Critical Review of the Social Investment Concept

Abstract

This article is devoted to a critical analysis of the concept of social investment as a basis for social policy. Within the framework of the social investment concept the focus of social policy must be changed from 'passively' protecting citizens from the various risks associated with labor market integration to 'actively' supporting citizens in expanding their opportunities for labor market integration. According to the social investment concept, social policies should aim at investing in human capital, enabling citizens to maximize their labor potential in the labor market. A policy based on the social investment concept has undeniable advantages. A high level of participation of citizens in the labor market is an effective way of maintaining income and ensuring social inclusion. In addition, the high level of citizens’ employment reduces the need for state benefits and contributes to the sustainability of the welfare state. At the same time, the concept of social investment has drawbacks. The analysis of the available research on social investment policy allowed us to identify four main points of criticism of this concept: excessive burden of individual responsibility; limited effectiveness of investment in human capital; limited applicability of social policy based on the social investment concept; the problem of social integration through the labor market for disabled citizens. The highlighted limitations of the social investment concept are largely related to the continuing importance of social class in explaining social inequality. Studies show that the social risks that cause poverty are socially stratified in all welfare states. Given this, social investment should not be seen as a comprehensive model of social policy. Social policy should not be limited to social investment. Social investment should be complemented by social protection.