Switzerland

   

Social Policies

#9
Key Findings
Despite some gaps, generally successful outcomes give Switzerland’s social policies a good overall ranking (rank 9) in international comparison. Its score on this measure is unchanged relative to its 2014 level.

The quality of the education system is high, but students of low social status are less likely to go on to higher education. A new focus on vocational training is intended to reduce the influx of European labor by producing more high-skilled Swiss workers. Social-assistance policies largely prevent poverty, but tensions over welfare benefits provided to foreigners are increasing.

Health care quality and inclusiveness is excellent, but the system is very expensive, and cost-containment efforts are meeting with resistance. Family policy is a relative weak spot. Family-benefit spending is low, and pre-primary education offerings lag behind international norms. A pension-system reform was voted down by the public in a 2017 referendum.

Integration policy, while varying by canton, has not been broadly successful, and naturalization can be very difficult. While overall xenophobia rates are not extreme, an anti-foreigner right-wing populist grouping is the strongest political party. While crime rates are low, the breakdown in Schengen rules led to new border controls in 2015.

Education

#8

To what extent does education policy deliver high-quality, equitable and efficient education and training?

10
 9

Education policy fully achieves the criteria.
 8
 7
 6


Education policy largely achieves the criteria.
 5
 4
 3


Education policy partially achieves the criteria.
 2
 1

Education policy does not achieve the criteria at all.
Education Policy
8
Switzerland’s education system is strongly influenced by the country’s federal and decentralized structure, as education policy falls under the jurisdiction of the cantons and municipalities. The system provides a high-quality education. The university system performs very well, as is the case in many other small and open European countries. Vocational training is very solid and seems to be one of the most important factors in the low levels of unemployment, particularly among younger people. The permeability of vocational and tertiary education has improved as compared to other countries. The number of students enrolled at universities, universities of applied sciences and colleges of education increased by 73% between 2000 and 2017. The share of female students increased from 39% in 1990 to 51% in 2017. While, the number of students at universities increased by 50% and the number of students at universities of applied sciences tripled between 2000 and 2017.

While women and – with some exceptions – persons from peripheral regions have equal access to higher education, the Swiss education system continues to discriminate at all levels against students from families with low social status. There is no empirical evidence that the education system discriminates against foreigners born in the country. Their lower success rates can be explained as a special case of discrimination against students from families with low social status.

Since 1998, Switzerland has institutionalized a system of universities of applied sciences. Students with vocational training can acquire a diploma to enter these universities either during their training or in a special course lasting one year after they have finished their apprenticeship.

There is, however, a federal particularity in higher education. Cantons such as Geneva, Basel-City and Ticino have followed international trends favoring general qualification for university entrance, while others, especially in the German-speaking parts of the country, have focused on a split system of university and vocational education. Thus, in the canton of Ticino, 50% of all 19 to 21 year olds acquire the matura secondary-school exit diploma, allowing them to go on to university or a university of applied sciences; in the cantons of Geneva and Neuchatel this figure is 45%, while in the canton of Obwalden only 23% gain direct access to a university or university of applied sciences (2016). However, the effect of this “federal” discrimination is somewhat reduced by permeability within the school and university systems.

The vocational-training system also offers considerable career prospects. In particular men with vocational training have similarly high employment rates over the course of their work life as men with tertiary education. However, there is a significant difference in earnings. At the age of 50, the median annual earnings of a male academic is about CHF 125,000, in contrast to about CHF 80,000 for a male worker with vocational training. Since 2014, when the public voted for the initiative opposing mass immigration with the intention of capping immigration from EU countries, the government has tried to strengthen vocational and higher vocational training programs. The aim was to increase the number of highly skilled workers. The underlying assumption was that with more highly skilled Swiss workers, the inflow of European labor could be reduced.

Resource allocation within the educational system appears to be very efficient. In general, the quality of the Swiss education system is outstanding. However, given the strong impact of parents’ social status on access to higher education, there are questions about overall equity in terms of access.

