ABSTRACT
The welfare state at the beginning of the 21st century faces a set of formidable challenges. Population ageing is predicted to lead to a huge increase in spending on age-related social policies for pensions, health and care policies. Traditional family structures are changing indicated by the increase of single parent households and enhanced female labour force participation, creating new demands for early childhood education and family policies. These changes are related to and reinforced by socio-economic structural changes from the industrial to the service and knowledge economy, which lead to new social risks for those without the set of skills necessary to be able to compete in the highly flexible and demanding labour markets of the post-industrial digital age. As a consequence, we have seen a general trend towards increasing inequality in wages, incomes and wealth in almost all OECD countries and in particular in those countries which had been relatively egalitarian before, such as Germany and Sweden. In Germany, for example, the net Gini index, measuring inequality in household income after taxes and transfers, has increased from a value of 27.5 in the year 2000 to about 30.3 in 2010 (data from Solt, 2009). * This chapter draws on my presentation “How popular is education really? Trade-offs between
In public and scholarly debates, investing in education and human capital is often regarded as an important and effective antidote against this trend (Goldin and Katz, 2008; Huber and Stephens, 2014). Education is believed to play an ever more important role in today’s knowledge societies, and hence improving access to different levels of education for less advantaged children could be an effective instrument preventing the emergence of wage inequalities on the labour market in the later stages of the life cycle.
