(I also don’t accept the implied assumption that unemployment in France and similar European countries is involuntary – these are all countries with high replacement ratios and generous unemployment benefit terms).

So, the straightforward recommendation would be to cut back on benefits, right? This of course is the standard right wing line on unemployment…

It’s not simply a question of more or less liberalisation. It’s how you liberalise, how you regulate, how you tax, and how you protect. This is the crucial point in considering different welfare models. The Scandinavian countries, for instance, have notoriously high taxes and welfare levels. At the same time they have relatively well-functioning labour markets that on some dimensions are quite free-market based.

In particular, it’s easy to fire people (particularly in Denmark), and there are strict requirements on unemployed that they seek and take available jobs.

Regarding the EU as a single market: Well, yes, but by no means a single labour market. There are all sorts of local particularities and oddities.

To put that another way, some EU economies with high tax burdens are notably more successful than others. We need to take account of that and attempt to ascertain why.

Stostosto, sure people categorised economic systems before Amable. However, that particular classification (Nordic…) is due to him (or so I believe, I could be wrong of course).

I have sometimes seen Gøsta Esping-Andersen credited with a seminal attempt at categorising welfare states, in 1990.

You have to wonder whether, even if 22 is true, if they go into higher value-added jobs in the end it’s not a blessing in disguise.

http://www.cepr.net/index.php?option=com_content&task=view&id=66&Itemid=8

It doesn’t suit Alesina & Giavazzi (and others) to notice but the EU is a single market, largely operating with one currency. Much is made of limited remaining barriers, but essentially the trend for two decades or more has been for major market liberalisation. It hasn’t delivered noticeably better performance, indeed actual gains have typically been below predicted. And so the mantra continues that more liberalisation must be needed, it must all be down to remaining barriers to economic activity. Alternative explanations for European economic performance are ruled out by assumption at the start.

Please post the links.

I cited the Sapir paper because it is readily accessible and was circulated to ECOFIN ministers in 2005 during the UK’s presidency of the EU.

One important insight is that there isn’t a uniform European alternative to the Anglo-Saxon model. Try this influential paper on: Globalisation and the reform of the European social models, prepared by André Sapir for the think-tank Bruegel, and presented at the ECOFIN Informal Meeting in Manchester in September 2005.

It argued that there is not one European social model, but rather four – the Nordic, Anglo-Saxon, Mediterranean and the Continental:

• The Nordic model (welfare state, high level of social protection, high level of taxation, extensive intervention in the labour market, mostly in the form of job-seeking incentives)
• The Anglo-Saxon system (more limited collective provision of social protection merely to cushion the impact of events that would lead to poverty)
• The continental model (provision of social assistance through public insurance-based systems; limited role of the market in the provision of social assistance)
• The Mediterranean social welfare system (high legal employment protection; lower levels of unemployment benefits; spending concentrated on pensions)

http://www.euractiv.com/Article?tcmuri=tcm:29-146338-16&type=News

Andre Sapir’s paper on: Globalisation and the Reform of European Social Models (November 2005), is here:
http://www.bruegel.org/Public/fileDownload.php?target=/Files/media/PDF/Publications/Policy%20Briefs/PB200501_SocialModels.pdf

On the reasons for the UK’s relatively low productivity performance compared with other major European economies, this is one of the main conclusions in a research project at the LSE :

“The persistent productivity gap between the UK and the two big continental European economies can mainly be ‘explained’ by the fact that they have more capital invested per worker and their workers are more skilled.”
http://www.lse.ac.uk/collections/pressAndInformationOffice/newsAndEvents/archives/2004/UKs_ProductivityGap.htm

Also ontopic is the good old French youth unemployment fallacy. The main reason why young people in France have a very high unemployment rate is that they have a very low labour force participation rate, because they have a very high rate of participation in full-time education. (I also don’t accept the implied assumption that unemployment in France and similar European countries is involuntary – these are all countries with high replacement ratios and generous unemployment benefit terms).

EADS.

Cranky Observer

Yes, it is a real company that produces real (and often quite good) products. But it is a public sector entity nonetheless, and it is not managed according to pure competitive principles (or even pure business principles)