Changing Social Risks and Social Policy Responses in the Nordic Welfare States

I. Harsløf, R. Ulmestig, I. Harsløf, R. Ulmestig

• Publisher: Palgrave Macmillan
• Year: 2013
• Print ISBN: 9781349443338, 9781137267184
• eBook ISBN: 9781137267191
• Topic: Politics & International Relations
• Subtopic: Financial Risk Management
• Index: Politics & International Relations

The Nordic welfare states have found themselves in the firing line of post-industrial developments, resulting in fundamental changes and new social needs to attend to. This book explores responses to changing social risks across areas such as structural unemployment, entrepreneurship, immigration, single parenthood, education and health.

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Introduction: Changing Social Risks and Social Policy Responses in the Nordic Welfare States

Ivan Harsløf and Rickard Ulmestig

Introduction

Insuring its citizens against the misfortunes that may threaten their livelihood is the defining feature of the welfare state. The first social insurance schemes that emerged in the late 19th and early 20th centuries were instituted to protect people in cases of work accidents, sickness, unemployment, widowhood and old age (if it occurred). By instituting such schemes, the state acknowledged that individuals were exposed to social risks conditioned by societal structures that were beyond their control (Rothstein 1994).

Today, structural changes resulting from the transition towards a post-industrial society are profoundly altering the patterns of social risks facing individuals, hence altering their needs for welfare state provisions (Bonoli 2004, 2007; Esping-Andersen 1999; Taylor-Gooby 2004). While the ‘old’ social risks certainly remain, these new social risks appear to result from deep-seated and interwoven changes in the spheres of production and social reproduction.

Hence, recent decades have witnessed radical changes in working life, in family structures and in socio-demographics. These changes have produced contingencies such as family dissolution, single parenthood (or the failure to form a family household in the first place), family and work imbalances and under- and overeducation. The emergence of new social risks as a large-scale phenomenon in the Nordic countries is conventionally dated already to the 1970s. As such one can arguably question whether the appellation ‘new’ still applies. And while these types of risks have continued their rise into the 2000s, the novelty of the present situation, we will argue, is the interaction between different structural drivers of new social risks that one is beginning to observe. For instance, dynamic, flexible and knowledge-intensive labour markets are interacting with trends in family formation among young people (Lorentzen et al. 2012) and family stability (Chambers 2012), and both the spheres of family and employment are affected by processes of inter-nationalization, resulting in new chances (like international educational and career opportunities and transnational family bonds) and new risks (e.g. as a result of stretched social support networks). One may even talk about emerging new social risks of a second order. Hence, disadvantages seem to be reproduced and aggravated among the new social risks groups across generations, and one is even seeing new social risks that in previous decades predominantly affected the higher educated, like marital instability, now becoming more prevalent among lower-educated groups (Esping-Andersen 2013).

The international literature has lauded the Nordic welfare states for providing a particularly strong bulwark against new social risks (Bonoli 2007; Taylor-Gooby 2004; Timonen 2004). In an account of how different European countries have responded to the emergence of these risks, Bonoli writes:

Broadly speaking, the Nordic countries seem to have gone farthest in this process, by providing structures that facilitate the reconciliation of work and family life, by developing an arsenal of active labour market policies and a wage setting system that protects the incomes of low skill workers, and by operating inclusive pension systems and comprehensive elderly care service provision.

(Bonoli 2004:4)

Bonoli relates the Nordic countries’ success in alleviating new social risks to the fact that these risks started emerging at a large scale sooner in the Nordic countries than elsewhere, at a time less marked by austerity. This ‘timing’ allowed policy-makers to devise effective policy responses (Bonoli 2007). Likewise, Taylor-Gooby generally emphasizes the virtues of the Nordic welfare states in tackling new social risks:

In the Nordic context, the well-established care services and the active labour market policies mitigate the impact of the new risks. Citizens are well supported in balancing paid work and domestic care, and in gaining access to work.

(Taylor-Gooby 2004:23)

These appraisals resonate with a general narrative in both social science and international political debates portraying the Nordic welfare model as somehow best in class. Indeed, scholars subscribing to this narrative can refer to comparatively low at-risk-of-poverty levels,¹ high employment and low unemployment,² high fertility,³ and, perhaps most significantly, relatively strong social mobility in the Nordic countries.⁴

However, while the Nordic countries display these positive indicators of welfare performance, they, more than most other European countries, simultaneously exhibit structural features that the literature has associated with the emergence of new social risks. As the next section demonstrates, the structural changes that are said to be generating the new social risks – changes towards flexible and knowledge-intensive labour markets, individualized families and a more heterogeneous population – could seem particularly conspicuous in the Nordic welfare states.

