Poverty reduction and social security: Cracks in a policy paradigm

Poverty reduction rests on the mechanisms of horizontal and vertical solidarity and on prevention and repair of social risks. In this contribution, we argue that in contemporary welfare states the poverty-reducing capacity of existing social security systems perceive inherent limitations. Focusing on Belgium, we present and discuss empirical indications of a persistent (over a period of at least 30 years) decline in poverty reduction through social transfers, particularly among households who are highly dependent on such transfers. Firstly, we show that prevention and repair have failed to contribute to a reduction in the proportion of work-poor households who are highly dependent upon social security and face a high (rising even) poverty risk. Secondly, we find that that given the fragmentation of social risks - in terms of both ex-post poverty outcomes and ex-ante social stratification - horizontal redistributive mechanisms through risk pooling have become less obvious, especially in respect of unemployment. Thirdly, it appears that the mechanisms of vertical solidarity also face inherent limitations. In a final section we summarize some important research questions for the future and potentially worthwhile policy avenues to resolve the question of how social policymaking might succeed in the future where it has failed in the past.