Citations:
dievolkswirtschaft.ch/de/2016/11/korber-oesch-11-2016

Social Inclusion

#7

To what extent does social policy prevent exclusion and decoupling from society?

10
 9

Policies very effectively enable societal inclusion and ensure equal opportunities.
 8
 7
 6


For the most part, policies enable societal inclusion effectively and ensure equal opportunities.
 5
 4
 3


For the most part, policies fail to prevent societal exclusion effectively and ensure equal opportunities.
 2
 1

Policies exacerbate unequal opportunities and exclusion from society.
Social Inclusion Policy
8
In contrast to many Western European countries such as Germany, Switzerland has recorded no major increase of income inequality over the past 20 years. The country has largely been successful at preventing poverty. This is due to an effective system of social assistance, in particular with regard to older generations. It is rare to fall into poverty after retirement. The main social-insurance programs regulated on the federal level (addressing sickness, unemployment, accidents and old age) work effectively, are comparatively sustainable and provide a generous level of benefits. Social assistance is means-tested, consequently some stigma is attached to its receipt.

Life satisfaction is very high, income inequality is moderate and stagnant, the share of working poor in the population is small and gender inequality has been reduced substantially in recent years. Nonetheless, some problems and tensions relating to social inclusion are evident.

First, the transition to a knowledge-based service economy entails new social risks. These will be faced most by workers unable to cope with the challenges of this new economy. These vulnerable workers include young people who lack either the cognitive or psychological resources to obtain sufficient training and begin a career, single mothers who are unable to finish vocational training, highly skilled female employees who cannot reconcile work and family, and persons (typically women) who must care for elderly relatives. Like most continental welfare states, Switzerland has not sufficiently reformed the welfare system to address the challenges of a service-based economy. There is, however, considerable variance between local communities in the degree to which they address these challenges.

Second, tensions between Swiss citizens and foreigners over the benefits provided by the welfare state, as well as their financing, are increasing. In 2017, the unemployment rate of foreign workers (representing 31% of the workforce) was 2.3 times higher than the unemployment rate of Swiss workers. The share of recipients of social assistance was 2.2% for Swiss nationals and 6.2% for foreign nationals (2015). The share of social assistance recipients varies strongly by nation. It is highest among non-EU citizens. On average, EU/Efta citizens have almost the same share as Swiss citizens, while Germans have a lower social assistance share than Swiss nationals. It should be noted that unemployment and poverty is most pronounced among low-skilled workers, where immigrants are over-represented. At the same time, highly skilled foreign employees subsidize a Swiss welfare state that benefits low-skilled foreign workers and middle-class Swiss workers (BSV 2015).

Also, some native workers view the growing population of foreign workers as burdening infrastructure (e.g., railways and highways), increasing competition on the housing market, and tightening competition for highly paid and desirable jobs. This state of affairs has fueled a number of conflicts, sparking tensions and frustration on all sides. To date, there has been no constructive discussion and search for solutions within Swiss society, a process that could include the termination of the mythology attached to sovereign Swiss citizenship. Instead, right-wing populism is on the rise, with the right-wing populist Swiss People’s Party (SVP) becoming the strongest political force in the country.

Citations:
BSV (Bundesamt für Sozialversicherungen), 2015: Faktenblatt – Auswirkungen der Personenfreizügigkeit EU/EFTA auf Sozialversicherungen und Sozialhilfe, available at: http://www.bsv.admin.ch/themen/internationales/aktuell/index.html?lang=de

Health

#5

To what extent do health care policies provide high-quality, inclusive and cost-efficient health care?

