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The interaction of labor market regulation and labor market policies in welfare state reform

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  • Eichhorst, Werner

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

  • Konle-Seidl, Regina

    ()
    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

Abstract

"Employment protection legislation, unemployment benefits and active labor market policy are Janus-faced institutions. On the one hand they are devices of insurance against labor market risk that provide income and employment security. On the other hand they influence the capacities of labor markets to adapt to changing economic conditions since institutional features of the welfare state also affect actors' economic adaptation strategies. Insufficient labor market adaptability results in higher and more persistent unemployment. Hence, in order to increase the adaptability of European labor markets, reforms had to address these closely interacting policy areas. The first aim of the paper is to describe recent reforms of employment protection, unemployment insurance and active labor market policies in different European welfare states (Denmark, Sweden, the United Kingdom, Switzerland, the Netherlands, Spain and Germany). The paper shows whether and to what extent national policy patterns converge in the direction of a new balance of flexibility and security with employment protection being eased and labor market policies being 'activated' through a combination of 'carrots and sticks'. Secondly, in terms of the political economy of welfare state reforms, the paper will answer the question whether consistent reforms of the three institutions are more likely in political systems characterized by relative strong government and/or social partnership since such institutional prerequisites may favor 'package deals' across policy areas." (Author's abstract, IAB-Doku) ((en))

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Bibliographic Info

Paper provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its series IAB Discussion Paper with number 200519.

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Length: 50 pages
Date of creation: 07 Sep 2005
Date of revision:
Handle: RePEc:iab:iabdpa:200519

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Keywords: aktivierende Arbeitsmarktpolitik; Sozialpolitik - Reform; Sozialstaat - internationaler Vergleich; Arbeitsschutzpolitik; Beschäftigungssicherung; Arbeitslosenunterstützung; Sozialstaat; Regulierung; institutionelle Faktoren; politisches System; politischer Wandel; Dänemark; Schweden; Großbritannien; Schweiz; Niederlande; Spanien; Bundesrepublik Deutschland;

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References

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  1. Dolado, Juan J. & Garcia-Serrano, Carlos & Jimeno, Juan Francisco, 2001. "Drawing Lessons From the Boom of Temporary Jobs in Spain," CEPR Discussion Papers 2884, C.E.P.R. Discussion Papers.
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  3. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages C1-33, March.
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  6. Kugler, Adriana & Jimeno, Juan F. & Hernanz, Virginia, 2002. "Employment Consequences of Restrictive Permanent Contracts: Evidence from Spanish Labor Market Reforms," IZA Discussion Papers 657, Institute for the Study of Labor (IZA).
  7. Saint-Paul, Gilles, 2004. "Why Are European Countries Diverging in Their Unemployment Experience?," IZA Discussion Papers 1066, Institute for the Study of Labor (IZA).
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  9. Olympia Bover & Pilar García-Perea & Pedro Portugal, 2000. "Labour market outliers: Lessons from Portugal and Spain," Economic Policy, CEPR & CES & MSH, vol. 15(31), pages 379-428, October.
  10. David Coe & Dennis Snower, 1996. "Policy Complementarities: The Case for Fundamental Labor Market Reform," Archive Discussion Papers 9625, Birkbeck, Department of Economics, Mathematics & Statistics.
  11. Gerfin, Michael & Lechner, Michael, 2001. "A Microeconometric Evaluation of Active Labour Market Policy in Switzerland," CEPR Discussion Papers 2993, C.E.P.R. Discussion Papers.
  12. Madsen, P.K., 2006. "Labour Market Flexibility and Social Protection in European Welfare States - Contrasts and Similarities," Australian Bulletin of Labour, National Institute of Labour Studies, vol. 32(2), pages 139-162.
  13. Anke Hassel, 2003. "The Politics of Social Pacts," British Journal of Industrial Relations, London School of Economics, vol. 41(4), pages 707-726, December.
  14. Gilles Saint Paul, 1999. "The political economy of employment protection," Economics Working Papers 355, Department of Economics and Business, Universitat Pompeu Fabra.
  15. Ebbinghaus, Bernhard & Hassel, Anke, 1999. "Striking deals: Concertation in the reform of continental European welfare states," MPIfG Discussion Paper 99/3, Max Planck Institute for the Study of Societies.
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  17. Martin, John P. & Grubb, David, 2001. "What works and for whom: a review of OECD countries' experiences with active labour market policies," Working Paper Series 2001:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  18. James J. Heckman, 2002. "Flexibility and Job Creation: Lessons for Germany," NBER Working Papers 9194, National Bureau of Economic Research, Inc.
  19. Gangl, Markus, 2002. "Unemployment benefits as a search subsidy: new evidence on duration and wage effects of unemployment insurance," Discussion Papers, Research Unit: Labor Market Policy and Employment FS I 02-208, Social Science Research Center Berlin (WZB).
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