Revisiting the role of business in welfare state politics: Neocorporatist versus firm-level organization and their divergent influence on employer support for social policies

Abstract

The literature identifies two forms of business organization, Neocorporatist and firm-level, and the strength of each respective type has changed over time; whereas Neocorporatism has remained steady or declined, firm-level organization has become stronger in all countries. The literature underscores the differential effects of these two forms of business organization on employer support for active labor market policies and brings new evidence to bear on the implications of the relative shift towards firm-level organization on firms’ investment in active measures. A macro-level study analyzes the differential effects of these two types of employer organization on total spending on active labor market policies in a pooled analysis of 18 countries between 1985 and 2000. A micro-level study explores the differing nature of firms’ investment in active labor market policies in a context with strong Neocorporatist organization and weak firm-level organization (Denmark) and one with strong Neocorporatist and strong firm-level organization (Germany).