A System of Socio-Economic Reporting on Europe
Memorandum for the Fifth Framework Programme of the EU
Europe today faces a variety of major challenges. This is not new for the twentieth century, but what does seem new is the highly complex and interrelated nature of the problems, which aggravates the chronic lack of clear-cut solutions. The complexity derives from a concurrence of various developmental problems within all European societies (such as the changing demographic basis of social security), of tensions in the development of the European Union (extension versus deepening, integration versus re-nationalization), and of structural shifts in the world economy. Europe is thus passing through a period in which major institutional adaptations and innovations will be required, and in which the relative standard of living and quality of life of major population groups, whole regions, and even nations will be changing, with unavoidable strains for political institutions at all levels.
This situation also poses challenges for the European social sciences. They must overcome their national confines more courageously, expand their cooperation more forcefully, and improve their instruments of observation and analysis more imaginatively in order to improve our understanding of the ongoing processes, the problems involved, and the solutions available. The development of a system of socio-economic reporting on Europe would be a desirable focus for such efforts. This memorandum concentrates on the possibilities of improving the various instruments of social reporting, distributing them more evenly across Europe, and harmonizing them through increased cooperation. Such a reporting system must be based on a broader understanding of the main characteristics of European society and its long-term development, and should be linked to the search for a European development model.
Over its long history, Europe has developed as a multi-centred system, drawing much of its strength from the competition between its various political, economic, and cultural centres and from the learning processes stimulated by the diversity of institutions and ideas within a common cultural frame. Furthermore, the specific combination of autonomy of a variety of actors with strong collective regulation in Europe has produced a unique form of development in which changes at the micro-level were channelled into large-scale competition and institutional innovation.
Since the nineteenth century, the European nation-state has increasingly standardized its territorial institutions and tried to monopolize collective identity, solidarity, and regulation, thus becoming the focus of competition and institutional change, simultaneously reducing and heightening European diversity. To the extent that the nation-state's regulative power (not to mention identity and solidarity) is not simply shifted to the European level, the multipolarity of Europe will increase again, as will institutional variation.
The era of the nation-state was also the crucial period of modernization in European society, characterized by major growth processes: population growth, with a universalization of marriage and an increasing predominance of nuclear families; economic growth, with a unique, longstanding predominance of industrial employment; and an extension of the welfare state to a degree seen nowhere else in the world. These processes were related to changes in existing institutions or to the creation of new ones which, after some experimentation, soon became nationalized and standardized: for example, national labour markets and national systems of education and social security.
After more than a century, these processes of population growth, industrialization, and state expansion have passed their peak: birth rates have long been declining, the population is greying, and family forms are becoming more and more pluralized; industrial employment has been shrinking, and the shift to a service economy as well as the increasing employment of women have diversified the organization of work and forms of employment; and the welfare states, above all their health and pension systems, have clearly reached the limits of growth. In addition, Europe has turned into a region of immigration, increasing the cultural heterogeneity of its national citizenries; and the identities and solidarities underlying the nation-states' regulative capacities appear to have weakened.
Thus Europe seems to have entered a new period of institutional reform and experimentation, similar to the late nineteenth century when most of the modern institutional and organizational forms were invented. Recent and accelerating changes in the world economy have added to (but did not create) the need for institutional reform, and the conseqences of these changes should be studied in the context of a longer-term institutional adjustment of European society.
In this situation the European Union faces a difficult and somewhat contradictory task: it must ensure that living conditions across Europe do not further diverge (and preserve a realistic hope for some future convergence); and it must not only allow but support institutional experimentation that may also lead to greater variation.
Any attempt to develop a system of regular socio-economic reporting on the European population should be focused on two main goals: first, to monitor living standards and quality of life, their social and territorial differentiation, and their divergence or convergence over time; and second, to study the varying institutional configurations that shape living conditions and life chances. Combining both objectives would make it possible to go beyond a primarily descriptive analysis of living conditions to an explanatory and dynamic analysis of how institutional change and the structuring of individual welfare are related.
Developing a system of socio-economic reporting on Europe geared to these objectives should be seen as a process of decentralized but coordinated efforts. It should be science-based, while drawing on the work of the national statistics offices and of EUROSTAT. It should be based on pooled national resources in combination with EU funding. The EU should provide support for developing and coordinating instruments of social reporting (such as surveys) across Europe, improving information about and access to the various databases, and promoting cooperation among social scientists, social research institutes, and the European institutions.