10
 9

Health care policy achieves the criteria fully.
 8
 7
 6


Health care policy achieves the criteria largely.
 5
 4
 3


Health care policy achieves the criteria partly.
 2
 1

Health care policy does not achieve the criteria at all.
Health Policy
8
Health care in Switzerland is said to be qualitatively excellent. According to the OECD, its health system is among the best in the OECD. Mandatory health insurance ensures that the total population is covered. However, care is expensive. Health insurance premiums (at constant prices) have nearly doubled over the past twenty years. Cost efficiency is a potential problem, in particular with regard to the organization of hospitals. Life expectancy is very high, life expectancy at birth is 81 years for males and 85 years for females. As of 2015, a 65-year-old male could expect to live for another 19 years on average, while a woman of the same age could look forward to another 22 years. This is more than one additional year compared to Germany and Austria, the same as in Italy and one year less than in France. Obviously, the health care system is important in this respect but is not the only explanatory variable. Differences may also be due to the country’s socioeconomic resources, natural environment or other variables.

Health insurance is managed according to a very liberal formula. Premiums for health insurance do not depend on income, and premiums do not take into account the number of family members. Hence, insurance must be bought for each member of the family, although premiums are reduced for children. In recent years, this liberal model has been modified through the provision of subsidies for low-wage earners and their families. These subsidies vary by canton, and policy change is frequent. For example, the canton of Bern reduced subsidies in recent years. More recently, however, a popular vote forced the cantonal administration to reestablish the former system of subsidies. In general, health care reforms have not been particularly successful in terms of improving efficiency or controlling the structural rise in health expenditures. In 2016, health expenditure was equal to 12% of GDP, compared to 17% in the United States, 11% in Germany and France, and 9% in Italy.

Health care insurance is provided by a large number of competing mutual funds (non-profit insurance programs), all of which are required to offer the same benefits. Hence, there is no competition in the area of benefits, but only in the field of premiums, which is largely a function of administrative costs and membership structure. Considerable discussion has focused on whether this competitive market structure should be replaced by a single insurance company. In 2014, the people decided in a popular vote to retain present system. Currently, a number of attempts to curb the large increase in health expenditures are meeting stiff resistance from vested interests, such as doctors, hospitals or health-insurance funds.

Even given these problems, the quality and inclusiveness of Swiss health care has shown itself to be outstanding, and there is no reason to expect any major change in this respect in the coming years. There remains, however, some concern about the centralization of medical services and sufficiency of medical coverage in marginal regions.

Families

#34

To what extent do family support policies enable women to combine parenting with participation in the labor market?

10
 9

Family support policies effectively enable women to combine parenting with employment.
 8
 7
 6


Family support policies provide some support for women who want to combine parenting and employment.
 5
 4
 3


Family support policies provide only few opportunities for women who want to combine parenting and employment.
 2
 1

Family support policies force most women to opt for either parenting or employment.
Family Policy
4
In international comparison, Swiss family policy has done relatively little to enable women to enter the workforce. Policies to reconcile work and family lag very much behind other comparable modern societies. Overall spending for family benefits is low in international comparison and Switzerland ranks very low with regard to length of paid maternity and parental leave as well as enrollment of children between 3 and 5 in formal pre-primary education. One major exception is the strong increase in enrollment of children 0 to 2 years of age: from 16% in 2008 to 38% in 2015.

A January 2009 federal law providing subsidy payments to families has done little to change the country’s ranking in international comparison nor has it changed the substantial variation between cantons, one of the most salient characteristics of Swiss family policy. The new federal law defines minimum child and education benefits, but cantons may add a variable amount to this basic federal benefit level.

In general, Swiss family policy has a clearly conservative outlook with a strong liberal undertone. It is mildly supportive of the traditional family: there are some tax deductions and a period of parental leave offered to mothers (but not to fathers) as well as a very limited number of childcare facilities. Sufficient signatures have been collected for a vote on parental leave for fathers. However, at the time of writing, it is doubtful whether the initiative will gain the necessary majority in a popular vote to succeed. There are substantial variations on the cantonal and municipal level (see Stutz et al., 2017). The canton of Ticino has a very generous family policy aimed at helping mothers reconcile work and family; other cantons (and their municipalities) frequently fail to offer any substantial help (e.g., childcare facilities) on a broad scale. Differences and reform dynamics are particularly pronounced between municipalities with regard to external childcare. Local communities with minimalistic family policies co-exist with municipalities, which strongly facilitate the reconciliation of work and family for young mothers.

