Education and Welfare: Recalibrating the European Debate

Much of the recent scholarly literature on globalization and social welfare focuses on the threats that are allegedly posed to national social protection systems by footloose capital in search of lowcost labour. However, it is argued here that capital is less concerned about the costs imposed by generous social protection, more by the advantages offered by generous human capital investment. Thus, far from mobile capital driving national policies of social protection by the threat of exit, national policies on human investment may drive capital mobility by inducing entry. The paper investigates alternative national policies of this sort, their institutional preconditions and their implications for the distribution of welfare. It concludes that the current drive for human investment must be placed at the centre of comparative welfare analysis, not least in order to expose the fragility of the assumptions that policy makers are making, in seeing such investment as the road to welfare and opportunity for all.