The following proposal specifies various elements in the development of such a reporting system: first, the main 'traditional' instruments of social reporting, such as social indicator systems, special microdata collections, and general welfare surveys are presented. Next, two possible new elements of reporting are introduced: the monitoring of institutional change and the study of territorial differentiation. Finally, the idea of a series of European social reports is introduced as a focus of concerted action, and the role of social science data archives and database centres in social reporting is examined.
1. Strengthening the traditions of social reporting
Social reporting embraces a variety of traditions, from a more general monitoring of social change on the basis of (systems of) social indicators, to the more specific analysis of individual living conditions based on welfare surveys or other collections of microdata. Starting from early efforts by the UN and in the US, social reporting developed most vigorously in the 1970s: in most countries of Western Europe, by the OECD and the Nordic Statistical Secretariat, and later also by EUROSTAT. After some stagnation in the 1980s, renewed interest in social reporting has become apparent since the early 1990s.
Thus the ground is well-prepared for concerted action based on a variety of national initiatives and established systems. Such action should aim at a more systematic coverage of the whole of Europe, assessing and improving the main instruments, and increasing their coordination and efficiency. At least three elements can be singled out: developing and coordinating science-based national social indicator systems, improving access to and harmonization of microdata, and spreading general welfare surveys.
1.1 Social indicators: Specifying requirements and tasks for the social sciences
Social reporting started with the development of social indicators, with the UN's attempt around 1960 to define a list of indicators for the comparative analysis of the 'conditions of life and work of populations and changes therein'. Until the 1970s, some kind of social reporting based on a systematic use of social statistics developed in most (though not all) countries of Western Europe, mostly (though not always) carried out by the national statistics offices.
At the European level, EUROSTAT began its work on social indicators in 1975 and has published a statistical compendium since 1977, followed in 1991 by its 'Social Portrait of Europe'. As most European statistics are compiled by the national statistical agencies, EUROSTAT's responsibility is primarily to promote comparability and to carry out the integration of national statistics into the Community system. The way in which EUROSTAT harmonizes the national statistics and gives access to its databases is crucial for developing science-based European social reporting.
The most important databases for this purpose are CRONOS (mainly macroeconomic time-series, but also including social statistics), REGIO (see 2.2), and ESSPROS (social protection statistics), since 1995 all contained in NEWCronos. So far, NEWCronos is available only off-line. It should be complemented by meta-information and made available on-line as soon as possible. In addition to improving access to their own databases, EUROSTAT should make a significant contribution to facilitating systematic access to the various national databases which will remain indispensable for comparative European social reporting.
Furthermore, statistics at the European level must be harmonized in such a way that they can still be related to the national statistics. Only then will it be possible to take into account the varying institutional and other national contexts. Without this, the value of comparative social reporting will remain limited. In addition to such context awareness, the specific tasks of the social sciences lie above all in contributing to concept formation (e.g. individual welfare and institutional viability) and indicator construction (e.g. indicators of social inequality and cohesion), and in improving process orientation (as e.g. in social accounting matrices which facilitate dynamic analysis by integrating different statistics) as well as system integration (as e.g. in satellite systems supplementing national accounts) of social indicators as the basis of social reporting.
1.2 Microdata: Improving access and harmonization
Social indicators are largely limited to (national) aggregate statistics. For problem-orientated European social reporting, however, anonymized microdata on individuals, households, and establishments are indispensable. Today a variety of relevant surveys exist at both the national and European levels, but continue to pose problems of data access and data comparability.
At the European level, several official surveys have standard questionnaires or are harmonized post hoc. Among the former, the EC labour force survey is the oldest and still most important. The future of the new EC Household Panel, which should have become a major instrument in European social reporting, seems insecure because its reliability is being questioned, non-response is mounting, and its further funding undecided. Among the post hoc harmonized surveys, the family budget survey is the most relevant.
Access to these microdata is severely limited, however, even if EUROSTAT is now ready to produce on demand aggregate tabulations from microdata at their disposal. Although this is a first step to better utilization of data already paid for by the taxpayer, it is certainly not sufficient for a problem-orientated system of European social reporting. At the national level, access to and costs of anonymized microdata vary greatly. Only in a few cases, above all in Britain and Norway, has access been liberalized adequately (and provided at a reasonable cost) to satisfy the needs of current academic social research, much less of future social reporting on Europe.
