Labour market policies

Abstract

The crisis of the Fordist model has generated unprecedented challenges for labour market policies of Western countries. The decline of employment in manufacturing was only partially offset by the growth of the service sector and unemployment has once again become a structural problem in many advanced economies. In addressing such issues, labour market policies in many countries have focused their interventions on reducing labour costs, introducing greater flexibility in working time and in the duration of contracts. Starting from this premise, the chapter identifies an ideal-typical modelling of the different trajectories of change in labour policies, rooted in specific institutional logics followed by different countries: in the 1980s and 1990s Germany and France adopted similar measures to southern European countries such as Italy and Spain, intervening on passive labour market policies and dismissal procedures, with measures to reduce labour supply through early-retirement and flexible working time. Denmark and Sweden developed income support measures and active labour policies, in particular through training programs aimed at enhancing the employability of low-skilled workers and women with children. The United States and the United Kingdom adopted labour market policies based on the de-regulation of employment protection legislation, a reduction of unemployment benefits strengthening means-tested programs not compensated by investments in active policies. The picture that emerges highlights a process of further differentiation starting from the 2000s