Taxation, Wage Bargaining, and Unemployment

by Isabela Mares

• ISBN13: 9780521857420
• ISBN10: 0521857422
• Format: Hardcover
• Copyright: 2006-02-13
• Publisher: Cambridge University Press

Summary

Why were European economies able to pursue the simultaneous commitment to full employment and welfare state expansion during the first decades of the postwar period? This book highlights the critical importance of a political exchange between unions and governments, premised on wage moderation in exchange for the expansion of social services and transfers. The strategies pursued by these actors in these political exchanges are influenced by existing wage bargaining institutions, the character of monetary policy and by the level and composition of social policy transfers.

Author Biography

Isabela Mares is Assistant Professor of Political Science at Stanford University

Table of Contents

List of Figures and Tables	xii
List of Abbreviations	xv
Acknowledgments	xvii
INTRODUCTION: DOES THE WELFARE STATE HURT EMPLOYMENT?	1	(16)
Developments in European Labor Markets: Two Theoretical Perspectives	3	(7)
The Argument	10	(5)
The Organization of the Study	15	(2)
1 THE ECONOMIC AND POLITICAL CONSEQUENCES OF WELFARE STATE MATURATION	17	(44)
Labor Market Institutions and Economic Performance	19	(8)
Labor Market Institutions and Monetary Policy	27	(8)
A Theoretical Synthesis: Labor Market Institutions, Monetary Policies, and the Welfare State	35	(12)
Looking Ahead	47	(3)
Appendix	50	(11)
1. Equilibrium Prices and Consumption	50	(2)
2. Derivation of Trade Unions' Optimal Wage Demands	52	(4)
3. Proofs of Comparative Statics Results	56	(2)
4. Centralization of the Wage Bargaining System: A Comparison with the Calmfors-Driffill Approach	58	(3)
2 A QUANTITATIVE ANALYSIS	61	(22)
Testing the Model: Measurement of the Central Explanatory Variables	62	(9)
The Dependent Variable: The Employment Performance of OECD Economies	71	(10)
Conclusions	81	(2)
3 SWEDEN	83	(45)
Policy Developments in the Immediate Postwar Years	84	(3)
The Rehn-Meidner Model	87	(7)
Wage and Social Policy Developments of the 1960's	94	(6)
Strains on the System: Interunion Rivalry, 1970-1976	100	(4)
Policy Developments Under Conservative Governments, 1976-1982	104	(4)
The Return of the Social Democrats, 1982-1990	108	(7)
The Double Sacrifice: Wage and Social Policy Developments of the 1990's	115	(11)
Conclusion	126	(2)
4 GERMANY	128	(46)
The Wage–Social Policy Nexus During the Adenauer-Erhard Period, 1950-1966	129	(13)
Wage Bargaining and Social Policy Developments Under the Grand Coalition, 1966-1969	142	(4)
Wage Bargaining and Social Policy Expansion in the Brandt Era, 1969-1974	146	(5)
Wage Bargaining and Social Policy Developments Under the Social-Liberal Coalition, 1974-1982	151	(9)
The Consequences of Welfare State Maturation: Wage and Social Policy Developments, 1982-1990	160	(7)
The Aftermath of German Reunification, 1990-1997	167	(5)
Conclusions	172	(2)
5 BRITAIN	174	(45)
Wage Developments of the Postwar Years, 1945-1950	175	(4)
Social Policy and Wage Moderation Under the Conservatives, 1951-1964	179	(9)
The Labor Government, 1964-1970	188	(6)
Conservatives Again, 1970-1974	194	(5)
The Social Contract, 1974-1979	199	(7)
The Conservative Attack on the Social Wage, 1980-1996	206	(7)
Welfare State and Labor Market Reforms Under New Labour	213	(4)
Conclusion	217	(2)
CONCLUSION: NEW SOCIAL PACTS IN CONTEMPORARY EUROPE	219	(12)
The Theoretical Argument	220	(3)
Implications for the Politics of New Social Pacts	223	(8)
References	231	(22)
Index	253