Comparing European Workers Part B: Policies and Institutions: Volume 22 Part 2

This is the second volume in the Research in the Sociology of Work set on “Comparing European Workers.” The first volume focused on experiences and inequalities (Brady, 2011). This volume concentrates on policies and institutions. While the first volume identified many of the problems and challenges that European workers face, this volume considers potential solutions. Of course, the social policies and labor unions of Europe are hardly panaceas for the variety of challenges that European labor markets face. Nevertheless, this volume explores how well policies and institutions can address those challenges. In the process, it appraises how the classic solutions for workers are undergoing transformations and what those transformations mean for the future of work in Europe.

Purpose – Since the mid-1980s, unemployment policy reforms in Europe and throughout the rich democracies have stressed publicly supported activation of the unemployed through both reductions in perceived disincentives to work as well as commitments for improved training, employment services, and related policies. In this chapter, I systematically explore the domestic and international political economic sources of these policy changes.

Methodology/approach – I test a set of hypotheses – original and derivative – about the domestic and international determinants of labor market policy change through pooled time-series cross-section analysis of 1980-to-2002 annual data from 18 capitalist democracies. The dependent variables consist of national spending on active labor market policy, measures of passive unemployment compensation benefits, and the ratio of active to passive unemployment program spending. Causal models account for spatial diffusion of policy reforms as well as core political and economic determinants of policy change.

Findings – I find that Left party governments and coordinated market institutions buoy resources for active labor market programs, maintain relatively generous passive unemployment supports and entitlements, and, at the same time, foster a shift to more active social policy. International trade openness promotes generous active labor market policies while more left-leaning voters and veto points within the polity significantly constrain reductions in unemployment benefits and entitlement rights. De-industrialization reinforces policy reforms toward activation while high unemployment rates engender cuts in passive unemployment benefits and eligibility conditions.

Originality/value – Overall, the chapter demonstrates that the economic effects on policy change notwithstanding, politics fundamentally matters: domestic political dynamics and variations in institutions explain the preponderance of the change (or lack thereof) in unemployment policy.

Purpose – Although many have expressed concern over whether generous welfare policies discourage the employment of single mothers, scholars have rarely exploited cross-national variation in the generosity of social policies to assess this question. This is the case even though much previous scholarship has examined the effects of social policy on women's and mothers' labor force engagement. This chapter evaluates whether generous social policies have a disincentive effect on single-mother employment.

Methodology/approach – Using the Luxembourg Income Study (LIS), we conduct a cross-national, multilevel analysis of the effects of social policy generosity on single-mother employment in 17 affluent democracies.

Findings – We find high rates of single-mother employment – above 60 percent in 15 of the 17 countries and above 70 percent in 5 countries. We find little effect of social policy for employment, as our two measures of social policy are insignificant in almost all models. If there are welfare disincentives, they only appear significant for young single mothers, and this evidence is limited as well. We find contradictory evidence for the employment incentive for low-educated single mothers.

We determine that single-mother employment is largely driven by the same individual characteristics – educational attainment, age, and household composition – that drive employment in the general population, and among women and mothers.

Originality/value of chapter – To the best of our knowledge, this is one of the few cross-national, multilevel tests of the welfare disincentive thesis for single-mother employment. We provide evidence that welfare generosity does not discourage single-mother employment.

Purpose – European social protection arrangements have undergone significant transformations since the mid-1970s. However, while the existing literature has focused on reforms in public welfare arrangements, an analysis of both public and private social protection is needed to understand the social protection status of European workers. Recent reforms have led to varying degrees of social protection dualism between insiders and outsiders. After showing the existence of dualization processes in Germany, France, and the United Kingdom, the chapter explores the structural and political sources of these processes.

Methodology/approach – We conduct a comparative historical analysis and process tracing of policy change and its drivers in three major European political economies. A combination of qualitative evidence and quantitative measurements are used.

Findings – We find that de-industrialization has contributed to unsettling the skill composition that sustained both public and private postwar social protection arrangements. This development has affected the preferences of employers, for whom cost containment has become a critical issue. Furthermore, we show that the capacity of employers to realize their preferences depends on the governance structures of social policy arrangements and on domestic political institutions.

Originality/value – The chapter suggests new perspectives on employers' preferences in Coordinated and Liberal political economies which differ from those which have informed the Varieties of Capitalism approach.

Purpose – East European ex-communist countries have now experienced nearly two decades of turbulent economic conditions and challenges resulting from the market transition. Since the early 1990s, there has been considerable decline in unionization throughout the region. This study uses information on union membership provided by four waves of the World Values Survey (WVS) to explain trends in unionization in East European ex-communist countries from 1990 to 2006.

Methodology/approach – We use random-effects and fixed-effects models to test predictions for three sets of explanations for cross-national and historical variation in unionization: industrialization, globalization, and institutions.

Findings – We find a degree of support for all three explanations of union decline. Overall, our analyses reveal the strongest support for industrialization and business cycle explanations. Inflation, unemployment, and urban population growth are all significant factors in shaping patterns of unionization in ex-communist East Europe. Our analyses show that aspects of economic and financial globalization have had significant, negative effects on unionization in the region. Manufacturing imports and foreign direct investment inflows appear to have undermined the position of domestic labor and contributed to declines in union membership.

