Two Decades of Change in Europe: The Emergence of the Social Investment State

Abstract Since the late 1970s, the developed welfare states of the European Union have been recasting the policy mix on which their systems of social protection were built. They have adopted a new policy orthodoxy that could be summarised as the ‘social investment strategy’. Here we trace its origins and major developments. The shift is characterised by a move away from passive transfers and towards the maximalisation of employability and employment, but there are significant national distinctions and regime specific trajectories. We discuss some caveats, focusing on the question whether the new policy paradigm has been established at the expense of social policies that mitigate poverty and inequality.