Social Investment Theory

Social investments refer to policies designed to strengthen people’s skills and capacities in order to enable them to participate fully in education, employment, and social life. These policies aim to improve not only the life of individuals but also the economic prospects of countries through more tax revenues from work and lower social and health expenditures. Social investments, according to the European Commission and other international agencies, are potential “win-win” reforms. This entry briefly introduces social investment research at both the micro and macro level. It then describes various types of social investment policies and concludes with a discussion of the consequences of social investment for the reforms of welfare states.