Welfare accounts: Balancing fiscal responsibility and social justice?

Abstract

Globalisation, ageing and structural changes challenge social security systems in high-income countries. We explore welfare accounts as a social policy innovation, addressing a gap in the literature by summarising how welfare accounts function across countries. We contribute to the theoretical discussion on social security reforms by asking: could welfare accounts help address the growing fiscal strain and the carrying-capacity challenges posed by ageing populations? The comparative literature and structured expert interviews suggest that welfare accounts offer a socially just solution, as they do not impact those receiving social assistance or last-resort benefits. The strength of welfare accounts lies in flexibility: while comprehensive adoption of welfare accounts is not necessarily sensible, selective implementation could potentially help to address the challenges of ageing welfare states.

Keywords

Welfare accounts personal social accounts welfare states carrying capacity ageing societies

Introduction

Across countries, increasing public expenditure has exerted significant pressure on governments to balance budgets while maintaining essential services. This fiscal strain is particularly pronounced in welfare states where ageing populations and increasing healthcare costs require more resources. The issue of public and sustainable funding of welfare services, transfers and regulations demands ever more attention. The concept of ‘carrying capacity’ pays systematic attention to the financing side in both social and health policies, as well as funding, as part of the equation of welfare spending in general (Hemerijck et al., 2023; Saari, 2026). Simultaneously with the pressure to raise taxes, the emphasis on individual responsibility has also grown. Even prior to the pandemic, social and health care services were under considerable financial strain because of ageing populations. Moreover, in many high-income countries, large sections of the population are still not covered by adequate social security or health care (see, for example, Bovenberg et al., 2006; Fölster et al., 2003b).

Table 1.

Comparative mapping of welfare-account models in the five country cases.

Country	Welfare regime	Status of welfare accounts	Main account type discussed or adopted
Denmark	Nordic welfare state	Proposed, not implemented	Unemployment; education
Finland	Nordic welfare state	Explored in reform discussions, not implemented	Unemployment; education
France	Corporatist-conservative/Bismarckian welfare state	Partially implemented	Education/training, citizen engagement; hardship prevention
Singapore	Productivist / East Asian welfare state	Long-standing and extensively institutionalised system	Multi-purpose: retirement; health; housing; education; related social policy uses
Sweden	Nordic welfare state	Simulated; selectively present in pension elements	Education accounts

It has long been debated how social policies should be designed in order to best reduce poverty and inequality: should social policies be targeted or universal, and should benefits be equal for all or related to previous earnings and income (e.g. Korpi and Palme, 1998)? Already decades ago, welfare accounts (i.e. personal social accounts) were proposed as an alternative to current income transfers (e.g. Fölster et al., 2003b). The key idea of a welfare account is that instead of taxable income transfers, an individual ‘saves’ and contributes to their own account, which is then used to pay their social security. To some extent, payments can replace taxes, as welfare accounts reduce public spending on social security. In practice, welfare accounts are ordinary savings accounts, with two differences. First, in order to avoid problems of moral hazard, withdrawals from welfare accounts are limited. From a welfare state perspective, moral hazard is a situation where a person has an incentive to increase their exposure to risk, because the full costs in the event that the risk materialises are either partly or fully covered by the welfare state. Second, welfare accounts operate with a degree of redistribution, so that individuals with lower account balances can maintain a certain level of social security (Bovenberg et al., 2008; Fölster et al., 2003b).

Previously, welfare accounts have been most widely studied in Anglo-American literature, and simulations have chiefly been conducted outside the universalistic welfare states (see, for example, Feldstein and Altman, 1998, 2007; Setty, 2017; Vodopivec, 2008; Vodopivec and Rejec, 2002). Only a small number of simulations have been performed in welfare states with universal social security, such as in Sweden (Fölster et al., 2003a) and in Denmark (Bovenberg et al., 2006, 2008; Bovenberg and Sørensen, 2004). More recently, private social security accounts have also been studied in Eastern Europe (Keller, 2019). However, in Western and Nordic welfare states, welfare accounts have relatively recently been proposed or even adopted as part of social security. For instance, France adopted the welfare account scheme Compte personnel d’activité in 2015; and in Finland, social accounts were considered as an option during the social security reform (2020–2027).