This situation is in stark contrast to the academic surveys where microdata are made available via the national social science data archives, a contrast which offers an additional argument in favour of science-based reporting. International academia has responded to problems of access by establishing the micro-databases at CEPS/IN-STEAD in Luxemburg, which are of great importance to the European social sciences. So far, however, their efforts have been limited to ex post harmonization of the income part of family budget surveys (LIS), national labour force surveys (LES), and household panels (PACO). Important sources of microdata, such as micro-censuses, population, and establishment censuses are not accessible, neither via CEPS/IN-STEAD nor via EUROSTAT.
In addition to the urgent need to make microdata from the national statistics offices and EUROSTAT more easily available, also efforts to harmonize social surveys ex ante should be strengthened. Given past experience, however, it is crucial for the scientific community itself to increase its efforts to improve the access and ex post harmonization of existing official surveys via academic institutions as well as to disseminate national academic surveys across Europe. To provide financial support for such decentralized but coordinated efforts would not only be less costly, but could also be more efficient.
1.3 Toward a European welfare survey: Coverage and cooperation
In all countries of Western Europe today, we find labour force and household budget surveys, whereas time budget surveys (in contrast to Eastern Europe) are somewhat less frequent. Only a few countries (UK, D, A, CH) have large-scale multi-topic micro-censuses, while the others often use a variety of special-topic sample surveys (on families, health, housing, etc.). All these surveys are relevant for developing a European system of social reporting. Of special importance, however, is another type of survey: comprehensive surveys on social well-being.
There are two main types of these surveys:
Consensus seems to be growing that both 'objective' and 'subjective' dimensions should be taken into account, as in the German welfare survey.
Comprehensive social surveys have been carried out in about two-thirds of all EU member states, though regularly only in a few, mostly in Scandinavia. As these surveys are mainly academically planned (though commercially executed), a cooperative effort should be made to develop welfare surveys in countries not yet covered, to make the national surveys more comparable, and to harmonize the indicators.
A first step would be to determine the overlap between existing surveys and data. Then, Europe-wide cooperation could be intensified, with EU support, and ideas developed for a more centralized coordination of European welfare surveys. An alternative would be to start by establishing a harmonized European welfare survey, alternating with a social survey on values and attitudes proposed by the European Science Foundation.
2. Exploring new dimensions of social reporting
Social reporting as it developed in the last quarter-century has had two main focal points: individual welfare and the nation-state, reflected in its predominant use of microdata and national aggregate statistics. Both reference points are still important, but less so than in the past. Neglecting the institutional context could be justified when concentrating on a single country in a period of institutional stability. But doing so has always been questionable when comparing nations with different institutional configurations, and it is highly problematic in times of rapid institutional change. In that case, it becomes imperative to include in social reporting an institutional dimension, which requires rather different data, sources, and approaches.
The nation-state will certainly remain the central unit of analysis, simply because most institutions are still national. However, to the extent that, on the one hand, European integration proceeds and, on the other, sub-national territorial units gain more autonomy, it will be necessary to complement the comparison of nation-states and start comparing regions and cities - in an overall European perspective. This is a major undertaking, as the current statistical information systems still reflect the predominance of the nation-states in the development of official statistics since the nineteenth century.
2.1 The institutional dimension: Monitoring welfare state changes
Although it includes attempts to monitor social change in a very broad sense, social reporting in its most articulated forms clearly focuses on individual welfare. In doing so it tends to neglect the institutions that channel the actions of individuals and the production of welfare. The more it strives to broaden its cross-national and intertemporal perspective and move from descriptive to explanatory analysis, the more social reporting must take institutional variations into account. This is especially true in times of rapid institutional change.
A variety of institutions produce 'welfare' in its many forms: families and households, labour markets and economic enterprises, collective bargaining and welfare associations, and the whole complex of welfare state institutions. For several reasons these last are of special importance for a system of European social reporting: as a key element in the specific European model of development, the welfare state structures living conditions and life chances in Europe to a much greater extent than in any other advanced region of the world; everywhere in Europe it has come under pressure for institutional adjustment and reform; and, in principle, it can be influenced by political decisions and public policies more directly than can the private economy or families and households.
