In all advanced democracies, policies related to the welfare state are the largest part of public policy activity. Cross-pressured by globalization, deindustrialization, rising public debts, demographic changes, permanent austerity and the rise of 'new social risks', welfare states in post-industrial democracies have entered a new phase of consolidation and transformation since the 1980s. Against early fears, retrenchment has not been 'the only game in town'. Rather, many countries have expanded new welfare policies such as 'social investments'. This collection adds to the recent literature on the emergence of the 'social investment state' in several ways: (1) it assesses to what degree social investment policies have become established across countries and at the EU level; (2) it demonstrates that and why the politics of social investment are different from those of compensatory social policies on the micro and macro level; and (3) it points at important socio-economic effects of social investments.