Social Protection and the Formation of Skills: A Reinterpretation of the Welfare State

Abstract

This paper outlines a new approach to the study of the welfare state. Contrary to the emphasis on "decommmodification" in the current literature, we argue that important dimensions of the welfare state-employment protection, unemployment protection, and wage protectionare designed to make workers more willing to invest in firm-and industry-specific skills that increase their dependence on particular employers and their vulnerability to market fluctuations. Workers will only make such risky investments when they have some insurance that their job or income is secure. Otherwise, they will invest in general, and therefore portable, skills. In turn, because the skill composition of the work force constrains the set of product market strategies that firms can pursue successfully, employers will support social protection that facilitates the set of skills they need to be competitive in particular international product markets. We show that our argument is consistent with observed clusters of social protection and skill profiles among OECD countries, and that these clusters are associated with very different distributional outcomes and patterns of gender-specific labor market segmentation.

Home ownership under changing labour and housing market conditions: tenure preferences and outcomes among freelancers and flex workers

“…In fact, Table 1 shows significant variations in EPL levels in the mid-1990s. The large and Soskice (2001) indicate that labour market policies in these liberal market economies (LME) are based on the liberal principle of 'employment at will', where companies can fire employees in cases where they do not function or when economic conditions demand so. The other nations in Table 1 are coordinated market economies (CME).…”

“…A third group of CMEs combine relatively high EPLs with relatively high UBs, which gives a high degree of income security to workers. The above serves as a general introduction on labour market variations and more backgrounds to these differences can be found in the varieties of capitalism literature (see Estevez-Abe et al, 2001). There has been a suggestion that the subdivision of EPL and UB levels in WestEuropean CMEs runs parallel to Esping-Andersen's welfare regimes (Sapir, 2006), but in our data we do not see a strong link.…”

A Tailor-Made Plant Closure Survey

“…In terms of the skill production regime typology developed by Estevez-Abe et al (2001), Switzerland corresponds approximately to the firm-and industry-specific type, characterized by a large proportion of workers with vocational training. The classification of Switzerland in the specific-skill regime contradicts Estevez-Abe et al (2001: 8) insofar that those authors expect the workers to only invest in firm-specific skills if employment protection is high -which is not the case in Switzerland.…”

What connects industrial relations and corporate governance? Explaining institutional complementarity

“…Corporate governance and labour relations are only two of a larger set of interacting production regime institutions. According to the literature, complementarity may require a specific organization of skill formation (Crouch et al, 1999;Marsden, 1990;Streeck, 1991), company finance (as distinguished from company monitoring), cooperation between firms in standard setting and technology transfer (Hall and Soskice, 2001), management careers (Lane, 1992), the rules of company decision-making, such as CEO power and veto points inside management, competition policy (Roe, 2001) and welfare state organization (Estevez-Abe et al, 2001;Mares, 2001). A recent discussion concerns the question of whether complementarity also exists between the institutions of production regimes and political institutions, such as the electoral system (Gourevitch and Shinn, 2005;Iversen and Soskice, 2002).…”

“…The concept of a firm-centred political economy, in which different institutions are linked by strong complementarity, has generated new insights on public policy, particularly social policy (Estevez-Abe et al, 2001;Hall and Soskice, 2001, pp. 50-4;Iversen and Soskice, 2001;Mares, 2001;Swank and Martin, 2001).…”