The Nordic welfare states in the post-industrial economy

The Nordic welfare states find themselves in the firing line of post-industrial developments.⁵ In a broad sense, post-industrial developments imply fundamental changes not only in labour markets and production systems but in all societal institutions, including the family and civil society (Bonoli 2007; Taylor-Gooby 2004). Daniel Bell (1976:466–480) saw the ‘game between people’ – in contrast to the ‘game against nature’ of the pre-industrial era and the ‘game against fabricated nature’ of the industrial era – as the essential feature of a post-industrial society. In other words, individual competition is the name of the game.

Arguably, some of the key trends associated with the transition towards a post-industrial society are particularly accentuated in the Nordic countries. These trends pertain to changes in labour markets, the family and the composition of the population.

From an international perspective, the Nordic economies stand out as highly flexible (World Bank 2009).⁶ As early as the late 1940s, parts of Swedish and Danish industry ventured into non-Fordist, advanced and flexible production based on technological innovation, extensive subcontracting and outsourcing and on the segmentation of products according to niches in the international market (cf. Glimstedt 1995; Scott & Storper 1992:52).

The flexibility of the Nordic economies is, among other things, reflected in high labour turnover (OECD 2007:113–115).⁷ While high labour turnover does not necessarily reflect a risk-generating problem as such, because turnover is also affected by voluntary departures, it nevertheless bears witness to particularly strong dynamics characterizing Nordic labour market, dynamics that spread to the wider society.

In addition to being flexible and dynamic, Nordic labour markets are noted for being particularly knowledge-intensive. The Nordic countries are among those countries moving with the fastest pace towards a knowledge-based economy (OECD 2001:14–15). A growing proportion of the labour force is employed in the knowledge-intensive service sector (Eurostat 2004),⁸ and knowledge-intensive technologies and modes of organization permeate all sectors of the economy, including extraction and manufacturing. Hence, post-industrial Nordic labour markets increasingly demand a wide range of formal and informal skills. This process appears to exclude an increasing number of the working-age population from participating in employment. For example, according to a projection for the Danish labour market for the period 2008–2018, the demand for unskilled labour will decline at twice the rate of the corresponding decline in supply (Pedersen 2008).⁹

Moreover, the role of the family as a welfare provider is declining in the Nordic countries. Spearheading general European trends, the family institution in the Nordic countries has been characterized by accelerating processes of individualization (Hatland 2001). Among other things, this individualization is reflected in the rising numbers of single-person households, family break-ups and single parents. A ranking of European countries according to the proportion of 18–44 year olds living in single-adult households shows Finland on top (with 26 per cent of Finns heading a single/single-adult household), while Sweden and Norway take third and fourth place, respectively (our calculations, European Social Survey Round 4, 2008).¹⁰ In 2007, approximately one in five Nordic households with children aged 1–17 years was headed by a single parent (NOSOSCO 2008). Furthermore, from an international perspective, young people in the Nordic countries are leaving their parental homes at an early age, even if jobless (Vogel 2002).¹¹ In many respects, this phenomenon might be attributable to young people in these countries being relatively affluent and with access to public income support. However, in the Nordic countries, the risk of experiencing spells of relative poverty is quite high, by international standards, for those moving out of the parental home at an early age compared with the risk borne by their stay-at-home counterparts (Aassve et al. 2006:38).

Starting in the 1960s, the sphere of social reproduction has also been undergoing critical changes as the Nordic countries have gone from fairly homogeneous to multicultural societies.¹² In this rapid transformation, the Nordic countries appear to share special challenges. Despite improvements in recent years, these countries still have some of the largest gaps in employment rates between the locally born population and non-Western immigrants (European Commission 2008:67).¹³

A Norwegian study examined the development in the labour supply of immigrants who had initially arrived as guest workers from 1971 to 1975. By 2000, their employment rate was 50 per cent, compared with 87 per cent for their native counterparts. The researchers demonstrated that this difference resulted partly from the immigrants’ tending to work in declining sectors of the economy. However, their analysis also attributed a substantial part of the variance in labour supply to strong disincentives in the welfare system, where

high benefit replacement ratios for household heads with a non-working spouse and many children provide extremely poor work incentives for families of the type that dominates the cohort of labour migrant considered by this study.

