The purpose of this research proposal is to assess the capacity of the European social investment strategy to alleviate poverty in Sweden and other European countries. This social investment strategy, which is currently dominant in European social policy making, assumes that poverty is best combatted by public services preparing individuals for economic independence through employment, rather than through government expenditure on monetary transfers repairing poverty. Assessing this strategy is important for two reasons. First, inequality and poverty are rising across Europe, including in Sweden where inequality rose by about 25% since 1980. Second, for social investment to succeed, it is pertinent that the services improve employment, that this employment is sufficiently paid and secure to protect against poverty, and that the degree to which services reduce poverty by stimulating employment actually outweighs the possible increase of poverty associated with cutbacks in social protection. Whether this is actually the case, is as of yet unknown.

This research proposal will focus on two policy domains of immediate importance for the social investment strategy: labour market policy and family policy. For these types of policies, the following questions will be answered: To what extent: (a.) has the shift from cash benefits to public services increased employment, (b.) has employment reduced poverty, and (c.) was anti-poverty effects of employment offset by reductions in cash benefits?