With the implementation of social security policies, countries aim to combat poverty and provide income protection and job security at different stages in life. Within the EU, social security is essentially a national responsibility of each Member State. Due to diversity in the traditions of social security provision, there are considerable differences among countries (Castles 1993; Castles et al. 2010; Svallfors 2010; Vrooman 2012). Given this huge institutional variety, it is important to assess how countries perform with regard to social security.

Our analysis is not limited to the 28 EU Member States, but considers Norway and Switzerland as well. Four indicators lie at the heart of the overall achievement score on social security: contextual poverty, pension replacement rates, non-employment in youth and long-term unemployment. Of the countries under study, The Netherlands, Austria, Luxembourg and Denmark offer their citizens the best protection against social risks. The citizens of Greece, Spain and Romania are found to be less protected.

Countries with good social security performance: The Netherlands, Austria, Luxembourg and Denmark

Although the Netherlands, Austria, Luxembourg and Denmark are overall the best performers on social security, it does not mean that they are in the top four on each indicator. As for poverty issues, Luxembourg performs well, with just 5% of the population living below the poverty line in 2011 (Figure 1). This is the best score for all EU-28 nations, Norway and Switzerland. Norway comes second with 7% of the population experiencing hardship, followed by Switzerland with 9%. In the other countries with the best overall performance on social security, The Netherlands, Austria and Denmark, (less than) one fifth of the population lives in poverty.

Both the Netherlands and Austria are among the top performers on pension replacement rates for all income groups (Figure 2). With regard to low-income groups, Denmark achieves the best results and Luxembourg falls in the range of average performers. Other countries that score relatively well on pension replacement rates are Bulgaria and Hungary.

The four top performers also show very low levels of non-employment in youth, with rates between 5% and 7% (Figure 3). Their scores on long-term unemployment are also relatively positive, ranging from 1.5% to 2.5% (Figure 4). Germany also has a low rate of non-employment in youth. Long-term unemployment is lowest in Norway. Finland and Sweden also score relatively well on this issue, with respectively 1.5% and 1.7% of the working population affected.

Notes: The diagonal line separates the countries that improved their score (located below the line) from the ones that saw their score deteriorate (located above the line).
Source: EU-SILC, SCP treatment

Source: OECD Statistics (ELS Pensions, 2015)

The bottom three in social security performance: Greece, Spain and Romania

What holds for the best overall performers, also holds for the countries at the other end of the ranking: they do not score the lowest on every indicator. Around half of the populations of Greece and Spain is considered poor, but Bulgaria, Latvia, Lithuania, Croatia and Hungary are part of a group with even higher shares of the population living under the poverty line (Figure 1). Romania has the highest level of poverty. The increase in poverty, however, is greatest in Greece.

Around one fifth of youth in Greece, Spain and Romania is non-employed (Figure 3). Several other countries, including Italy, Bulgaria, Croatia and Cyprus, have comparable figures. But Spain and Greece are in a group, along with Italy and Portugal, with large increases in youth unemployment.

Long term unemployment is highest in Greece and Spain, and Romania is among the countries with average performance (Figure 4). On pension replacement rates, though, Romania scores relatively poorly (Figure 2). It coincides with Germany on pension replacement for low-income groups, and with Ireland and the United Kingdom for the average and high-income groups. Scores on pension replacement rates are generally high for Greece and Spain.

Notes: The diagonal line separates the countries that improved their score (located below the line) from the ones that saw their score deteriorate (located above the line).
Source: Eurostat (Young people not in employment and not in any education and training, 2015)

Notes: The diagonal line separates the countries that improved their score (located below the line) from the ones that saw their score deteriorate (located above the line).
Source: Eurostat (Long-term unemployment in active population, 2015)

Read the full chapter on social security here.

References