Likewise, tax policies providing incentives either to stay at home or reenter the labor market vary from canton to canton. However, taking the median canton and municipality, the portrait of a liberal-conservative family policy applies. Policies tend to create incentives for young mothers to stay at home during the first years of their children’s lives. Afterward, mothers are provided with reasonable opportunity to find employment; however, these are in most cases part-time jobs. This allows mothers to care for their children, while also having some limited employment. Taking part-time jobs usually reduces the ability to have a sustained career as compared to the opportunities offered by full-time employment (Bundesrat 2017, BfS 2017). Hence, the system works in the sense that it mobilizes women within the labor market, but without giving them opportunities for income and career advancement equal to those afforded to men – with considerable regional variation.

Citations:
Bundesrat der Schweizerischen Eidgenossenschaft 2017: Familienbericht 2017, Bern: Bundesrat.
Bundesamt für Statistik 2017: Familien in der Schweiz. Statistischer Bericht 2017, Neuenburg: BfS
Stutz, Heid; Livia Bannwart, Victor Legler 2017: Familienberichte, Familienleitbilder und Familienkonzepte der Kantone. Forschunsgbericht Nr. 1/2017, Bern: Bundesamt für Sozialversicherungen
These reports are accessible via: https://www.admin.ch/gov/de/start/dokumentation/medienmitteilungen.msg-id-66484.html

Pensions

#3

To what extent does pension policy realize goals of poverty prevention, intergenerational equity and fiscal sustainability?

10
 9

Pension policy achieves the objectives fully.
 8
 7
 6


Pension policy achieves the objectives largely.
 5
 4
 3


Pension policy achieves the objectives partly.
 2
 1

Pension policy does not achieve the objectives at all.
Pension Policy
10
The Swiss pension system is based on three pillars, each with its own logic of financing and redistribution. The underlying concept is that pension income should not fall below the subsistence level, and should provide 60% of average pre-retirement income. The first pillar guarantees a basic income. The minimum benefit level for a couple as of 2015 was CHF 28,200 (about €24,500) per year, while the maximum benefit was CHF 42,300 (about €36,800). Employers and employees finance this through contributions. It is a pay-as-you-go system, and is highly redistributive, since the maximum benefit level for couples (provided to high-income earners) is just 1.5 times that of the minimum benefit level, while contributions are proportional to income.

The second pillar is a funded system financed through contributions by employers and employees. Contributions and benefits are proportional to income. Employees whose income from the first pillar already covers about 60% of their wage income are not entitled to this system. Many pension programs, particularly in the public sector, are very generous, and provide pension incomes (first and second pillars combined) that exceed 60% of previous income.

The third pillar takes the form of personal tax-deductible savings of up to CHF 6,768 (about €5,900) per year. This system benefits high-income groups, since they can afford to put aside these sums and have the highest returns on these savings given the tax advantages.

Demographic changes will present major challenges to the first pillar over time. Provided there is no major change in GDP or productivity growth rates, the ability to sustain this pillar will be strained unless the average age of retirement (currently 65 for men and 64 for women) is increased or benefit levels fall. However, given the solid basis of the pension system overall, Switzerland faces less pressure than many other European countries to adapt to demographic change. Switzerland has tried to modernize its system at a relatively early stage. In September 2017, an ambitious reform proposal of the government failed in a popular vote – as many other reform projects in this field have failed over the last 20 years. At the time of writing, the government is trying to find the necessary majorities for a new reform project, which in all likelihood will be less ambitious and comprehensive. In this regard, some lessons can be learned from previous referenda on pensions: there are no majorities for substantial retrenchment, in particular with regard to an increase in the age of retirement. Likewise, there are no majorities to increase the generosity of the system if this endangers its financial sustainability. Consequently, any successful reform must consist of various components which compensate losers in order to win a majority of voters. However, these compensations need to be carefully calculated.

