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An Incomes Policy for the Professions: the Dutch Experience

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  • v an der Hoek, M.

Abstract

In 1951 the United States began moving toward an incomes policy, an attempt to end postwar wage and price inflation by linking changes in these prices to gains in productivity. Other countries later followed suit; some countries had already adopted wage and price control policies. The Netherlands moved toward an incomes policy immediately after World War II. Initially, the Dutch program involved wages only, but in the 1970s it became an accepted principle that private professional income should be comparable with the salaries of government officials and civil servants with comparable training and responsibilities. In the Netherlands (as in the United States and, before medicine was socialized, the United Kingdom) health professionals operate on a fee-for-service basis and their incomes escalated as a result of both inflation and monopoly power. So they were subjected to the incomes policy. The policy's effectiveness in curbing income escalation cannot be determined with certainty—reliable data are lacking. However, the evidence indicates that the policy failed to achieve its original purpose.

Suggested Citation

  • v an der Hoek, M., 1988. "An Incomes Policy for the Professions: the Dutch Experience," MPRA Paper 6120, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:6120
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    File URL: https://mpra.ub.uni-muenchen.de/6120/1/MPRA_paper_6120.pdf
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    Cited by:

    1. van der Hoek, M. Peter, 1999. "Income Distribution Policy In The Netherlands: A Paradigm Shift," MPRA Paper 5884, University Library of Munich, Germany.

    More about this item

    Keywords

    Incomes policy; Netherlands;

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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