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Is the American model Miss World? Choosing between the Anglo-Saxon model and a European-style alternative

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  • Henri de Groot

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  • Richard Nahuis
  • Paul Tang

Abstract

In Lisbon, the European Union has set itself the goal to become the most competitive economy in the world in 2010 without harming social cohesion and the environment. The motivation for introducing this target is the substantially higher GDP per capita of US citizens. The difference in income is mainly a difference in the number of hours worked per employee. In terms of productivity per hour and employment per inhabitant, several European countries score equally well or even better than the United States, while at the same time they outperform the United States with a more equal distribution of income. The European social models are at least as interesting as the US model that is often considered a role model. In an empirical analysis for OECD countries, we aim to unravel 'the secret of success'. Our regression results show that income redistribution (through a social security system) does not necessarily lead to lower participation and higher unemployment, provided that countries supplement it with active labour market policies. Especially, spending on employment services like job-search assistance and vocational guidance, seems effective. Furthermore, the results suggest that generous unemployment benefits of short duration contribute to employment without widening the income distribution.

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Bibliographic Info

Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 40.

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Date of creation: Oct 2004
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Handle: RePEc:cpb:discus:40

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Cited by:
  1. Stefan Groot & Henri de Groot & Martijn Smit, 2011. "Regional wage differences in the Netherlands: Micro-evidence on agglomeration externalities," CPB Discussion Paper, CPB Netherlands Bureau for Economic Policy Analysis 184, CPB Netherlands Bureau for Economic Policy Analysis.
  2. Ruud de Mooij, 2004. "Towards efficient unemployment insurance in the Netherlands," CPB Memorandum, CPB Netherlands Bureau for Economic Policy Analysis 100, CPB Netherlands Bureau for Economic Policy Analysis.
  3. repec:spo:wpecon:info:hdl:2441/6157 is not listed on IDEAS
  4. Catherine Mathieu & Henri Sterdyniak, 2008. "European social model(s) and social Europe," Sciences Po publications 2008-10, Sciences Po.
  5. Jeroen van den Bergh & Miklós Antal, 2014. "Evaluating Alternatives to GDP as Measures of Social Welfare/Progress," WWWforEurope Working Papers series, WWWforEurope 56, WWWforEurope.
  6. Wim Suyker & Henri de Groot & P. Buitelaar, 2007. "India and the Dutch economy; stylised facts and prospects," CPB Document, CPB Netherlands Bureau for Economic Policy Analysis 155, CPB Netherlands Bureau for Economic Policy Analysis.
  7. Kaitila, Ville, 2006. "Productivity, Hours Worked, and Tax/Benefit Systems in Europe and Beyond," Discussion Papers, The Research Institute of the Finnish Economy 1015, The Research Institute of the Finnish Economy.
  8. Thomas Seguin & Catherine Mathieu & Henri Sterdyniak, 2007. "Annex 6 : What future for Social Europe ?," Sciences Po publications info:hdl:2441/5082, Sciences Po.
  9. repec:spo:wpecon:info:hdl:2441/5082 is not listed on IDEAS

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