The future of work and its implications for social protection and the welfare state
Franziska Gassmann & Bruno Martorano
#2019-039
During the twentieth century, welfare states were instrumental in
confining economic and social inequalities in Europe. Stepping into the
twenty-first century, labour market risks have transformed. The
unprecedented technological transformation has changed the way we work.
The trend towards new forms of employment is no longer a marginal
phenomenon. People switch between jobs, type of employment or
(temporarily) leave the labour force. Across OECD countries, 16% of
workers are self-employed and another 13% are on temporary employment
contracts (OECD, 2018b). Employment became more precarious and labour
market relations much more diverse. This raises the question how
societies can take on the opportunities, challenges and risks that the
rapid technological development may bring. The changing nature of work
along with other challenges, such as demographic ageing, changes in
family structures, globalisation of trade, or migration necessitates
adaptations to the welfare state in order for it to continue functioning
effectively and efficiently. This paper reviews the challenges for
universal social protection in a rapidly changing world of work and
discusses policy options for social protection systems that protect and
stimulate human development. We first review current trends and
predictions as to how the future of work might look like. New types of
jobs and forms of employment are already on the rise, which has effects
for individual workers and society. We then discuss the implications for
social protection and the welfare state. The changing nature of risks
associated with new forms of employment may require a redesign of
current social protection systems. The discussion provides possible
solutions and country examples on changes in social protection systems
and financing strategies, including reforms of current social insurance
schemes, social assistance programmes and active labour market policies.
Keywords: non-standard employment, social protection, Europe
JEL Classification: H55, I38, J21
