The Liberal-Corporatist Road to High Employment and Low Inequality? Policy Change and Employment Performance in the Dutch and Swiss Social Models

Abstract:     
In this chapter we analyse patterns of policy change and employment performance in the social models of the Netherlands and Switzerland. We outline how these countries have been able to reconcile high employment levels, a lean welfare state and moderate levels of income inequality, three policy objectives that have been considered irreconcilable in standard accounts of employment performance in advanced political economies. In both countries, income equality is mainly achieved within the market rather than by the state through redistribution. High degrees of redistribution as pursued in Nordic countries have not been a viable option given the weakness of organised labour in both countries. Low levels of market inequality are underpinned by high employment rates, thereby reducing the share of households without income, rather than by redistribution. High employment, in turn, is underpinned by continuous wage moderation and the existence of a series of entry routes inside the labour market for specific groups often marginalised in Bismarckian welfare models, like young workers and women. Part-time employment and vocational training have played a substantial role here. Finally, wage moderation and the development of market-driven policies are underpinned by the rather subordinate position of labour, yet embedded in a consensual political culture that fosters cooperation rather tan conflict both in industrial relations and in public policymaking.

Number of Pages in PDF File: 28

Keywords: Employment, Unemployment, Inequality, Switzerland, Netherlands

JEL Classification: E24, P52, J38, H55, D63

working papers series