We contribute to the theoretical discussion on social security reforms and welfare accounts with a thorough thematic literature review of three types of welfare accounts: unemployment, health and education accounts. We ask: could welfare accounts help address the growing fiscal strain and the carrying-capacity challenges posed by ageing populations? In our analysis, we utilise 18 structured expert interviews conducted in Denmark, Finland, France, Singapore and Sweden. In all countries, rising expenditure is putting pressure on governments, which are reluctant to raise taxes, highlighting the growing emphasis on individual responsibility. To the best of our knowledge, this is the first study to summarise how welfare accounts function across different countries. The following section reviews the previous literature on welfare accounts, and in the third section we outline the research design. The fourth and fifth sections present the analysis, followed by conclusions.

The rationale for welfare accounts

The increasing costs of social protection are forcing many governments to re-evaluate and renew social security systems and social and health care services. Traditional solutions have included implementing higher user fees, reducing benefits, and/or restricting access to services. Instead of employing tax-financed transfers and contribution-based schemes, the consumption-smoothing function of the welfare state can be achieved through savings schemes that link taxes and benefits at an individual level. Previous literature (e.g. Bovenberg et al., 2006; Fölster et al., 2003b) has presented welfare accounts as a potential solution for the renewal of social security. In contrast to collective social insurance schemes, welfare accounts individualise the associated risks, as only the contributions paid by the individual are used to cover the liabilities. Contributions to welfare accounts may replace some taxes and mandatory social insurance contributions that are used to finance welfare benefits; and thus, welfare accounts potentially significantly decrease the state's welfare costs. It has also been suggested that welfare accounts may help manage the moral hazard inherent in traditional tax-based systems; for example, unemployment accounts can reduce the incentive problems associated with an unemployment insurance scheme.

The basic functions of a welfare state include the redistribution of income from rich to poor and the provision of social insurance against income losses. However, in modern Western European welfare states, a substantial percentage of tax revenue is used to finance public transfers that are channelled back over time to the same taxpayers, and life-cycle income is often distributed more evenly than annual income (Bovenberg et al., 2006; Fölster et al., 2003a; Hussénius and Selén, 1994). In other words, a significant proportion of tax revenue is not transferred from high-income to low-income earners, but is instead returned as a form of benefit to the taxpayer.

Before reviewing specific welfare account models, it is useful to distinguish between different types of arrangements that fall under the broad label of welfare accounts. For analytical clarity, welfare accounts can be categorised along three descriptive dimensions: policy field, financing logic and redistributive design. Regarding, first, policy field, in this article we focus on three types: unemployment accounts, health accounts, and education or lifelong-learning accounts. Second, welfare accounts differ in their financing logic. Some models rely primarily on self-insurance, where individuals accumulate contributions in personal accounts that are later used to finance benefits. Others involve supplemented self-insurance, combining individual savings with employer contributions or conditional public support. A third category consists of mixed or publicly backed arrangements, where accounts operate alongside tax-financed benefits or public guarantees. In these hybrid systems, accounts typically cover a limited share of social risks, while the state retains responsibility for minimum protection.

Thirdly and finally, welfare accounts differ in their redistributive design. Some models closely link benefits to individual contributions and involve limited redistribution, while others incorporate conditional redistribution, such as top-ups, debt forgiveness, or transfers to individuals with insufficient savings. These dimensions illustrate that welfare accounts do not constitute a single institutional model, but rather a family of policy instruments that can be integrated into welfare systems in different ways.

