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Is the American Model Miss World? Choosing between the Anglo-Saxon Model and a European-Style Alternative

Author

Listed:
  • H.L.F. de Groot
  • R. Nahuis
  • P.J.G. 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.

Suggested Citation

  • H.L.F. de Groot & R. Nahuis & P.J.G. Tang, 2004. "Is the American Model Miss World? Choosing between the Anglo-Saxon Model and a European-Style Alternative," Working Papers 04-26, Utrecht School of Economics.
  • Handle: RePEc:use:tkiwps:0426
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    File URL: https://dspace.library.uu.nl/bitstream/handle/1874/7363/04-26.pdf
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    References listed on IDEAS

    as
    1. Belot, Michele & van Ours, Jan C., 2001. "Unemployment and Labor Market Institutions: An Empirical Analysis," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 403-418, December.
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    Citations

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    Cited by:

    1. Jeroen van den Bergh & Miklós Antal, 2014. "Evaluating Alternatives to GDP as Measures of Social Welfare/Progress," WWWforEurope Working Papers series 56, WWWforEurope.
    2. Stefan P.T. Groot & Henri L.F. Groot & Martijn J. Smit, 2014. "Regional Wage Differences In The Netherlands: Micro Evidence On Agglomeration Externalities," Journal of Regional Science, Wiley Blackwell, vol. 54(3), pages 503-523, June.
    3. Catherine Mathieu & Henri Sterdyniak, 2008. "European social model(s) and social Europe," Documents de Travail de l'OFCE 2008-10, Observatoire Francais des Conjonctures Economiques (OFCE).
    4. Wim Suyker & Henri de Groot & P. Buitelaar, 2007. "India and the Dutch economy; stylised facts and prospects," CPB Document 155, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Kaitila, Ville, 2006. "Productivity, Hours Worked, and Tax/Benefit Systems in Europe and Beyond," Discussion Papers 1015, The Research Institute of the Finnish Economy.
    6. Catherine Mathieu & Henri Sterdyniak & Thomas Seguin, 2007. "Annex 6 : What future for Social Europe ?," Sciences Po publications info:hdl:2441/5082, Sciences Po.
    7. Ruud de Mooij, 2004. "Towards efficient unemployment insurance in the Netherlands," CPB Memorandum 100, CPB Netherlands Bureau for Economic Policy Analysis.
    8. repec:spo:wpecon:info:hdl:2441/6157 is not listed on IDEAS
    9. repec:spo:wpecon:info:hdl:2441/5082 is not listed on IDEAS

    More about this item

    Keywords

    welfare states; income inequality; unemployment; productivity; participation; labour market policies;

    JEL classification:

    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

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