The Role of Social Transfers and Social Services As Investments in Re-Employment: An Evidence from Finland

Theoretical starting points: Division between the compensatory and capacitating/investment roles of social policy, i.e. rewards people receive due to social risks materializing vis a vis the welfare state as a facilitator for individuals to increase their capacities. Following Rawls, we argue that decent social transfers are ‘basic goods’ that the welfare state must guarantee. However, following Sen and Nussbaum, we argue that ‘basic goods’ are necessary but not sufficient means to fully enhance well-being. The individuals must have capabilities to use ‘basic goods’. Social services/investments are supposed to fortify individuals’ capabilities.

Research questions: The aim is to explore how compensatory social transfers vis a vis capacitating social investments affect well-being and life satisfaction in re-employment. Special attention is paid on the role of social services as an efficient tool of social investment.

Data: 1,000 telephone interviews among unemployed in Finland, conducted in 2017.

Results: preliminary analysis of variance indicates that social investments/social services are a significant factor in improving well-being of the unemployed. At the scale 0 (bad) to 10 (good) means (all differences are significant) are as follows:

Access to services	Work ability	Health	Life satisfaction	Capability	Relations to other
No	6.7	6.8	5.9	5.8	7.5
Yes	7.7	7.7	7.3	7.1	8.0

Conclusions: From the social investment perspective, we evaluate the relative role of compensations (money) and social services (investments) as providing people the capabilities Sen and Nussbaum are advocating. Based on empirical analyses, we verify our central argument: social services play a central role as social investments when increasing unemployed individuals’ overall well-being, their capabilities, and further the possibilities for re-employment.