Unemployment accounts

Unemployment accounts are probably the most frequently studied welfare accounts, with the first discussions on these taking place in the 1990s. After the initial analyses (see, for example, Cortázar, 1996; Topel, 1990), international literature has continued to maintain a focus on this topic, and the unemployment account literature spans Europe, the US and Latin America (see, for example, Bosch, 2016; Bosch and Esteban-Pretel, 2013; Bovenberg et al., 2012; Brown et al., 2008; Brunner and Colarelli, 2004; Feldstein and Altman, 2007; Fölster et al., 2003a, 2003b; Kock and den Butter, 2001; Kugler, 2005; Nagler, 2013; Peyron Bista, 2024: Robalino et al., 2009; Setty, 2017; Sørensen, 2003; Vodopivec, 2008; Vodopivec and Rejec, 2002).

Unemployment account models are often based on variants of a defined contribution pension scheme. In a simplified employment account, each employee saves a certain percentage of their salary in a separate unemployment account. Costs can also be shared between the employee and the employer. In the event of their unemployment, the employee may withdraw an amount that is equal to the paid contributions. If the account cannot cover the benefits, the state contributes to the costs. At retirement, the employee can withdraw the unemployment funds that have accrued in the account or, alternatively, increase their pension. If the account balance is negative at retirement, the state will forgive the debt (Feldstein and Altman, 2007; Fölster et al., 2003b). In practice, unemployment accounts reduce work disincentives by allowing recipients to keep their own unused unemployment contributions (Robalino et al., 2009).

The effects of unemployment accounts have been studied with various theoretical models (see, for example, Brown et al., 2008; Orszag and Snower, 2002) and simulations (see, for example, Feldstein and Altman, 1998; Vodopivec, 2008; Vodopivec and Rejec, 2002). The theoretical models have suggested that an unemployment account model produces lower rates of unemployment than an unemployment insurance system with the same taxation level; however, simulations that utilised population data produced results that were less encouraging. If insured unemployment is significantly concentrated, it might be difficult for some individuals to finance their own unemployment benefits by saving a moderate share of their lifetime earnings in an unemployment account, and public top-ups would remain necessary for some groups (see, for example, Peyron Bista, 2024).

Compared to unemployment insurance, the unemployment account model changes the distribution of income to the benefit of wealthier citizens (Lassila and Valkonen, 2009; Vodopivec and Rejec, 2002). Unemployment savings accounts have a weak link to active labour market policies, such as job placement, training and skills upgrading. In addition, the lack of risk pooling and redistribution means that workers are exposed to income shocks depending on their work history, making certain groups (part-time workers, repeatedly unemployed and low-income workers) at higher risk than in traditional unemployment schemes (Peyron Bista, 2024).

Health accounts

A health account system consists of two parts: a common fund and a personal health account. The positive aspects are often linked to the savings for public funding. Self-financing reduces the cost for society and thus decreases public sector health care expenditure (Hanvoravongchai, 2002). The ability of a health account system to introduce significant cost savings has been questioned (see, for example, Hanvoravongchai, 2002; Lassila and Valkonen, 2009). However, the moral hazard risk remains low if the treatment choices are directed by the producer and not by the customer. Several studies (Barr, 2001; Hanvoravongchai, 2002; Schreyögg, 2004) have noted that health care service opportunities have had to be limited in order to remain within the planned expenditure. This directive can potentially introduce significant risks to the delivery of health care, as well as increasing inequalities.

Education accounts

Welfare accounts can also be used to fund lifelong learning. While the purpose of unemployment and health accounts is to reduce moral hazard, the aim of education accounts is to secure an adequate standard of living during periods of study. Compared to young adults, the employees engaged in adult education often have more family maintenance obligations and higher housing costs. The key idea of an education account is that the employee and the employer both contribute to a personal savings account. Similarly to an unemployment account, an education account can be cleared at retirement age or used to subsidise a pension (e.g. Fölster et al., 2003b; Lassila and Valkonen, 2009).

