also because of differences in the type of welfare states. In this respect, the UK and Germany have traditionally represented two distinct European ‘worlds of welfare capitalism’ (Esping-Andersen, 1990), different ‘social systems of production’ (Hollingsworth/Boyer, 1998) and arguably respective ‘comparative institutional advantages’ (Hall/Soskice, 2001). Characteristic for the UK are monetary transfers with an emphasis on poverty alleviation, largely deregulated and flexible labour markets and a strong reliance on market coordination. In Germany earnings-related social insurance transfers aimed at income maintenance are dominant, the labour market is more regulated and corporatist coordination complements market relations (Wood, 2001).

However the contexts for German and British welfare capitalism have shifted dramatically in recent decades (Clasen, 2005). In the 1980s the German ‘social state’ was widely regarded in Europe as part of a successful societal arrangement, contributing to economic growth, productivity, high employment, low poverty and inequality and stable industrial relations. By contrast, British shareholder capitalism based on short-term investment strategies and deregulation seemed economically and socially inferior, provoking industrial conflict and reinforcing problems such as social exclusion and labour market marginalisation. Twenty years later, Germany is facing sluggish economic and employment growth, low birth rates, economic and social problems as the legacy of unification, chronic fiscal deficits, persistent mass unemployment and rising poverty, with apparently little prospect of improvement (Kitschelt/Streeck, 2003). In Britain, a more favourable economic backdrop since 1993 helped unemployment to decline and new jobs to emerge. Population ageing is also somewhat slower than in Germany. However, poverty rates and inequality remain high, labour market inactivity for some working age groups, and in some geographical areas, has declined only marginally, and the effectiveness and sustainability of major schemes, such as current pension provision, remains questionable.

The focus of the programme, its specific objectives
and its longer term legacy

This programme rests on an encompassing understanding of sustainable growth including and combining economic and social sustainability. Economic and employment growth can be supported by the welfare state as it helps to ensure social integration and social inclusion in the face of rapid societal change, while keeping costs at a widely acceptable level. Our overarching focus is how Germany and the UK are responding to the challenge of sustainable welfare for sustainable growth. We analyse the ways in which the German and British welfare states have adapted to common and country-specific challenges and assess the extent to which policy reforms have succeeded in supporting social and economic sustainability. This applies to certain policy domains in particular, such as public policies in support of families or provision of income security in old age. Departing from much conventional analysis, we investigate these domains in an encompassing fashion, taking account of policy interdependencies, public and non-state provision and actors, and assessing how far policy changes align with traditional or foster new conceptions of social justice and solidarity.

In three closely integrated projects we assess policy effects both in terms of their contribution to economic sustainability (e.g. labour market participation) as well as social sustainability (providing social protection), while taking account of traditional and changing notions of social justice which are at the heart of sustainable economic and social structures and policies. Focusing on family and pension policy, but adopting an encompassing perspective of public policy, families, households and the private sector, we investigate current policies and new avenues which could help to achieve a new social settlement at a time of rapid change and growing uncertainty surrounding traditional social policy provision. More specifically, project I appraises the centrality of paid work in the formulation of current family and education policy. We investigate to what extent social policies by the state and by employers allow the family to play a role that is supportive of family members as private citizens as well as suitable for the specific demands of national political economies. Similarly, in project II we deal with the question of how welfare states and employers address the material needs of citizens during prolonged periods of retirement without risking financial sustainability. Finally, in project III we take a different but complementary and highly important perspective, exploring how attitudes towards normative principles of state welfare underline the changes investigated by all other projects.

In collaboration with each other and integrated within the programme, the three projects address relevant aspects of socially and economically sustainable policy paths. Specifically, this is reflected in policies which foster the labour market participation of women and disadvantaged groups, build human capital and help combine paid and unpaid work. Furthermore social and economic sustainability require the avoidance of poverty and social exclusion, as well as the long-term financial stability of benefit systems. However, it also requires the promotion of change and innovation, which involves new roles for the state as well as non-state actors to foster economic security and social protection, and meet challenges posed by ageing societies. Last, but not least, policy change and new forms of provision only foster sustainable economic and social growth if supported by and aligned with dominant and yet dynamic values of social justice within the population.

The overall aim of our programme is to provide original, meaningful and integrated comparative analyses relevant to academic and policy communities. Although focused on systematic comparisons between the UK and Germany the programme is important for international and especially European research and policy debates mainly for three reasons. First, systematically investigating policies aimed at improving economically and socially sustainable practices in the areas of family and pension policies is vital for the future of European welfare states generally. Second, a German-British comparison is pertinent because the two countries represent two traditionally distinct modes of combining ‘work and welfare’ and institutionalised notions of ‘social justice’ (see above). Third, where appropriate, cross-national analyses go beyond the UK and Germany.
This association within current major international research collaborations is but one factor in support of the long-term legacy generated by our programme. We intend to feed new empirical findings and theoretical understanding into the general debate about European welfare futures, and ongoing policies aimed at realigning work and welfare more specifically. Our aim is to engage academic and policy communities alike who will gain from an improved understanding of options, and limitations, for policy learning across the UK and Germany.

Summary of principal methods

The three projects employ a range of both qualitative and quantitative tools for analysis. Often combining methods within single projects, qualitative methods involve secondary and documentary analyses, policy analysis, case studies, expert and focus group interviews. Quantitative methods include the analysis of cross-sectional time series and a mix of descriptive and inferential methods.

Dissemination of results

We aim to engage in a dialogue with academic and non-academic audiences. The programme steering group and project advisory boards will help locate the programme in international research arenas. With the help of this website and the Anglo-German Foundation, we hope to inform interested groups in civil society and policy making circles, as well as the wider public, about the programme and its progress.

The programme as a whole was introduced at a kick-off conference in December 2006 and interim findings will be presented at a mid-point conference in November 2007. A final conference in Edinburgh (planned for February 2009) will discuss common themes and synergies across projects. Interim reports and relevant papers can be found on this website and final results will be presented at academic and policy conferences and in relevant publications.