Disambiguating Lisbon. Growth, employment and social inclusion in practice

Bea CantillonHerman Deleeck Centre for Social Policy, University of AntwerpLiège, 7-8 september 2010

Lisbon: the assumption

complementarity between:

growth

employment inclusion

Source: Eurostat

EU27

EU15

EURO16

22000

23000

24000

25000

26000

27000

28000

29000

14,5 15 15,5 16 16,5 17 17,5

% population at risk of poverty

GD

P (

in P

PS

per

cap

ita)

EU27EU15EURO16

EU27

EU15

EURO16

63

63,5

64

64,5

65

65,5

66

66,5

67

67,5

14,5 15 15,5 16 16,5 17 17,5

% population at risk of poverty

Empl

oym

ent r

ate

EU27

EU15

EURO16

Lisbon: in practice

Why?

• More in work poverty?

• More jobless households?

• Less social spending?

• Less social protection for the poor?

Poverty reduction by taxes and transfers vs. employment, 1995-2000-2005

Source: OECD, calculations by Koen Vleminckx.

50,00

55,00

60,00

65,00

70,00

75,00

80,00

85,00

30,00 35,00 40,00 45,00 50,00 55,00 60,00 65,00 70,00 75,00

Poverty HC Reduction by Taxes and Transfers

Em

plo

ymen

t/p

op

ula

tio

n r

atio

FR

BE

FI DE

SWNL

DK

At-risk-of-poverty rates among unemployed (most frequent activity status)

35

37

39

41

43

45

47

49

2005 2006 2007 2008

% o

f u

nem

plo

yed

at

risk

of

po

vert

y

EU27 EU15 NMS12 EURO16 MEAN

Source: Eurostat, based on ECHP (1994-2001) and EU-SILC (2004-2007)

Net minimum income benefits standardized for wage growth in 12 European Countries, 1990-2005/2009

Net minimum income benefit (PPPs)

0

2000

4000

6000

8000

10000

12000

14000

16000

Aut Bel Den Fin Fra Ger Ire Net Nor Swe Swi Uk

19901995200020052009

Source: SaMip (Nelson, 2007) and SCIP (Korpi, 2001).

Distribution of child benefits, care services, leave benefits in Flanders

0

20

40

60

80

100

1 2 3 4 5

Mill

ion

Euro

s

Income Quintiles (Equivalent Disposable Household Income)

Child and birth benefits

Care services

Leave benefits

Source: FFCS, authors’ calculations.

Summing up

• Poverty stand still despite growth of income and employment and little change in social spending

• Because: social protection for jobless HH declined employment related social spending

increased

Lisbon: the ambiguities

• Tension/conflict between employment, growth and social inclusion

• The concept of social inclusion: low income, joblessness, low skills, bad health, material deprivation…

Lisbon: the ambiguities

• Priority: more jobs

• At the cost of less social protection

Disambiguating Lisbon: Active Inclusion

“encourage all Member States to design and implement policies which should facilitate the integration into sustainable, quality employment of those who can work and provide resources which are sufficient to live in dignity, together with support for social participation for those who cannot” (European Commission, 2008).

Need for:

• More adequate social protection

• Indicators on adequacy of SP

• A tightened poverty reduction target

More adequate social protection ( 2008 )

0

10

20

30

40

50

60

Rom Bul Est Lit Sln Pol Uk Hun Ger Spa Fin Ita Cze Aut Swe Lat Fra Bel Den IreNet

soc

ial a

ssis

tanc

e be

nefit

in %

of

med

ian

equi

vale

nt in

com

e

Source: Herman Deleeck Centre for Social Policy (Van Mechelen et al., forthcoming).

Indicators on adequacy of social protection

• overarching indicator on overall replacement rates of pensions and of unemployment benefits

• indicator on the adequacy of minimum benefit levels

• primary overarching indicator on in work poverty and on poverty of the unemployed

the 2020 poverty reduction target

reduction by 20 million of the number of people who are at-risk-of-poverty and/or materially deprived and/or living in jobless households

Back to the ambiguity of Lisbon

growth

(material deprivation)

employment inclusion

(jobless HH) (at-risk-of-poverty)

Tightening the poverty reduction target

The poverty reduction target should be re-defined in such a way that member states should be forced to make progress on and at-risk-of-poverty and material deprivation and living in households with low work intensity

Conclusion:

• take stock of the failures of the Lisbon strategy

• develop a ‘road map on active inclusion’ (Frazer et al., 2010)

• make progress on and at-risk-of-poverty and material deprivation and living in households with low work intensity