Measuring social impact in the EU
Date: 31st May 2017
Category: Social security and childcare
The European Parliament have published a briefing paper on measuring social impact in the EU as a result of austerity measures which have triggered a shift in the focus of EU policy-makers towards deepening the economic union and achieving greater social convergence across Member States.
In addition, due to growing inequalities and changing labour markets, discussions on investing in human capital have also come to the fore. In this context, it has become all the more important to understand and assess the social impact of policies and investments. Moreover, both public and private investors want to gain a better understanding of the social outcomes that are achieved by their investments.
There is no clear consensual definition of the concept of social impact: while the social sciences look at the impact of policies and programmes, often in terms of social progress, social investors tend to look for the non-financial (that is, social and environmental) returns on their investments, which they tend to quantify and/or express in monetary terms, if possible. Metrics and methodologies to carry out the measurement of social impact are numerous but incoherent. The European Commission and European Parliament have their own mechanisms for impact assessment, in which they also assess social impact.
In addition, several initiatives aim at measuring the social dimension of growth beyond GDP, arguing that GDP in itself does not hold enough information on social progress. The third sector has developed several methodologies to measure social impact as well, due to its interest in investing in social causes. Unlike outputs, it is often difficult to quantify outcomes and impacts. Moreover, it is debated whether quantification, no matter how comprehensive it is, can express the intricate nature of the issues at hand.
Finally, developing a coherent framework that would help to effectively link strategic thinking with policy-making and policy implementation, including investment, remains a policy challenge.