European Social Models From Crisis to Crisis

The basic issues contested in public controversy over European social models have concerned their effects on employment and inequality, and ultimately whether there is necessarily a trade-off between higher employment and lower inequality.

Understanding social models as the constellation of welfare state, employment relations, and educational institutions that jointly structure the supply side of the labor market, this book revisits those issues. It considers them in the light of the tumultuous developments shaping the demand-side environment in which the social models have evolved over the past quarter century.

These extend from the deep Europe-wide recession precipitated by the end of Germany’s post-unification boom to the Great Recession triggered by the late 2000s financial meltdown, with the establishment of EMU in between. Case studies of 11 West European countries, in and out of EMU and EU and varying in their social models, economic structures, and size, comprise the empirical core of the book.

Drawing on them and other research, the book argues that whether higher employment can be combined with lower inequality depends not only on how social models counteract markets’ tendency to generate inequality, but also on how effectively the institutions of economic governance assures the macroeconomic conditions for employment and the resources for egalitarian social and educational policy by counteracting markets’ tendency to generate macroeconomic instability.

Given the massive failure to do so by Europe’s economic governance institutions, particularly those of the Eurozone, the book concludes that its socially destructive effects vastly outweigh whatever effects the diverse social models have had in aggravating or ameliorating the impact of the crisis.