What is social investment?
Social investment refers to public spending on labour market, skills and social policies that aim to improve people’s well-being while stimulating economic growth. It helps build human capital and increase productivity. It also supports the economy during downturns by reducing social risks and future social costs. Private social investment is not considered within the scope of the Hub.
Social investment includes:
- policies improving education, such as early childhood education and care programmes
- lifelong learning, skills training and vocational training
- active labour market policies
- inclusion policies, like support for integrating persons with disabilities or illnesses
- tax and benefit reforms to increase labour market participation
When combined, these policies may increase employment outcomes more effectively, compared to when applied in isolation. Likewise, higher social and economic effects may result from a stronger interaction between different social investment intervention fields.
Over the life course, social investment generates returns in a virtuous circle, improving employment opportunities, well-being and gender equality, while reducing intra- and intergenerational poverty.
What is the Social Investment Knowledge Hub?
This Hub was launched in 2025 to promote evidence-based policymaking in labour, skills and social policy. It was set up by the European Commission, in cooperation with the Employment Committee (EMCO), the Social Protection Committee (SPC), the Economic and Financial Committee (EFC) and the Economic Policy Committee (EPC). It builds on prior work done by the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) and the Informal Working Group on Social Investment, set up under the Spanish and Belgian Council Presidencies.
The Hub offers:
- academic research and evaluation tools
- exchange of best practices at EU and national level
- information on support opportunities for EU Member States
- documents from events and meetings
- key contacts and resources
The EPSCO Council Conclusions of June 2024 are a key outcome of the work on (public) social investment and its economic returns conducted in the EPSCO filière and the Informal Working Group on Social Investment under the Spanish and Belgian Council Presidencies. They stress the mutually reinforcing nature of people’s wellbeing and economic growth and highlight that well-designed and evidence-based labour market, skills and social policies can support both economic and social objectives.
In particular, these policies can foster economic growth via their impact on human capital and productivity, including via stronger labour force participation and innovative capacity and a faster absorption of new technologies and/or labour supply.
The Conclusions call on
- Member States to consider strengthening their evaluation capacity, using EU funding and technical support and using the Voluntary Guiding Principles for policy design
- the Commission to consider establishing a knowledge hub, promoting mutual learning, improving the production and use of data by Member State administrations, improving the accessibility and timeliness of social data, as well as enhancing EU technical support in this area
- the Commission in cooperation with the EMCO and SPC to facilitate policy evaluations by Member States by building on the Voluntary Guiding Principles, to enhance mutual learning opportunities and to continue monitoring the effects of labour market, skills and social policies in the Member States
Voluntary guiding principles were adopted by the June 2024 EPSCO Council to complement the Council Conclusions with actionable guidelines on assessing and evaluating the economic effects of reforms and investments in the labour market, skills and social policy domains, based on a common understanding among Member States.
They highlight key principles to inform evaluation practices in relation to existing evidence, available methodologies, relevant indicators and statistical arrangements as well as best practices.
Estimating the returns of social investment
Quantifying the effects of social investment on employment, productivity, economic output, poverty and social inclusion is key for policymaking and assessing the effectiveness and efficiency of social spending.
On the methodologies of estimating and measuring the returns on investment, the following guidelines have been produced:
- Voluntary guiding principles for EU Member States for evaluating economic effects of reforms and investments in the labour market, skills and social policy domains developed by EMCO and SPC and endorsed by EPSCO
- Commission Better Regulation toolbox including a chapter (8) on impact assessment with cost-benefit analysis
- Communication on distributional impact assessment to assess the impact of tax benefits reforms on different income groups
- Working document of the informal working group on social investment presenting methodologies tailored to assess returns generated by social investment policies
- Study on assessment of micro and macro-economic returns of social protection expenditure including a review of methodologies
- Design and commissioning of counterfactual impact evaluations - Publications Office of the EU
Scientific background material - topics:
- Education, including early childhood education and care (ECEC)
- Lifelong learning, up- and re-skilling, and vocational training
- Active labour market policies (ALMPs)
- Active inclusion policies, health measures, and other policies targeted at disadvantaged groups
- Reforms of tax-benefit systems
- Complementary effects of policies
- Using administrative linked-data
EMPL-F4-UNIT
ec [dot] europa [dot] eu (Contact DG EMPL Analysis and Statistics Unit)
EMCO-SPC work
Joint committee discussions in the form of dedicated EMCO-SPC agenda points aim to advance the work on social investment by building knowledge and consensus on the economic and social returns of labour market, skills and social reforms and investments. This is complemented by the exchange of best practices via the organisation of devoted Mutual Learning events under the EMCO and SPC programmes and related notes.
Empl-emcoec [dot] europa [dot] eu (Contact the Employment Committee)
EMPL-SPC-SECRETARIATec [dot] europa [dot] eu (Contact the Social Protection Committee)
Technical support
Member States interested in expanding capacity to estimate social investment returns can explore:
For ESF+
Centre for Research on Impact Evaluation
Opportunities for EU-funded technical support
Technical Support Instrument (TSI)
Specific tools
Contact us by email
empl-f1-unitec [dot] europa [dot] eu (DG EMPL EMCO unit)
empl-d1-unitec [dot] europa [dot] eu (DG EMPL Social policies unit)
