This special issue of the International Social Security Review considers the multidisciplinary topic of the digital economy and social security. The selected articles that comprise this issue offer a number of varying perspectives on the changing and increasingly complex environment in which social security institutions operate and critically assess not only how social security institutions are likely to be impacted but also how they may respond to the challenges foreseen. Social security institutions do not have control over external factors that can negatively impact the financing and coverage of social security programmes. Nonetheless, with the shift to the digital economy, the task at hand is to manage an unprecedented process of change. Though ensuring service continuity is the primary concern, also required are improvements in service delivery for all stakeholders and the development of responses to meet new operational challenges and emerging coverage risks. Particularly in more developed economies, the socio-economic challenges that accompany the labour market changes associated with the transition to the digital economy are often characterized as threatening a risk of growing precarity. Regardless, the global policy goal remains one of ensuring sustainable and adequate social security protection for all.

As a consequence of new technology, labour markets are changing. This article’s central aim is to discuss variations among welfare states in Europe to adjust to changing labour markets. These variations in adjustment suggest that some welfare states are more prepared than others, including their capacity to ensure their sustainable financing. In the years to come, the predicted impact of technological development on labour markets will be huge. Impacts will include stronger “dualization” and new cleavages between “insiders” and “outsiders”. Fewer industrial jobs are to be expected, and service-sector employment faces a risk of decline due to automation. While the creation of new jobs is likely, it remains to be seen whether these will replace the number of jobs destroyed, leaving the risk that many people whose skills become obsolete will become unemployed in the short as well as the longer term. Furthermore, even if the same number of jobs are eventually created, there will be a period of transition. In the light of this, welfare states will be challenged, not only in how they can finance their activities but also in terms of the threat posed to social cohesion by emerging labour market “winners” and “losers”, with an accompanying higher risk of increasing inequality. The article offers suggestions as to how welfare states may cope with the changes related to the financing of welfare states, and how active labour market policy can be part of the response to help alleviate the expected dramatic changes. Also required is a discussion on the annual average number of hours people will work and how this might be a factor in lower future levels of unemployment.

During 1998–2007, a majority of Central and Eastern European (CEE) governments enacted laws obligating workers to save for retirement in privately managed individual accounts. The governments funded these accounts with a portion of public pension revenues, thus creating or increasing deficits in public systems. After the onset of the global financial and economic crisis (2008), most CEE governments reduced these funding diversions and scaled back the accounts. Now, a decade after the crisis, this article examines the benefits that the accounts are beginning to pay retiring workers. In general, these benefits are shown to be disadvantageous compared with public pensions. Some pay lump sums in lieu of regular monthly benefits, most fail to adjust pensions regularly for inflation, and some pay women less than men with equal account balances. In several countries, pensioners with individual accounts receive lower benefits than those without them. To enable retiring workers to avoid these disadvantages, several CEE governments have allowed them to refund their account balances and receive full public pensions. Yet while this strategy diffuses worker dissatisfaction, it also places strains on public pension finance. To assist second‐pillar account holders without weakening public pensions, governments should consider making private pension savings voluntary and financing these schemes independently of public pensions – i.e. by worker and employer contributions and, possibly, direct state support.

The Government of Cambodia is implementing ambitious reform initiatives to improve the country’s social health protection system. In January 2018, it was announced that the Health Equity Fund (HEF), which is fully subsidized by a joint government-donor initiative for the reimbursement of user fees for the poor at public health facilities, is to be expanded to some segments of informal workers belonging to associations, as well as to commune and village chiefs. Since 2017, the National Social Security Fund (NSSF) has provided social health insurance for formal economy workers in enterprises with eight employees or more. In January 2018, it was expanded to civil servants and all employees regardless of the size of the enterprise. However, this article highlights that the new ambitious reforms are not accompanied by careful planning as regards funding, service delivery, human resources and institutional design. This article therefore aims to examine key policy issues and challenges for Cambodia’s ambitious reform of its social health protection system in terms of resource generation, population coverage, strategic purchasing and governance.

