Taxation, Wage Bargaining, and Unemployment [Paperback]

This book explains cross-national and temporal changes in employment outcomes.In an effort to explain cross-national and temporal changes in employment outcomes, this book examines a political exchange between unions and governments, during which unions voluntarily agreed to pursue moderate wage settlements, while governments responded with an expansion of social policy transfers. The book shows how the growth in the tax burden necessary to finance existing social policy commitments has undermined the effectiveness of this political exchange and its ability to restore high levels of employment.In an effort to explain cross-national and temporal changes in employment outcomes, this book examines a political exchange between unions and governments, during which unions voluntarily agreed to pursue moderate wage settlements, while governments responded with an expansion of social policy transfers. The book shows how the growth in the tax burden necessary to finance existing social policy commitments has undermined the effectiveness of this political exchange and its ability to restore high levels of employment.Why were European economies able to pursue the simultaneous commitment to full employment and welfare state expansion during the first decades of the postwar period? This book highlights the critical importance of a political exchange between unions and governments, premised on wage moderation in exchange for the expansion of social services and transfers. The strategies pursued by these actors in these political exchanges are influenced by existing wage bargaining institutions, the character of monetary policy and by the level and composition of social policy transfers.Introduction: does the welfare state hurt unemployment; 1. The economic and political consequences of welfare state maturation; 2. A quantitative analysis; 3. Sweden; 4. Germany; 5. Britain; Conclusion: new social pacts in contemporary Europe. There is no doubt at all that this book will change thel“f