The economic necessity of an investive welfare state

Social investments today are pivotal determinants for economic development and social spending of tomorrow. Social investments include active labour market policy, preschool care and early education, education and research as well as health prevention and rehabilitation measures. Especially studies that look at the investment of early childhood education clearly show that a lack in social investment leads to high economic costs in the long run. For instance, if children of socially excluded groups are able to profit from education and active labour market measures, they will need less unemployment benefits and social assistance later. Calculations by the OECD show that both the individual and the societal profits of education are very high and exceed those of financial markets. Passive and only compensatory social policies are too short sighted and have to be accompanied by active and preventive elements in the area of education, gender and family, labour market and migration.