With regard to poverty prevention, the pension system is highly efficient. Every citizen can claim additional payments if he or she is not entitled to the first pillar’s minimum pension. The system as a whole has a high degree of intergenerational equity, as it rests on three different pillars, and only the first pillar is based on intergenerational payments.

Financial sustainability will be a potential problem over time, but remains stronger than in comparable countries such as Germany.

Integration

#11

How effectively do policies support the integration of migrants into society?

10
 9

Cultural, education and social policies effectively support the integration of migrants into society.
 8
 7
 6


Cultural, education and social policies seek to integrate migrants into society, but have failed to do so effectively.
 5
 4
 3


Cultural, education and social policies do not focus on integrating migrants into society.
 2
 1

Cultural, education and social policies segregate migrant communities from the majority society.
Integration Policy
7
For many years, Swiss integration policy was predicated on the perception that foreigners were “guest workers,” whose limited stay meant that broad efforts to encourage integration were unnecessary. As many foreign workers gained access to unlimited work permits between the mid-1970s and the mid-1990s, the policy approach grew inappropriate over time. Accordingly, a number of efforts to improve integration have been made, starting as early as kindergarten. Nonetheless, integration policy cannot broadly be called a success in Switzerland, particularly given the very high share of migrants in the population (accounting for about one-quarter of the country’s residents). Yet if the lack of a coherent federal integration policy is undisputable, this does not mean that integration policy is failing as a whole. Many local authorities are doing a good and sometimes innovative job of integration, especially for second-generation migrants.

According to OECD statistics, second-generation migrants in Switzerland perform better in school and are better integrated into the labor market than in other European countries. This is not to say that immigrants have equal opportunities in all respects. If immigrant unemployment rates and dependence on social aid are above the national average, this is due to the fact that the share of low-skilled workers with a correspondingly higher risk of unemployment is also above average among immigrants. But the lack of a coherent integration policy may add to the problems, and social discrimination is not limited to the labor market. Within the housing market, for instance, some groups of immigrants may find it comparatively difficult to rent apartments.

With regard to naturalization, 43,000 foreigners were granted Swiss citizenship in 2016. Calculating the number of naturalizations as a share of all migrants actually living in the country, the Swiss rate of naturalization is very low in comparison with other Western democracies. In 2016, about 2% of resident foreigners acquired Swiss citizenship. Only some of the new democracies in Central and Eastern Europe and a few Western democracies (e.g., Austria and Germany) have similar or lower naturalization rates. The naturalization procedure is burdensome. As naturalization in Switzerland is a bottom-up process that starts at the level of the commune, considerable regional differences are evident, with some communes and cantons pursuing a liberal naturalization policy, and others acting more restrictively. These regional differences show up also in the issue of political rights. A few cantons and communes grant political-participation rights to foreigners, even though the federal government does not. Thus, with regard to integration, naturalization and legislation on political rights, we find a bottom-up approach rather than federal standards.

In Switzerland, as in all modern societies, some segments of society suffer from globalization and, in particular, from the free movement of labor. These “globalizaton losers” have particularly likely to hold xenophobic attitudes – to insist on “my country first”-positions – and, consequently, to vote for right-populist parties. The Swiss Peoples Party is the political party with the strongest electoral support. It has been particularly successful in mobilizing these segments of society. Therefore, on the one hand there, is limited prospect for a more generous and liberal integration policy in the near term given the strength of integration-averse political actors and citizens. On the other hand, as a comparative analysis of European Social Survey data shows, Switzerland belongs to the least xenophobic societies in Western Europe, together with the Nordic countries; for example, the country is much less xenophobic than Austria, the United Kingdom and France.

Safe Living

#3

How effectively does internal security policy protect citizens against security risks?

