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Whatever Happened to the Bismarckian Welfare State? From Labor Shedding to Employment-Friendly Reforms

Author

Listed:
  • Hemerijck, Anton

    () (WRR Netherlands Scientific Council for Government Policy)

  • Eichhorst, Werner

    () (IZA)

Abstract

The paper challenges the widespread view that Bismarckian countries with a strong role of social insurance and labor market regulation are less successful than other employment regimes and hard to reforms. This has been true about a decade ago. But both the institutional set-up and the performance of BIsmarckian countries have changed fundamentally over the last years. The paper summarizes major reform dynamics in Bismarckian welfare states which had adopted a strategy of labor shedding in the 1970s and 1980s to combat open unemployment. As this was associated with an increasing burden of non-wage labor costs, this triggered a sequence of more employment-oriented and more fundamental reforms that eventually helped overcome a low employment situation. The paper pursues the trajectory of reforms, shows the structural change in labor market performance and points out the achievements of past reforms, but also emphasizes the need for further action in terms of education and training, activation and employment opportunities for all working age people in these countries so that flexibility and security can be reconciled.

Suggested Citation

  • Hemerijck, Anton & Eichhorst, Werner, 2009. "Whatever Happened to the Bismarckian Welfare State? From Labor Shedding to Employment-Friendly Reforms," IZA Discussion Papers 4085, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4085
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    References listed on IDEAS

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    1. Eichhorst, Werner & Hemerijck, Anton, 2008. "Welfare and Employment: A European Dilemma?," IZA Discussion Papers 3870, Institute for the Study of Labor (IZA).
    2. Ferrera, Maurizio, 2005. "The Boundaries of Welfare: European Integration and the New Spatial Politics of Social Protection," OUP Catalogue, Oxford University Press, number 9780199284672.
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    Cited by:

    1. Christine Mayrhuber & Silvia Rocha-Akis & Christine Zulehner, 2014. "Distribution Effects to be Expected in Austria if the Tax Regime for Low Incomes from Work is Alleviated. Results of a Microsimulation," WIFO Monatsberichte (monthly reports), WIFO, vol. 87(11), pages 767-781, November.
    2. Thomas Leoni, 2015. "Welfare state adjustment to new social risks in the post-crisis scenario. A review with focus on the social investment perspective," WWWforEurope Working Papers series 89, WWWforEurope.
    3. Werner Eichhorst, 2015. "The Unexpected Appearance of a New German Model," British Journal of Industrial Relations, London School of Economics, vol. 53(1), pages 49-69, March.
    4. Giuliano Bonoli & Eric Crettaz, 2010. "Worlds of Working Poverty. Cross-national variation in the mechanisms that lead to poverty among workers," LIS Working papers 539, LIS Cross-National Data Center in Luxembourg.
    5. Ágota Scharle & Balázs Váradi & Flóra Samu, 2015. "Policy convergence across welfare regimes: the case of disability policies," WWWforEurope Working Papers series 76, WWWforEurope.

    More about this item

    Keywords

    social insurance; employment; Bismarckian welfare states; labor market policies; social policy;

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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