A major, and largely new, task for European social reporting therefore lies in developing a cross-national system of welfare state monitoring. This would ideally be a system of regularly updated time series of quantitative and qualitative data and indicators on the major welfare state institutions. It should be constructed so as to achieve two goals: first, to analyse specific national configurations of institutions; and second, to study their impact on individual welfare.
In developing such a system, the work of international organizations offers certain starting points: for social security, the ILO (Costs of Social Security, Comparative Tables on Social Security) and the OECD (databases on social expenditures and public pension schemes); for health, the WHO indicator system and the OECD health data file; for taxation, the OECD database on tax expenditures and the International Bureau of Fiscal Documentation (IBFD) providing institutional information.
At the European level, EUROSTAT's database ESSPROS provides social protection statistics, and DG V provides two EU mutual information systems which provide data on employment policies (MISEP, supplemented for Central and Eastern Europe by SYSDEM) and social security (MISSOC, supplemented by the Council of Europe for other European countries). In addition, in the late 1980s and early 1990s the EU, through DG V, established several other observatories and networks to gather and synthesize information on national policies (for the family, for older people, against social exclusion, etc.); however, most of these have been discontinued.
The international databases, valuable as they are, all pose a number of problems: the usual difficulties of data access and often great delay in publishing figures, few attempts to develop more meaningful indicators, and above all weak links between quantitative and institutional data, making analysis of the national configurations of institutions and their varying impact on individual welfare very difficult, if not impossible.
Perhaps a new kind of European observatory, based on networks of social scientists and research institutes, focusing on more specific policies and institutions, and trying to integrate a variety of sources and data, would be more promising. The greatly varying success of the observatories up to now shows, however, that they would have to be organized on a completely different footing: much more science-based, with greater support from cooperating national institutions, and with more energy devoted to building up common databases.
2.2 The territorial dimension: Social reporting on regions and cities
Social reporting, as noted above, has so far focused on the individual welfare of the nation-states' populations. Using the nation-state as unit of analysis or level of aggregation has always been problematic, however. While the rise of the nation-state was accompanied by the imposition of national institutions and standardization of social and economic structures and cultural patterns, its success in homogenizing population and territory varied greatly. In addition to these regional differences, the European countries have also varied in their urban structures, and cities have shown different developmental patterns and problems.
It is not unlikely that accelerating socio-economic changes will lead to greater territorial differentiation, and that processes of political decentralization will increase the autonomy of subnational actors and their chances for establishing new cross-national networks. This twofold territorial differentiation, together with the goal of keeping territorial inequalities within politically acceptable limits, creates a need for 'subnational' social reporting on both regions and cities.
Resources for such 'subnational' social reporting are even less adequate, however, than those for 'traditional' social reporting. Finding available data for proper spatial units is a major difficulty; data are largely official statistics referring to administrative units, which often makes analysis and comparisons less meaningful. Although all European countries provide a variety of regional statistics, the lack of trans-national coordination limits their comparability.
Initially, therefore, regional social reporting has to rely on EUROSTAT's regional database, REGIO, which however provides most data only at the NUTS2 level and is mostly limited to demographic and economic data. These limitations present a serious obstacle: there is a wide variety of administrative and other process-produced data, but these are associated with almost insurmountable problems of comparability, and levels of aggregation greatly differ among countries. At the same time, the surveys that are useful at the national level are usually much less so at the regional level because of sample size. A 'regionalization' of social reporting will therefore require making administrative statistics more comparable and surveys more suitable for regional analysis.
The problems are even greater at the level of cities: accessible and comparable data are scarcer; defining urban units and city boundaries is more difficult; and analysis of cross-boundary processes would be even more important than for regions. On the other hand, developing urban indicators and urban social reporting has an even higher priority than regional social reporting. In the larger cities, general social and economic changes are usually more rapid, the problems generated more acute, and resources for coping with them often more limited.
A more promising approach has been developed by the Network on Urban Research in the European Union (NUREC) with the new global Large City Statistics Programme (LCSP), in which comprehensive standard questionnaires have been sent out to the administrative bodies of the larger European cities. Any future urban social reporting will have to start from this joint effort.