10
 9

Internal security policy protects citizens against security risks very effectively.
 8
 7
 6


Internal security policy protects citizens against security risks more or less effectively.
 5
 4
 3


Internal security policy does not effectively protect citizens against security risks.
 2
 1

Internal security policy exacerbates the security risks.
Safe Living Conditions
9
Switzerland has improved its internal security through its integration into the European Schengen/Dublin regime. However, the country’s participation remains domestically controversial, as right-wing populist actors have accused center-left politicians of cooperating in an inefficient European security network.

With the de-facto break-down of the Schengen and Dublin rules in 2015, Switzerland resorted to more systematic controls at its borders. Having already had a comparatively high asylum-seekers-to-population ratio before the refugee crisis of 2015 and 2016, Switzerland was largely spared from the dramatic refugee influx observed in Germany, Denmark and Hungary. In 2017, there were only 14,000 new asylum seekers, as compared to 40,000 in 2015 during the refugee crisis and 23,000 in 2013 (i.e., the year before the wave of asylum seekers to Europe).

Internal security policy has developed as a collaborative policy field, in which various international and national governmental actors interact with private organizations.
 Given the country’s comparatively low crime rates, and the public confidence shown in the police and the justice system, internal security policy can be deemed a success.

On a general note, safe living conditions are strongly supported politically even if this entails substantial costs. For example, in 2016 three popular referenda were approved related to security: a decision on an additional tunnel across the Alps (Gotthard) increasing road safety at the cost of the environment, a decision on the competences of the intelligence service related to combating terrorism at the cost of individual privacy rights, and a decision on a long-term nuclear power phase out at the cost of the environment. Likewise in 2017, the public supported a Federal Decree on Food Security which many observers considered to be superfluous. There are, however, limitations to the quest for safety: on a decision to expel criminals of foreign origin (adopted in 2010), voters supported an alternative in 2016 that respects international law and human rights. Hence, safety is not desired at all costs. Nonetheless, safe living conditions are an important motivator of political behavior among citizens.

Global Inequalities

#8

To what extent does the government demonstrate an active and coherent commitment to promoting equal socioeconomic opportunities in developing countries?

10
 9

The government actively and coherently engages in international efforts to promote equal socioeconomic opportunities in developing countries. It frequently demonstrates initiative and responsibility, and acts as an agenda-setter.
 8
 7
 6


The government actively engages in international efforts to promote equal socioeconomic opportunities in developing countries. However, some of its measures or policies lack coherence.
 5
 4
 3


The government shows limited engagement in international efforts to promote equal socioeconomic opportunities in developing countries. Many of its measures or policies lack coherence.
 2
 1

The government does not contribute (and often undermines) efforts to promote equal socioeconomic opportunities in developing countries.
Global Social Policy
7
The Swiss government has increased its development-aid contributions since 2000. Currently Switzerland’s contributions are above average when compared to other mature democracies. The Swiss government has set the goal of spending 0.5% of its GDP on development aid in the long run and achieved that in recent years. In 2016, 0.54% of GNI was spent on development aid, excluding the costs of asylum it was 0.43%. Sustainable agriculture, decentralized governance, poverty reduction and vocational training are core issues driving Swiss development cooperation (SDC). In the countries where it supports projects or aid distribution, SDC has a good reputation for maintaining independence from home industrial interests and for making long-term commitments. Nevertheless, it is a small donor with limited impact. SDC is well embedded within international development agencies, and coordinates its activities with their agendas on issues such as poverty reduction, climate change and sustainable economic development. To a certain degree, SDC’s activities differ from general patterns of Swiss foreign policy, which is more conventional. Foreign policy is mainly trade oriented, supporting policies of market liberalization through international agencies like the WTO. In this context, development cooperation policies have become controversial. Whereas the SVP criticizes development cooperation as ineffective and calls for SDC budget cuts, the policy network of Swiss private development-aid agencies advocate a shift in policy that involves the mitigation of north-south inequalities by revising trade arrangements that disadvantage developing countries.
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