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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 – In this chapter, we examine individual- and country-level differences in perceived job insecurity in the 27 European Union countries (EU27) within a multilevel framework.

Design/methodology/approach – We primarily focus on cross-national differences in perceived job insecurity in the EU27 and consider several possible explanations of it, including flexible employment practices, economic conditions, labor market structure, and political institutions. We examine both individual- and country-level determinants using multilevel partial proportional odds models based on individual-level data from the 2006 Eurobarometer 65.3 and country-level data from a variety of sources.

Findings – We find that European workers feel most insecure in countries with high unemployment, low union density, low levels of part-time and temporary employment, relatively little social spending on unemployment benefits, and in post-socialist countries.

Research limitations/implications – The findings from this study suggest that flexible employment practices do not necessarily cause workers to feel insecure in their jobs. This is likely due to the different nature of part-time and temporary employment in different institutional contexts.

Originality/value – This study is one of the most comprehensive accounts of perceived job insecurity in Europe given the focus on a larger number of countries and macro-level explanations for perceived job insecurity.

Over the last few decades, precarious work rose as an important feature of socioeconomic insecurity in contemporary Europe. The following study asks: How do labor market institutions and labor market conditions shape work precarity in Europe? This research captures the elusive concept of precarious work by measuring the degree to which a job (1) is insecure and uncertain, (2) offers poor prospects of career mobility, and (3) puts workers in an economically insecure position with low pay. Building on two theoretical paradigms, the Varieties of Capitalism and the Power Resource Theory, this study derives and tests hypotheses about how macro-level factors shape the variation in the distribution of precarious work in 32 European countries. Combining individual-level data from the 2010 European Working Conditions Survey with country-level data from multiple sources, my findings suggest that work precarity decreases in countries with high percentages of employees in all enterprises receiving continual training, high percentages of all enterprises providing on-the-job training for employees, and high levels of spending on active labor market policies.

This chapter examines the evolution of the number of days spent on sick leave following the 2011 reform which halved the maximum sick benefit provided by statutory health insurance in Hungary. This policy change sharply decreased benefits for a large group of high earners, while leaving the incentive to claim sickness benefits unchanged for lower earners, providing us with a “quasi-experimental” setup to identify the incentives effect of sickness benefits. We use a difference-in-differences type methodology to evaluate the short-term effect of the reform. We rely on high-quality administrative data and analyze a sample comprised of prime-age male employees with high earnings and stable employment. Our results show that the number of days spent on sick leave fell substantially for those experiencing the full halving of benefits. Estimating the response of the number of sick days with respect to the fall in potential sickness benefits, we find a significant elasticity of −0.45.

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.

Norway is a small nation state on the northernmost coastline of Western Europe, integrated in the Western world economy. For centuries Norway's integration in the world economy had been based on exports of raw materials such as fish and timber, as well as shipping services. In the early 20th century, furnace-based metals (made possible by cheap hydropower) were added to this export basket. Just as the world economy entered an increasingly unstable phase in 1970s, another natural resource was discovered in Norway: petroleum – that is, oil and natural gas from the North Sea. This chapter analyses the challenges and possibilities inherent in the Norwegian strategy of developing an oil economy in a world economic situation influenced by new and stronger forms of international integration through the four decades between 1970 and 2010.

Soon after the Lehman crisis, the International Monetary Fund (IMF) surprised its critics with a reconsideration of its research and advice on fiscal policy. The paper traces the influence that the Fund’s senior management and research elite has had on the recalibration of the IMF’s doctrine on fiscal policy. The findings suggest that overall there has been some selective incorporation of unorthodox ideas in the Fund’s fiscal doctrine, while the strong thesis that austerity has expansionary effects has been rejected. Indeed, the Fund’s new orthodoxy is concerned with the recessionary effects of fiscal consolidation and, more recently, endorses calls for a more progressive adjustment of the costs of fiscal sustainability. These changes notwithstanding, the IMF’s adaptive incremental transformation on fiscal policy issues falls short of a paradigm shift and is best conceived of as an important recalibration of the precrisis status quo.

The state has an important role to play in reducing inequalities and a string of legislation from the Equal Pay Act of 1970 to the Equality Act of 2010 requires all companies, institutions and associations, as well as private and public services, to ensure equal treatment in access to employment. Yet political discourse has hardly focused on gender equality until very recently. Mandatory equal pay reporting was promoted as part of the Conservative 2015 election manifesto. Moreover, during David Cameron’s speech to the Conservative Party in October 2015, the Prime Minister claimed that it was impossible to have true opportunity without equality and made explicit reference to the problem of gender inequality. This chapter will thus examine the reasons why there are still high inequalities in terms of pay and prospects for women in Britain and how the 2008 crisis has impacted on women. It will also discuss a range of new policies to tackle gender inequality and consider whether this represents a discursive shift from vague notions of fairness to a decisive commitment from central government to tackle gender inequalities head on.

What role do people's attitudes toward social policies play for the politics of welfare state reform? This chapter contributes to a growing scholarship on policy responsiveness in welfare state research with a longitudinal comparative case study of the Bismarckian welfare states of France and Germany. Quantitative analyses of changes in mean attitudes as well as polarization and inequalities of attitudes based on the 1996, 2006, and 2016 waves of the International Social Survey Program (ISSP) Role of Government module are triangulated with a thick description of social policy changes. While recommodifying and defamilializing reforms in Germany transformed the welfare state fundamentally, there was more continuity in the French welfare state, in spite of a stronger focus on labor market activation policies. The quantitative results suggest that lower attitudinal stability toward the welfare state in Germany and lower polarization evoked a higher willingness for reform than in France, where more polarized attitudes and overall marginal changes in attitudes gave French governments less maneuverability in adopting reforms. In both countries, I find no evidence for an upper-class bias in policy responsiveness. In sum, my research supports the claim that change in public opinion toward the welfare state and diverging attitudes within societies play a role for the timing and direction of reforms.