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Evaluating the Connection between Social Protection and Economic Flexibility

In: Social Protection versus Economic Flexibility: Is There a Trade-Off?

Author

Listed:
  • Rebecca M. Blank
  • Richard B. Freeman

Abstract

Over the last 10 years, a variety of analysts have blamed high unemployment and stagnant economic growth in Europe on inflexible labor markets and pointed to the US as a more flexible economy, due to its less regulated labor markets and less generous social protection programs. This paper reviews that debate, critiques the arguments about the relationship between social protection programs and labor market adjustment, and reviews the research literature on this topic. In general, we conclude that much less is known about the aggregate effects of social protection programs on the economy than is generally claimed. Within the very limited existing research, there is little evidence of a significant trade-off between social programs and labor market adjustment, although there is also not much evidence to support those who claim that social protection promotes economic growth. The paper ends by suggesting future research directions.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Rebecca M. Blank & Richard B. Freeman, 1994. "Evaluating the Connection between Social Protection and Economic Flexibility," NBER Chapters, in: Social Protection versus Economic Flexibility: Is There a Trade-Off?, pages 21-42, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:11253
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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