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Department of Political and Social Sciences

Europe’s social investment and immigrant integration, post-COVID

The EU plans to spend €800 billion on post-COVID recovery measures. SPS Professor Anton Hemerijck, in collaboration with migrant integration experts, argues that adapting social investment to better serve vulnerable groups such as immigrants will provide the best future resilience.

21 June 2022 | Publication - Research

Over the past few decades, European welfare states have shifted their focus from providing financial safety nets that protect individuals during periods of unemployment and illness, toward investing in people’s human capital and employability. The aim is to help them navigate life transitions and to drive growth in knowledge economies. 

EUI professor Anton Hemerijck argues in a recent co-authored report, published by the Migration Policy Institute Europe, that this 'social investment' orientation is precisely what will be needed to manage future socioeconomic inequalities in states with increasing immigration and diversity of their populations. Social investment is also the starting point of the WellSire research project, funded by the ERC and headed by Hemerijck.

Already in 2020 Hemerijck and others noted that EU and Member State responses to the pandemic and its economic fallout were much more vigorous than responses to other recent economic shocks, such as the Great Recession of 2008-2009 and the European debt crisis that followed it. Fiscal support linked to COVID-19 recovery averaged 8 percent of the GDP of the EU member states in 2020, and the NextGenerationEU (NGEU) facility aims to borrow some 800 billion Euro on capital markets, to be spent through 2026. As Hemerijck has noted, COVID acted as an accelerator of the lessons learned from the recession 10 years earlier. 

COVID-19 and the social investment approach

Beyond buffering employment inactivity, good social investment policies aim for three things: to bolster labour supply; improve the quality of human capital; and ease work–life balance reconciliation. The COVID-19 pandemic made evident that the domains of health, work, family and education are deeply intertwined. And it served to emphasise how unequally people are affected by crises, particularly migrants in precarious work or in ‘atypical’ work-life cycles and care situations. Further, the pandemic showed that welfare states with a poor safety net and largely privatised health care were not up to the task.

The challenge now, according to the Migration Policy Institute Europe report, is to avert a future ‘austerity reflex’ from European governments once the acute effects of COVID-19 are over, and to convert temporary recovery measures into a durable insurance policy for vulnerable groups against other future shocks, including those resulting from economic, technological, demographic and environmental change.

The post-COVID prescription for EU member states, thus, would be to exempt social investment expenditures on human capital ‘stock’ from renegotiated debt and deficit rules. The Recovery and Resilience Facility (RRF), part and parcel of NGEU, represents a unique opportunity for member states to step up social investment reform. This would foster immediate gains, notably in early childhood education and care and female employment, and in turn enhance long-term fiscal and social returns in countries that most need a social investment impetus.

A casual glance at country-specific RRF initiatives does reveal a stronger social investment orientation, especially with respect to early childhood education and care services. However, migration and integration social investments do not figure prominently in the RRF.

Welfare policy and integration policy

Social investment programmes of European welfare states have not served immigrant populations as well as they might, as several studies point out. Initial inequalities can be exacerbated by programme design (vocational education is not aimed at learners entering the economy from abroad), from lack of familiarity with administrative procedures, bias on the part of employers or simply the fact that social services tend to prioritise the less disadvantaged clients (the ‘Matthew effect’).

On the other hand, alongside mainstream welfare a successful set of policies and programmes has grown up with a focus on migrant integration. The report therefore proposes that integration policy, with its lower degree of formalisation and greater organisational flexibility, could serve well as a laboratory for the improvement and fine tuning of social investment.

Among the illustrations cited by the report's authors are kickstarting integration into labour markets (by shortening asylum seekers’ waiting periods, and speed-processing credential recognition, for example); offering job training programmes that combine childcare and psychosocial support and are thus tailored for women; or devising curricula for refugee and migrant pupils that place more emphasis on so-called transversal skills – networking, interpersonal skills, critical thinking and entrepreneurship.

The overarching recommendation of this think piece is to strengthen systematic communication and cross-fertilisation between integration policy and mainstream welfare policy. In a note of caution, the authors recognise the political challenges, especially in tough economic times, to “admitting perceived outsiders into the community of solidarity on which welfare states are based.” Nonetheless they conclude:

“Far from being an afterthought, ensuring that welfare states are inclusive of immigrants and refugees will be critical if they are to successfully transition to a social-investment approach – perhaps Europe’s best chance at reconciling social cohesion and economic resilience aims in times of crisis and recovery.”

Last update: 21 June 2022

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