Social Investment, Employment Outcomes and Policy and Institutional Complementarities: A Comparative Analysis across 26 OECD Countries

91 Pages Posted: 2 Oct 2019

See all articles by Vincent Bakker

Vincent Bakker

Leiden University - Department of Economics; Leiden University - Leiden Law School

Olaf van Vliet

Leiden University - Leiden Law School; Leiden University - Department of Economics

Date Written: September 2019

Abstract

Social investment has become a widely debated topic in the comparative welfare state literature. To date, there are, however, only a couple of systematic comparative empirical analyses that focus on the employment outcomes associated with social investment. This study contributes to the social investment literature by empirically analysing the extent to which variation in employment outcomes across 26 OECD countries over the period 1990-2010 can be explained by effort on five social investment policies using time-series cross-sectional analyses. Apart from focusing on employment rates, we additionally explore associations with qualitative aspects of the employment outcomes relying on novel indicators. The analyses account for theoretically relevant confounding variables that were omitted in existing studies, notably labour market institutions. We find robust evidence for a positive association between effort on active labour market policies and employment rates. For other policies we obtain mixed results, dependent on the employment outcome being studied. Subsequently, we explore the role of policy and institutional complementarities in the assessment of the employment effects of social investment policies. We show how social investment policies interact and how their effect is moderated by effort on other policies. Additionally, our analysis shows that the complementarity of social investment policies varies across welfare state regimes. Finally, explorative analyses suggest that there are positive synergies between more and better jobs, which could in part be attributable to effort on social investment.

Keywords: employment, job quality, social investment, policy complementarity, institutional complementarity, diminishing marginal returns, comparative welfare state analysis, social expenditure, social policy

JEL Classification: H53, I38, J21

Suggested Citation

Bakker, Vincent and van Vliet, Olaf, Social Investment, Employment Outcomes and Policy and Institutional Complementarities: A Comparative Analysis across 26 OECD Countries (September 2019). Available at SSRN: https://ssrn.com/abstract=3458304 or http://dx.doi.org/10.2139/ssrn.3458304

Vincent Bakker (Contact Author)

Leiden University - Department of Economics ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands

HOME PAGE: http://https://www.universiteitleiden.nl/en/staffmembers/vincent-bakker

Leiden University - Leiden Law School ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands

Olaf Van Vliet

Leiden University - Leiden Law School ( email )

Steenschuur 25 PO Box 9520
Leiden, 2300 RA
Netherlands

HOME PAGE: http://www.law.leiden.edu/organisation/taxlawandeconomics/economics/staff/vliet.html

Leiden University - Department of Economics ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands

HOME PAGE: http://www.law.leiden.edu/organisation/taxlawandeconomics/economics/staff/vliet.html

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