Research design: case selection and comparative framework

In this study, we compare five welfare countries: Denmark, Finland, France, Singapore and Sweden. These countries were selected due to variation in welfare account institutionalisation and welfare regime context (Table 1). Singapore represents a mature, most developed and longstanding account-based architecture; France represents partial institutional adoption in a Western European setting; and Denmark, Finland and Sweden represent Nordic welfare states where welfare accounts have mainly been debated, simulated or selectively proposed, rather than comprehensively implemented. We use a comparative design to compare models and reform trajectories analytically, instead of broad generalisation to all welfare states.

In our analysis, we use the Social Policy Innovations in the Wake of Automation and COVID-19 Outbreak dataset (collected 1 October 2020–30 November 2021, funded by the Strategic Research Council, within the Academy of Finland). An invitation letter was sent via email to policy makers, economists and researchers in economics, public policy, social policy, and health sciences of leading relevant institutions: ministries, labour market organisations, universities, research institutions and chambers of commerce. Interviews were carried out anonymously using an online questionnaire that included open-ended, structured questions relating to social policy innovations in the wake of automation and the COVID-19 pandemic. The aim of this type of data collection was to allow participants to extend their responses further than would have been allowed by a survey questionnaire, while still enabling comparative analysis by keeping the questions structured. The complete list of the interview questions is presented in the Appendix, Table 1. The data set was supplemented with literature and document data describing the status of each welfare account.

The structured interview data set collected for this study is used to provide expert perspectives on the development and policy debates surrounding welfare accounts, rather than to evaluate their empirical effects. The expert responses offer insights into how welfare accounts are understood, discussed and assessed by policy specialists in different institutional contexts. Accordingly, the interview data support analytical claims regarding policy framing, perceived strengths and weaknesses of welfare-account models, and differences in how these instruments are discussed across countries. However, the data set does not allow causal conclusions about the effectiveness, fiscal sustainability, or distributional outcomes of welfare accounts. Assessments of these aspects rely primarily on existing literature and prior simulation studies. The interview evidence therefore complements the literature review by illustrating how welfare account ideas are interpreted and situated.

Welfare accounts as social innovations

The Central Provident Fund (CPF) in Singapore is probably the best known welfare account system. CPF was established in 1955 as a simple provident fund to help workers save for retirement by contributing a portion of their monthly income. CPF has expanded from its initial focus to also include other areas of social policy, such as housing, transportation, investments and education (e.g. Phang, 2007; Sherraden et al. 1995; Vasoo and Lee, 2001). In 1984, the Medisave Account was established as a means of saving for hospitalisation expenses, and in 1990, Medishield was introduced to provide medical insurance to assist with covering the cost of long-term and/or serious illness. In 2001, CPF covered 84% of the population directly and nearly the entire population through family ties (Fölster et al., 2003b; Teo, 2017). While CPF has, over time, become less individualistic through back-up mechanisms, its adequacy and coverage have, however, been criticised (e.g. Asher, 1991; Sherraden, 2003).

Thus, despite the generally positive outlook, a Singaporean interviewee noted that there is still a need to reform social security: ‘[…] due to demographic ageing and social transfers that are heavily dependent on intra-generational transfers within a multigenerational family unit’. (I18). Moreover, Singapore's model is vulnerable when full employment and family support weaken (e.g. Low, 2004). The COVID-19 pandemic led Singapore to re-evaluate the existing welfare system: ‘[…] There has been a bubbling conversation about an official unemployment insurance. […] Singapore has never had an official unemployment insurance scheme (at best, there are handouts or assistance on a case-by-case basis). But COVID-19's impact meant that the government had temporarily introduced something like that, but with an idea of phasing it out.’ (I18).

