European Trade Union Institute, ETUI.

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Challenges of the economic crisis for social policy

During the last decade efficiency and financial sustainability were the principles guiding many social security reforms in Europe. The predominance of these principles often resulted in benefit retrenchment, a stronger work-orientation of social security systems, and a shift to private elements in social security (particularly in pensions). These reforms frequently resulted in more unequal and less inclusive systems.

With the economic crisis (short-term) priorities shifted. In light of the severe increases in unemployment and underemployment, questions of effectiveness – particularly of unemployment insurance (UI) systems – are currently high on the agenda. Issues of redistribution (evident in the opening up of UI systems and short-time working schemes for new groups of workers) and the stabilising function of social security benefits have also gained momentum. On the other hand, the economic and financial crisis has placed the private elements in social insurance systems (particularly pensions) under pressure. The crisis also challenges the financing of social security systems. Financial pressure, however, is stronger on systems that rely heavily on contributions and not taxes, thus generating new debates on how to best finance social security systems.

The first phase of the economic crisis has seen a re-prioritisation and revaluing in terms of social security. However, the recent austerity measures in many countries target social security, among other things and thus point to a strengthening of retrenchment in coming years.
Using a comparative approach, the ETUI currently examines how institutions are adapting to the economic crisis, which labour market groups are affected and how social policy priorities and visions are shifting during the economic crisis. The specific topics dealt with are as follows:

  • adaptability of social security systems (e.g. active and passive unemployment benefits, (private) pensions);
  • challenges to specific mechanisms in social security (e.g. financing of social security, redistribution);
  • effects of the crisis on the social security of specific labour market groups (e.g. women, non-standard workers, low-wage workers);
  • the changing perception and role of social policy in the crisis;
  • the role of unions and employers in complementing public social policies in the crisis.

This research project has so far resulted in the following publications:

WP 2012.01: The impact of the crisis on earnings and income distribution in the EU
WP 2011.09: Financing social security – business as usual?
WP 2011.07: Pensions after the financial and economic crisis: a comparative analysis of recent reforms in Europe
WP 2011.04: The economic crisis – challenge or opportunity for gender equality in social policy outcomes?
WP 2011.01: Changes in political discourse from the Lisbon Strategy to Europe 2020: tracing the fate of ‘social policy’


Maria Jepsen Director of the Research Department

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