The social investment approach: an overview

The social investment approach has inspired the European social agenda since the early 2000s. According to this approach, some kind of social expenditure (i.e. education and lifelong learning, life-work balance, labor market measures…) is not considered as a cost like in the neoliberal era but rather as an investment that can foster (in the long run) employment and skills upgrading. Social investment policies are expected to raise participation in the labor market while promoting the transition to high value-added productions and knowledge economy sectors, ensuring at the same time less inequality and intergenerational equity. If social investment has been effective in delivering the expected outcomes it is actually controversial, as literature shows. Welfare re-commodification, Matthew’s effects, underestimation of gender equality are some of the most prominent critics. This paper provides a literature review of social investment approach origins, developments, criticism and challenges. It also addresses the topic from a policy perspective, stressing the lack of coherence between promoting that equitable, sustainable, inclusive growth that the European institutions have been pushing for more than twenty years and the austerity dictates the same institutions have put in practice.