Until recently, Singapore has provided most of the examples of welfare accounts. France, therefore, is an interesting example of a Western welfare state that has opted to partially implement welfare accounts rather than apply them across all the social security sectors. In France, the welfare account scheme Compte personnel d’activité (CPA) was adopted in 2015 with the aim of harmonising and streamlining social security (e.g. Garner, 2016). The scheme combines three different branches of social security: Compte Personnel de Formation (CPF, personal training account), Compte d'Engagement Citoyen (CEC, citizen engagement account) and Compte Prévention Pénibilité (CPP, hardship prevention account). ‘[…] Training accounts and prevention accounts are in use in France. Only the latter is directly linked to social policy. It is meant for people working in hard conditions (“drudgery”). These workers get points, which creates rights to go to training for another job, to work part-time with the same salary, or to be able to retire earlier […]’. (I14). Although the welfare accounts in France have only been in force for a few years and their evaluation is still ongoing, the experts identified a need for further reform of the social security system: “[…] there are too many holes in the French social fishnet, especially for non-insiders (who are not covered by unemployment schemes, for instance) – there are still many different rules depending on status, especially in pension schemes, which calls for a universal regime’. (I14).

While welfare accounts have not been implemented in the traditional social democratic welfare states, they have been debated also in some of the Nordic countries, namely Denmark, Sweden and Finland. In 2005, the Danish Economic Council (Det Økonomiske Råd) proposed that a share of the existing social security should be transferred and then financed with welfare accounts (Råd DØ, 2005)(Det Økonomiske Råd, 2005). The proposed model included early retirement, study grants for university students, periods of unemployment of less than three months, sickness benefits (for a limited period), child benefits and parental leave, because these benefits focus on income transfers during a person's life cycle, and the income transfers between individuals are small. Benefits that are more broadly funded by inter-individual income transfers (such as income support, disability benefits and housing benefits) would continue to be funded by taxes.

Interestingly, the experts from Denmark interviewed were not broadly aware of welfare accounts: ‘I do not think we have things like that. I do not really know what you are referring to’ (I3); ‘I am unfamiliar with the concept of “social accounts”.’ (I4). The limited familiarity with the concept of welfare accounts among some Danish respondents is itself analytically relevant. This may reflect the relatively low policy salience and dissemination of welfare account proposals within the broader Danish policy community. While welfare accounts have been discussed in Danish economic policy reports and simulation studies, the interviews suggest that the concept has not become a widely recognised or central reform instrument in policy debates.

Denmark introduced reforms in the 1990s that dismantled labour market regulations and facilitated the practice of ‘hire and fire’, a concept that became the trademark of the Danish model. Because of its combination of flexible regulations regarding social security, the model was later described as ‘flexicurity’ (Andersen and Svarer, 2007). While the experts interviewed did not recognise a need for a comprehensive social security reform in Denmark, they did agree that certain changes are necessary, even if a comprehensive reform is not required: ‘Social security reforms in Denmark are typically incremental. […] As social inequalities are increasing there is a need for change in my opinion. But of course, it is a political question’ (I3); ‘[…]The need for social security reform at present is mostly about easing access to social security, as previous reforms are showing signs of being too harsh’ (I4); ‘[…] there is a need for strengthening the Danish flexicurity model’ (I9).

In Sweden, welfare accounts were first proposed in the late 1990s when the country was preparing for the adoption of education accounts. However, the reform failed after it was rejected by the Swedish Parliament in the term 1998/1999. ‘Apart from within the pension system where pensions rights are earned on mandatory personal contributions, there are no personal social accounts. Even within the pension system, these pension rights are for the most part linked to a pay-as-you-go system and not to actual accounts […]’.. (I11). In Sweden, research has been conducted to study and review various options. For example, Fölster et al. (2003a) simulated a transition from universal social security to welfare accounts. Their key findings were that social accounts could potentially enhance social security (Fölster et al., 2003a). However, implementation of the accounts would lead to the loss of Sweden's universalist ideology. One interviewee identified a problem associated with further education: ‘[…] personal accounts for lifelong learning have been discussed. But so far, no solution has been found to the problem that those who need adult education the most would have the least money in their accounts and would probably be the least likely to use them.’ (I11).

Compared to Sweden and Denmark, Finland has been a latecomer to the discussion. Welfare accounts were first suggested during the 2010s and the matter gained precedence in the Social Security Reform Committee (2020–2027) (Government, 2019; PMO, 2018; STM, 2022). In 2021, with the aim of incentivising youth investment in human capital, a research group presented a model for a youth social account that combined study grants and a labour market subsidy (Pyykkönen et al., 2021). In 2022, the Social Security Reform Committee initiated a study to evaluate the social account system and its effects as one potential alternative for a future social security model in Finland; however it was not continued to the policy preparation stage.