In many European countries, greater importance is accorded to labour market policies in which employers are involved in activating unemployed people. Such employer-oriented policies target employers’ demand for labour and attempt to influence their willingness to hire, train or guide (often disadvantaged) unemployed groups. Using data from a qualitative interview study of an employer-oriented programme in a medium-size city in Sweden, the present article aims to develop knowledge about how these policies are used to influence employers to hire unemployed workers and how jobs created in this context differ from regular jobs. The article argues that creating jobs through new arrangements for the division of labour, with the promise of relieving regular staff of unskilled tasks, may influence employers’ willingness to hire the unemployed when used alongside other kinds of policy instruments. However, the article also shows that this new division of labour, with programme participants performing mainly unskilled tasks, has been difficult to realize, as new staff gradually come to perform an increasing number of regular working tasks.

Despite an increasing emphasis on active labour market measures, unemployment benefits still remain a focal point of employment protection. This article takes the cases of four East Asian economies – China, Japan, Republic of Korea, Taiwan (China) –, which are often characterized as having welfare states with a strong developmental and productivist orientation, to investigate whether, as is sometimes argued, unemployment benefits are restrictive and exclusionary. In doing so, it examines the logic behind the design of unemployment benefits and argues that they are in fact progressive in design and fair when they pay out. Nonetheless, low effective coverage and low benefit rates weaken their redistribution and compensation objectives.

Estimates of effective retirement age based on labour force participation rates are commonly used for actuarial experience review and policy development. However, the transition from work to retirement and the socio-economic environment have evolved over the years, influenced by a growing role for gradual retirement and the labour market impact of the 2008 economic crisis. Rather than focusing exclusively on retirement ages based on labour force participation rates, this article presents complementary estimates of retirement ages to better assess the effective retirement age from employment. It also introduces the concept of retirement from full-time employment, showing that the retirement age from full-time employment is systematically lower than the retirement age from employment. The results reveal that the trend towards an increase in the retirement age has been impacted by economic conditions when considering the effective employment of older workers. Results are presented for different Member countries of the Organisation for Economic Co-operation and Development over the period 2005–2015.

In most Member countries of the Organisation for Economic Co-operation Development (OECD), the income gap between rich and poor has widened over the past decades. This article analyses whether and to what extent income taxes and social transfers have contributed to this trend. Has the redistributive impact of different social programmes changed over time? We use microdata from the LIS Cross National Data Center in Luxembourg for the period 1982–2014 and study both the total population and the working-age population. In contrast to the results of some other studies, especially by the OECD, we do not find that redistribution has declined. Tax-benefit systems around 2013 are more effective at reducing income inequality compared to the mid-1980s and the mid-1990s, especially among the total population. Changes in social programmes are not a driver of greater income inequality across the countries included in this study.

Pension coverage in Argentina is inequitably distributed between different income levels, both during working years and during retirement. The objective of the article is to study the evolution of inequity of access to the Argentinian pension system in terms of its association with the socio-economic status of individuals during the period 1994–2017. An evaluation is offered of how variables such as sex, age, and educational attainment influence such inequity. It is concluded that, although the level of average coverage increased, inequity of access increased significantly in the years following the 1994 reform, both among the active and the inactive population. However, inequity of access among active persons did not improve substantially with the return to the pay-as-you-go pension system, while it was considerably reduced among the inactive population. While the former are found to be affected to a greater extent in terms of coverage as a result of the pro-educated bias among the active population, the latter outcome is thought to be a direct result of the transitory plans for pension inclusion, after which inequity was to resume its upward course.

This article analyses the impact of replacement migration on the financial sustainability of the old-age pension system in Portugal, a country with one of the largest ageing populations in Europe. We do this using demographic forecasts and prospective exercises for the evolution of the Portuguese economy. During the 2015–2060 period, our results evidence the positive impacts of international migration on old-age pension system financial balances, reaching over 3 per cent of GDP after 2045. Moreover, even when taking into considering the low dynamics for the Portuguese economy, replacement migration is an important input to improve pension system financial sustainability.