Originality/value of the chapter – Successor and newly independent unions face the twin challenges of gaining public confidence as representatives of workers' interests, and withstanding increasing market pressures and conditions unfavorable for unionization. We provide evidence that without strong institutions to serve as buffers to external economic conditions, unionization levels in East European ex-communist countries are more open to market forces.

Purpose – The purpose of this chapter is to show how patterns of union organization vary over time and across countries in the economically advanced world, with a focus on Europe.

Methodology/approach – The data analysis uses the “Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts” dataset to report on patterns of union density in 16 economically advanced countries between 1960 and 2006 and draws on the European Social Survey to show how union membership is segmented by gender, educational attainment and economic sector in 13 European economically advanced countries during the 2000s.

Findings – The chapter demonstrates more clearly than in previous work that trends of decline in union density cut across national varieties of capitalism; on average, the trends look quite similar in Anglo-American liberal countries and the coordinated countries of Continental Europe. On the other hand, cross-national differences are still important, as evident in the fact that the Nordic countries have not experienced substantial declines.

Originality/value – Current work in political economy is marked by a dividing line between those who see change over time or cross-country differences as the primary axis of variation in contemporary capitalism. Some focus on differences between periods of embedded liberalism and neoliberalism, while others key on distinctions between liberal and coordinated national models. This chapter advocates an integrated approach that captures more fully the ways in which forms of organization in different institutional domains vary across both time and space.

Purpose – The goal of this chapter is to explore whether variation in the distribution of union members across the income distribution affects the role of unions in redistributive politics.

Design/methodology/approach – The conceptual part of the study provides a theoretical motivation for disaggregating organized labor by income. The empirical part uses European Social Survey data for 15 West European countries 2006–2008 to describe the composition of union membership by income across countries and to explore, in a preliminary fashion, the implications of where union members are located in the income distribution for social protection and redistribution.

Findings – In most countries, workers with incomes above the median are better organized than workers below the median and the income of the median union member exceeds the income of the median voter. The political implications of the overrepresentation of relatively well-off workers depend on the mechanism of preference aggregation within unions and the influence of unions in the policymaking process. While leaving a thorough examination of these issues for future research, we present descriptive regression results suggesting that the membership composition of unions by income is related to income inequality and redistribution but not social insurance.

Originality/value of paper – This is the first comparative study to map the distribution of union members across the income distribution and to examine the implications of compositional variation by income for redistributive politics.

Purpose – Ascertaining the extent to which the generalized decline in union density, as well as the erosion in centralized bargaining structures and developments in other labor institutions, have contributed to rising within-country inequality.

Methodology – Econometric analysis of a newly developed dataset combining information on industrial relations and labor law, various dimensions of globalization, and controls for demand and supply of skilled labor for 51 Advanced, Central and Eastern European, Latin American, and Asian countries from the late 1980s to the early 2000s, followed by an analysis of 16 advanced countries over a longer time frame (from the late 1970s to the early 2000s).

Findings – In contrast to previous research, which finds labor institutions to be important determinants of more egalitarian wage or income distributions, the chapter finds that trade unionism and collective bargaining are no longer significantly associated with within-country inequality, except in the Central and Eastern European countries. These findings are interpreted as the result of trade unionism operating under more stringent structural constraints than in the past, partly as a result of globalization trends. In addition, despite much talk about welfare state crisis, welfare states, historically the result of labor's power and mobilization capacity, still play an important redistributive role, at least in advanced countries.

Practical implications – Union attempts at equalizing incomes by compressing market earnings seem ineffective and impractical in the current day and age. Unions should seek to increase the workers’ skill levels and promote an egalitarian transformation of the workplace. This type of “supply-side” egalitarianism is not a new strategy for unions, but is very much embedded in the unions’ DNA.

Purpose – This concluding essay suggests how contemporary developments in cultural sociology can enrich and extend the American sociology of work. While recent studies in the sociology of work consider more fully the role of sense making and representations in workers’ lives, we propose additional possibilities for conceptual and theoretical cross-pollination. We propose questions that a cultural sociologist might ask about European workers in the age of neo-liberalism.

Methodology/approach – We examine how authors in this volume and its companion (Brady, 2011), and other students of workers approach culture-related phenomena. In particular we focus on how they use culture as explanans and explananda. Borrowing from Lamont and Small (2008) and Small, Harding, and Lamont (2010), we present a set of analytical tools that cultural sociologists use widely. We then draw from culturally focused studies of workers to illustrate how researchers have used these concepts.

Findings – Research on European workers documents important political and economic trends that affect this group, but it examines less frequently how individuals understand, experience, and respond to these changes. With tools from cultural sociology, we can explore these understudied aspects of the conditions and lives of European workers.

Originality/value of paper – To our knowledge, this is the first systematic discussion of how concepts from contemporary cultural sociology can enrich research on European workers.