Between austerity and growth

In their spotlight article “Between austerity and growth: How the planned citizen’s income reform is slowing down social investment,” Dr. Fabian Mushövel and Prof. Dr. Anton Hemerijck analyze why social security measures can be a driver of economic growth. They refer to the social investment approach, which views social policy as an investment.

The authors argue that social security measures – known as “buffer policies” – cushion people in adverse circumstances such as illness or unemployment, stabilize aggregate demand, and mitigate extreme social upheaval. In conjunction with measures such as education (“stock policies”) and childcare services (“flow policies”), a well-coordinated social policy can thus become an economic investment.

Against this backdrop, the authors take a critical view of the planned citizen’s income reform. They argue that it misses the real problem. Instead of weakening a pillar of social investment policy, the focus should be on bundling benefits, reducing transfer withdrawal rates, and strengthening childcare.