Although people with disabilities are frequently targeted as key beneficiaries of social protection, little is known on their access to existing programmes. This study uses mixed methods to explore participation in disability-targeted and non-targeted social protection programmes in Viet Nam, particularly in the district of Cam Le. In this district, social assistance and health insurance coverage among people with disabilities was 53 per cent and 96 per cent respectively. However, few accessed employment-linked social insurance and other disability-targeted benefits (e.g. vocational training, transportation discounts). Factors affecting access included the accessibility of the application process, disability assessment procedures, awareness and the perceived utility of programmes, and attitudes on disability and social protection.

This article uses a single male cohort microsimulation model to analyse the intra-generational and distributional effects of a shift in Estonia from a defined benefit pay-as-you-go (PAYG) pension system to a multi-pillared system with a PAYG scheme with contribution-based insurance components and a funded pension scheme. We contribute to the literature on microsimulation by showing how introducing contribution-based insurance components and compulsory defined contribution (DC) schemes can increase pension inequality. Our results show that in the case of a high level of inequality in labour earnings and high long-term unemployment rates, such as in Estonia, the introduction of a very strong link between contributions and future benefits leads to considerably higher inequality in pension incomes as measured by the Gini coefficient. Simulation results for Estonia suggest that inequality in old-age pension incomes more than doubles when the reforms mature. In contrast, the inequality in replacement rates decreases.

The Swedish Social Insurance Agency (SSIA – Försäkringskassan) and its frontline staff have a key role in the implementation of activation policy. Drawing on ethnographic research conducted at local offices, this article investigates how the transparency ideal, as an integral part of the organizational governance of the activation policy, is negotiated and enacted in the everyday life of a welfare bureaucracy. The analysis shows the central role that the transparency ideal plays in the alignment of frontline staff with the normative regime of the agency. While the transparency ideal is central to the internal organizational life of the SSIA, the analysis shows how transparency is much less salient in relation to clients and other relations with the outside world.

Since the inception of the European Employment Strategy in 1997, individualized employment support has been a key priority of the European Union and its Member States. Nevertheless, empirical research on the delivery of individualized services for the unemployed is still underdeveloped. In this article, we explore how local employment agencies in three European cities tailor counselling and services to individual jobseekers’ needs. We find that limited service budgets and underdeveloped organizational interfaces with social service providers tend to constrain the substantive individualization of services in practice, which works in the disfavour of vulnerable jobseekers. Individualized counselling is more widespread, at least for selected target groups. However, organizational capacities for offering individualized problem assessment and advice vary considerably across “worlds of individualization” in Europe.

To increase the chances of integrating youth into labour markets in contemporary European knowledge societies, many policy schemes are geared towards investing in youth’s human capital. Since apprenticeship systems are assumed to ease school-to-work transitions, this seems a particularly promising avenue. However, research highlights that social policies often do not reach the most disadvantaged members of society. The aim of this article is to shed light on the reasons and mechanisms causing this phenomenon, called the Matthew effect, through a single, embedded case study of a vocational education and training programme for disadvantaged youth in Switzerland. The findings highlight cream-skimming practices as a coping strategy enabling frontline workers to satisfy strict assessment criteria. A budgetary allocation driven politico-administrative logic promotes such practices as a means to generate solid results, so as to safeguard political – and thus financial – support.

This themed issue contributes to European research on the role of front-line work in the implementation of welfare-to-work policies. A number of factors underline the relevance of such study. First, the focus on activating and disciplining the unemployed seen in many countries may on the surface look similar. However, a closer look at these policies and how they unfold in different contexts reveals many and interesting differences. While all contain a certain level of disciplining and coercive elements, they also to a varying degree contain elements that focus on the upgrading of skills, building human capital and providing other types of support in promoting labour-market participation. In turn, these policies contain both people processing and people changing technologies that are used for different aspects of policy delivery. In addition, policy developments have gradually expanded the client group of these policies, including more hard-to-place unemployed, thus making the client group more heterogeneous. Finally, we have seen a strong political belief in the positive effects of using punitive sanctions. Research supports this belief when it comes to clients with high employability and limited problems besides unemployment, but the knowledge-base is rather shaky when it comes to the hard-to-place clients with substantial problems. Using punitive sanctions or other disciplining or coercive measures in frontline work has caused controversy and resistance. In order to qualify our understanding of welfare-to-work policies, we need to take a step closer to where these policies are translated into reality for the target group.