While there has been an ongoing discussion about the possibility of adapting welfare accounts, there is not much experience of the accounts: ‘The only prefunded account used was the national pension system between the years 1939 and 1956’ (I2). However, ‘[…] Several versions of social accounts, such as unemployment accounts, education accounts, and general life accounts have been suggested […]’ (I2). Yet, the interviewees believed that the implementation of welfare accounts in Finland was an unlikely option: ‘There has been some discussion, but so far it doesn't seem to be a realistic way forward – it is too big of a change compared to the current system. The main goal of social accounts is to take better account of the life-cycle aspect of social security.’ (I5).

Balancing fiscal responsibility and social justice?

Welfare accounts as social innovation imply conceptual and process change, which ultimately aim to improve the welfare and wellbeing of individuals and communities. Figure 1 illustrates how the welfare account model aims to answer many different social security questions. Specifically, the welfare accounts included in Figure 1 target three problem areas: moral hazard, the lack of support for lifelong learning, and the high costs of social and health care. The welfare account model is best viewed throughout the life cycle at the individual level. This perspective differs from the universal social security of the Nordic welfare regime and the welfare regimes based on Beveridge models.

Figure 1.

Welfare account funnel.

Welfare accounts can overcome certain shortcomings of other social security models. Life-cycle income is more evenly distributed than annual income; therefore, in comparison to tax-based schemes, a larger share of the population may consider that the incentives are sufficient. The welfare account model can also help to overcome the moral hazard in social security schemes. Additionally, the increased transparency of the welfare account model ensures that the overlap between costs and benefits is made visible.

Perhaps the most significant weaknesses in welfare accounts are related to the potential increase in inequality. The welfare account model has been criticised for financially disadvantaging the lowest income earners, the unemployed and women (Lassila and Valkonen, 2009). This is the case particularly for health accounts, which face major problems supporting substantial sections of the population, including the chronically ill, patients requiring long-term institutionalised care, and the poor (Barr, 2001; Low, 1998). In general, the ability of welfare accounts to generate significant cost savings can be questioned; for example, if the health care system does not support the savings goal, and if treatment options are selected by the producer and not the customer, the moral hazard effect is tenuous. Furthermore, the potential for delaying medical treatment and reducing access to services may have a negative impact on both public health and spending. This situation could extend beyond medical outcomes such as healthy lifestyles and an early diagnosis to also include, for example, vaccinations.

Education and unemployment accounts, on the other hand, appear to have greater potential to improve welfare schemes; however, these accounts also raise some concerns. As the interviewed experts noted, a key challenge of education accounts is how to direct the funds to the individuals who are most in need of further education. In turn, in comparison to unemployment insurance, the unemployment account model changes the distribution of income in favour of high-income earners. Thus, we argue that unemployment accounts used as a complementary scheme to otherwise effective systems (e.g. a social investment-oriented view of integrated ALMPs to promote employment) have the potential to streamline and improve welfare schemes. We therefore suggest that the key asset of welfare accounts is that they do not need to be established as a comprehensive package; instead, branches of the model can be introduced individually.

Conclusions

Rising public expenditure has placed substantial pressure on governments across the world to maintain balanced budgets while still providing essential services. This financial strain is especially evident in welfare states with ageing populations. At the same time, different areas of existing social security are associated with specific problems: for example, unemployment benefits are connected with an increased risk of moral hazard; in social and health care, the costs and coverage are susceptible to imbalances; and in regard to education, common study grants and benefits do not necessarily support the goal of lifelong learning. We asked if welfare accounts offer an avenue for reform in high-income countries. The analysis, however, does not provide unequivocal answers. On the one hand, welfare accounts can overcome certain shortcomings of other social security models, such as resolving concerns regarding public spending and moral hazard as well as introducing sufficient incentives, transparency and flexibility. On the other hand, the weaknesses of welfare accounts are significant, and health accounts in particular have raised concerns.