3. Concerting efforts and ensuring continuity in social reporting
Over the past twenty years, cooperation and a sense of identity within the European social science research community have grown. Today these seem strong enough to launch a concerted effort to develop a science-based Europe-wide system of socio-economic reporting with a common research infrastructure. Such a system would contribute to the understanding of the profound social and economic changes in Europe, as well as to social and economic cohesion. Not least, it would also strengthen the comparative and European dimension of the social and economic sciences and their coherence at the European level, as part of a growing European 'civil society'.
This effort should be viewed in a broad and long-term perspective, irrespective of the Fifth Framework Programme of the EU. To quote Gaston Schaber, "it should include all efforts
While the development of a European system of social reporting by the scientific community should be conceived independently and in a long-term perspective, launching this system within the Fifth Framework Programme requires a narrower focus: concentrating, for example, on a coordinated series of socio-economic reports as a major product of a three-year programme. To strengthen the institutional basis and to ensure continuity of the reporting system, the function and cooperation of the social science database centres and archives should also be reconsidered.
3.1 Concerting efforts: A series of socio-economic reports on Europe as focus of action
A series of socio-economic reports would do more than merely operationalize research objectives for a three-year programme. It could be the key to improving the conceptualization of general objectives and dimensions of a social reporting system in Europe, to specifying the data requirements, facilitating access to existing databases and perhaps creating new ones, improving instruments, and combining descriptive with explanatory objectives.
As a series of various and varying reports it would better reflect the decentralized nature of the enterprise, the variety of sources and data, the diversity of approaches, and not least the necessary pluralism of values underlying a European social reporting system. Conceived as a common series, on the other hand, it could strengthen the cooperative character of the whole endeavour, reduce the fragmentation of the social and economic sciences, and promote an institutionalization of research cooperation across disciplinary and national boundaries.
3.2 Ensuring continuity while planning for the future: The European role of the social science data archives and research-orientated database centres
Ensuring the continuity of a decentralized system of social reporting has many preconditions and will certainly be difficult. A crucial element is adequate storage, proper documentation, and easy access to a wide variety of data. Storing data for secondary analysis has become a major task of social science data archives over the last three decades. Such institutions have been established in a number of European countries (A, CH, DK, D, F, UK, H, I, NL, N, S), but with major differences in size and function. Some of them focus mainly on academic surveys, while others (above all in N and UK) have in addition become providers (or at least mediators) of official statistics to the research community.
With some imagination, archives and research-orientated data centres and services could provide the needed foundation for networks of social science researchers working on European social reporting, not only by storing data and making them available, but also by providing easily accessible meta-information on existing databases. Imagination will be needed because these resource centres have developed very unevenly and in differing forms across Europe, and these differences are unlikely to disappear. In addition to cooperation, what may be needed is a certain functional division of labour. The members of the Council of Social Science Data Archives (CESSDA) have already been discussing a certain division of labour, and with their combined catalogue of decentralized holdings and the search possibilities via the Internet they have developed a tool which could well serve the purposes of a European social reporting system.
Care should be taken, however, by the scientific community that - given the genuinely European and common challenges and issues - no division of labour should lead to narrowly fragmented approaches nor to conservative agreements about established preserves. Any division of labour should serve the aim to provide, in a synergy of efforts, the community of researchers with clearly specified and well-documented data, representative and comparable whenever possible. These data should help to build up the cumulative knowledge necessary to develop and critically test scientific approaches for social and economic reporting. In this context, particular attention should be given also to the necessity of fostering centres with expertise in transforming official statistics (at national and regional levels) into adequately anonymized files for scientific use, in order to set up indispensable Europe-wide databases.
To conclude, again quoting Gaston Schaber, "This proposal is not to suggest that the Commission as such should create and run a European system of socio-economic reporting or that the Commission should finance third parties to do so for the European Union, but to suggest, according to the principle of subsidiarity, that the Commission contribute an adequate share at the level of the member countries and their respective scientific communities to the development of a truly European research infrastructure, able to produce and manage relevant, representative, and comparable information and databases in a bottom-up approach, involving the countries as well as the Community, starting not from zero, but from scientific research institutions, establishments, facilities which on their own have already achieved larger or smaller parts of such an infrastructure-building endeavour.
Prof. Dr. Peter Flora
Peter Flora holds a chair for sociology at the University of Mannheim and is Director of the Mannheim Centre for European Social Research
EURODATA Newsletter No. 5 Article 1, p.2-7