Working paper Open Access

The role of social investment in the life course: possible reduction in vulnerability and gender gaps

Chłoń-Domińczak, Agnieszka; Kotowska, Irena E.; Magda, Iga; Smyk-Szymańska, Magdalena; Strzelecki, Paweł; Bolesta, Karolina

The purpose of this paper is role of social investments in reducing vulnerabilities over the life course. It was found that the important areas are education, status in the labour market, public consumption and net public transfers. The focus was put to strengthening human capital and facilitating labour market transitions, as well as gender aspects. The research was done at the national level with social investment strategies with two key questions: in terms of different outcomes and in light of childcare relating to the gender gaps. The data source included National Transfer Accounts (NTA) and Eurostat database. It covered generational economy variables and labour market indicators. NTA results show three types of social investment strategies with different outcomes by gender. In the countries with developed social investment policies, both women and men show higher labour market attachment, higher lifetime earnings and longer working careers. The gender gap is the smallest in total consumption, as well as public education consumption. In the other two clusters, where social investment policies are less developed, the age profiles of wages indicate more vulnerability on the labour market, particularly in old age, and a lower lifetime income. More reliance on welfare policies is noticed there. Gender gaps in public education consumption are also larger. In the catching up countries the relative public education consumption is smaller, compared to the other two clusters. The employment gaps are investigated using the panel regression models. The study provides a description of the current and historical relationships between gender gaps on the labour market and different social investment strategies, but they do not offer causal explanations. The results show that participation in formal early childcare and care, that contribute to early investment in human capital are also associated with lower gender employment gaps. At the same time, the impact of the formal and informal childcare on labour market gender gaps is complex and not always straightforward. Their impact depends and social perception and cultural context. Furthermore, the accessibility to affordable childcare seems to be beneficial for women with a lower socio-economic status as improves their work opportunities as well as human capital development of children, both constituting he important aspects of the efficient social investment strategy. The design of the childcare services should particularly take into account their provision to children from families with a lower socio-economic background, in particular those living in regions and localities characterised by weaker economic and labour market developments.

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