Welfare accounts have heightened the risk of increased inequality, as they place low-income earners, the unemployed and women at a disadvantage. Moreover, the asset-based policies of welfare accounts are considerably more regressive than income-based policies, which is a serious weakness. As Sherraden (2003) observed, there are major questions concerning both coverage and adequacy, as asset-based policies have the potential to increase inequality. This shortcoming is significant, given that rapid technological change tends to increase inequality and require more – not less – redistribution (Pulkka, 2021). While welfare accounts can offer a potentially useful scheme for unemployment and education benefits, the possibility of savings-funded self-insurance does not eliminate the need for a degree of tax-funded insurance in other social security sectors (see also Stiglitz and Yun, 2002). Thus, the welfare account model should not be examined as a whole, but, rather, the separate branches of the model should be evaluated individually.

The Nordic welfare states have been recognised for their relatively high capacity to reduce poverty, largely due to the interpretation of equal opportunities as a social investment rather than a poverty policy (Morel et al., 2012). A strong emphasis on needs assessment has been regarded as stigmatising and also a potential pathway to bureaucratic traps (e.g. Korpi and Palme, 1998). From the perspective of the Nordic welfare states and other Western countries with Beveridge-style social security systems, unemployment and education accounts may offer definitive strengths in comparison to current schemes. However, according to previous research and the findings of this article, health accounts have more apparent weaknesses than strengths in comparison to tax-funded schemes. Thus, health accounts appear to be fundamentally incompatible with universal health care.

To conclude, welfare accounts are not a single reform model; their implications depend on whether they are designed as substitutive, supplementary, or hybrid arrangements, and the five cases suggest that in welfare states, selective hybrid forms are institutionally more plausible than comprehensive substitution. The comparative literature and expert material suggest that welfare accounts could potentially provide a socially just solution for welfare states with growing fiscal strain and carrying-capacity challenges posed by ageing populations, as welfare accounts do not affect those receiving social assistance or last-resort benefits. While welfare accounts can address certain shortcomings of other social security models, their weaknesses are also notable. Nonetheless, we argue that the strength of welfare accounts lies in their flexibility, as they can be introduced individually by selective implementation, i.e. ‘cherry-picking’, rather than as a comprehensive overhaul. Overall, the key strength of welfare accounts is that they do not need to be combined, but can be introduced individually. While this study does not establish whether these models improve fiscal sustainability in practice, it identifies the institutional conditions under which such claims are made.

Supplemental Material

sj-docx-1-ejs-10.1177_13882627261446303 - Supplemental material for Welfare accounts: Balancing fiscal responsibility and social justice?

Supplemental material, sj-docx-1-ejs-10.1177_13882627261446303 for Welfare accounts: Balancing fiscal responsibility and social justice? by Johanna Peltoniemi and Heikki Hiilamo in European Journal of Social Security

Footnotes

Acknowledgments

The authors wish to thank the two anonymous reviewers, as well as the editor, for their constructive comments on the manuscript. The authors also thank the experts who participated in the interviews. The contribution of colleagues who collected the Social Policy Innovations in the Wake of Automation and COVID-19 Outbreak dataset is also gratefully acknowledged.

Data availability statement

The data collected for this study are not publicly available due to the conditions agreed with the informants, but may be available from the authors upon reasonable request and with permission from the participants.

Declaration of conflicting interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Ethical approval and informed consent statements

No personal data were collected for this study. Participation in the interviews was voluntary and based on informed consent.

Funding

The authors disclosed receipt of the following financial support for the research, authorship and/or publication of this article: this work was supported by the Strategic Research Council, (grant number 313395 Project Manufacturing 4.0 – Reshaping social , Special funding for COVID-19-related research).

ORCID iDs

Johanna Peltoniemi

Heikki Hiilamo

Supplementary material

Supplementary material for this article is available online.

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