Although policy-makers and scholars have directed increasing attention towards collaborative innovation and knowledge development between frontline agencies and workers and other stakeholders such as citizens and researchers, empirical research has not focused on the (varying) assessment of collaborators regarding what knowledge is “appropriate” to develop. In this article, we examine such knowledge assessments by drawing on a comparative case study of two local innovation projects conducted by the Norwegian Labour and Welfare Administration (NAV) in a four-year service innovation programme. Although they responded to the same call, the projects involved development of two very distinct types of knowledge; one dealt with practice-based knowledge and the other with evidence-based knowledge. We show that whereas the former knowledge type was contested and difficult to transform into practice, the latter prompted few (if any) challenges and was implemented on a relatively large scale. These two projects point to the possible existence of a hierarchy of knowledge in the labour and welfare services, where evidence-based forms of knowledge and methods are regarded as more legitimate and appropriate than forms of knowledge placed “lower” in the hierarchy. We discuss the reasons for and implications of this apparent hierarchy of knowledge for frontline labour and welfare services.

The United Kingdom, as an exemplar liberal welfare state, has been characterized as in the vanguard of “work-first” activation – deploying high levels of compulsion and standardized employability services that seek to move people from welfare to work as quickly as possible. However, despite the extension of welfare conditionality to excluded groups such as lone parents, government-led, work-first employability programmes have often proved ineffective at assisting the most vulnerable to escape poverty or even just to progress in the labour market. We argue that alternative approaches, defined by co-production and social innovation, have the potential to be more successful. We draw on a study of local services targeting lone parents led by third sector–public sector partnerships in five localities in Scotland. Our research identifies a link between programme governance and management (defined by co-governance and collaborative partnership-working) and co-produced street-level services that deliver benefits in terms of social innovation and employability. We draw on 90 interviews with lone parents, and more than 100 interviews with delivery stakeholders and street-level workers, to identify factors associated with positive social and employability outcomes. The article concludes by identifying potential lessons for the governance and delivery of future services targeting vulnerable groups.

European Union (EU) Member States have very diverse social security pension systems with respect to the types of schemes/benefits offered, their redistributive features, as well as the method and sources of financing adopted. Also, the role of the state in securing retirement in old age varies considerably across the EU. According to the European System of National and Regional Accounts 2010 framework, the pension obligations of EU social security pension schemes are now reported in the supplementary Table 29, based on the accrued-to-date liability method. Such a method does not allow the assessment of the financial sustainability of social security schemes, which are typically financed on a pay-as-you-go/partially funded basis, as well as the sustainability of public finances. In addition, while the contributory social security pension schemes, with or without non-contributory components, are included in Table 29, the non-contributory social security schemes are in principle excluded. This article aims to suggest how to enhance the transparency and cross-country comparability of Table 29 results at EU level, by disclosing additional information suitable for evaluating the financial status of contributory social security pension schemes, which would take into account not only the financing method adopted but also the type of benefits offered. From a policy perspective, such additional information would ensure that no certain types of social security schemes are promoted in the EU, and that the clarity and effectiveness of the role of the state in financing a social security pension scheme is enhanced.

This article provides insights into methodological and measurement considerations and challenges from an actuarial and social security policy perspective with reference to actuarial valuation work undertaken in the recent period. It aims at supporting the global discussion to improve the transparency of the reporting of financial liabilities of social security schemes linked to employment-based obligations (contributory), as these are often guaranteed by the government following social security funding rules such as pay-as-you-go and partially funded approaches. The article supports the actuarial profession’s engagement with experts in national accounting and public finance statistics towards providing improved guidance to national governments in presenting a fair and accurate picture of the financial position of their social security schemes with due and unbiased recognition of the social security policy approach decision of any given country. While the reflection of the financial position of social security schemes guaranteeing long-term benefits payable for life is most important in terms of possible public finance implications, care must be exercised in adopting a valuation methodology and indicators that are not biased and which do not distort the interpretation of its financial position. In this respect, challenges remain and there is ample scope for refining methodologies and adopting coherent accounting approaches encompassing policy decisions for funding purposes.