(Bratsberg et al. 2007:42)

In a European comparative study, Koopmans (2010) advances an argument along similar lines: that generous welfare provisions appear to run counter to the labour market and societal integration of immigrants.¹⁴ A worrisome element in the Nordic countries is that immigrants are often educated far beyond the requirements of the jobs they hold. By international standards, this phenomenon of overeducation among immigrants is particularly pronounced in Sweden and Norway (Eurostat 2011).¹⁵ While overeducation in this group may point to a high demand for informal skills in addition to the formal ones in these labour markets, it can also be a consequence of more discrimination here than elsewhere.¹⁶

A critical perspective on developments in the Nordic welfare states

The previous sections have sketched out what appears to be a paradox. On the one hand, the Nordic welfare states stand out as strong performers on central welfare indicators. On the other hand, more than elsewhere in Europe they exhibit the structural features that the literature associates with the emergence of new social risks. These circumstances call for an examination of the social policy adaptations that have taken place in these areas in the Nordic countries throughout recent years. How have the authorities been able to accommodate such deep-seated structural processes in the labour market, family and population? And importantly, in reforming their social policies to handle the challenges emerging from the changes in the spheres of production and social reproduction, are the Nordic countries departing from the basic characteristics of the Nordic model of social redistribution?

Undertaking such an analysis brings us into contact with a more critical narrative of the Nordic welfare state. This narrative is mainly developed in research from Nordic scholars and often articulated in non-English publications. It describes Nordic welfare states as increasingly influenced by neoliberal governance strategies, with widening gaps in employment, income and health, and characterized by processes of individualization, segregation and polarization.

Hence, while acknowledging the profound welfare gains accomplished by the Nordic welfare states, this book approaches social policy changes in these countries from a more critical point of departure. To lay the groundwork for such an analysis, the following sections discuss the particular institutional design of the Nordic welfare states with an emphasis on the central mechanisms for social redistribution. Furthermore, in the interest of acknowledging some important qualifications to what is essentially an ambiguous concept, we outline a theoretical framework for a critical analysis of these new social risks.

The Nordic welfare state model

As in most other Northern European countries, the historical development of the Nordic welfare states is connected to processes of industrialization, de-ruralization and urbanization in the 19th century. In these processes, dependence on wages from employment became more common, and some of the extended kinships and ties, which had traditionally provided protection (and social control), were broken. Public welfare arrangements became a solution for alleviating the social risks that emerged from this societal transformation. Through such arrangements, the state could enhance the inter-job mobility of the growing work force of wage earners (Hatland 1999) and dampen the simmering social unrest caused by poor living and working conditions (Midré 1990).

While sharing with other countries the social risks related to industrialism, in the post-war era the Nordic countries came to develop a specific welfare model characterized by relatively generous and universal provisions.

Some scholars point to pre-industrial patterns which foreshadowed later developments. Hence, Kildal and Kuhnle (2005:17) find traces of early universal arrangements following the Reformation in the 16th century, where the Evangelical Lutheran church in the two Nordic kingdoms of Denmark–Norway and Sweden–Finland played an important role in providing educational programmes to further literacy for everybody. With reference to Sweden, but with relevance for the other Nordi...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Figures and Tables
• Preface
• Notes on Contributors
• 1. Introduction: Changing Social Risks and Social Policy Responses in the Nordic Welfare States
• 2. Changing Population Profiles and Social Risk Structures in the Nordic Countries
• 3. Welfare State Support of Lone Parents – Nordic Approaches to a Complex and Ambiguous Policy Issue
• 4. Working Time Policy Change and New Social Risks
• 5. The Growing Emphasis on Social Citizenship in Nordic Education: Inducing New Social Risks While Trying to Alleviate Them
• 6. Structural Unemployment as a New Social Risk in the Nordic Countries – A Critical Reassessment
• 7. Fighting Risks with Risks: Self-Employment and Social Protection in the Nordic Welfare States
• 8. Health Capital: New Health Risks and Personal Investments in the Body in the Context of Changing Nordic Welfare States
• 9. Ethnification of New Social Risks: Programmes for Preparing Newly Arrived Immigrants for (Working) Life in Sweden, Denmark and Norway
• 10. New Geographically Differentiated Configurations of Social Risks: Labour Market Policy Developments in Sweden and Finland
• 11. A Liberalistic Handling of New Social Risks – Danish Experiences from Three Decades of Social Policy Reforms
• 12. Discussion: The Take on New Social Risks in the Nordic Welfare States
• Index