Social democracy and active labour-market policies: Insiders, outsiders and the politics of employment promotion

British Journal of Political Science

Volumn 36, Issue 3, 2006, Pages 385-406

  Rueda, David ^a  

^a MERTON COLLEGE   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 33646892202     PISSN: 00071234     EISSN: 14692112     Source Type: Journal    
DOI: 10.1017/S0007123406000214     Document Type: Article

References (89)

1. Karl Ove Moene and Michael Wallerstein, 'Social Democratic Labor Market Institutions', in Herbert Kitschelt, Peter Lange, Gary Marks and John Stephens, eds, Continuity and Change in Contemporary Capitalism (New York: Cambridge University Press, 1999), pp. 231-60, at p. 231.
2. See Jonas Pontusson, 'Explaining the Decline of European Social Democracy', World Politics, 47 (1995), 495-533;
3. Herbert Kitschelt, The Transformation of European Social Democracy (New York: Cambridge University Press, 1994);
4. and Frances Fox Piven, 'The Decline of Labor Parties', in Frances Fox Piven, ed., Labor Parties in Postindustrial Societies (New York: Oxford University Press, 1992), pp. 1-19.
5. See Geoffrey Garrett and Peter Lange, 'Political Responses to Interdependence', International Organization, 45 (1991), 539-64;
6. and Carles Boix, Political Parties, Growth and Equality (New York: Cambridge University Press, 1998).
7. Unlike the abundant literature on demand management or the welfare state, the politics that determine ALMPs have not received enough attention. Notable exceptions are David Rueda, 'Insider-Outsider Politics in Industrialized Democracies', American Political Science Review, 99 (2005), 61-74;
8. Cathie Jo Martin and Duane Swank, 'Does the Organization of Capital Matter?' American Political Science Review, 98 (2004), 593-611;
9. Duane Swank and Cathie Jo Martin, 'Employers and the Welfare State', Comparative Political Studies, 34 (2000), 889-923;
10. Boix, Political Parties, Growth and Equality;
11. Garrett and Lange, 'Political Responses to Interdependence';
12. Thomas Janoski, 'Direct State Intervention in the Labor Market', in Thomas Janoski and Alexander Hicks, eds, The Comparative Political Economy of the Welfare State (New York: Cambridge University Press 1994), pp. 54-92;
13. and Thomas Janoski, The Political Economy of Unemployment (Berkeley: University of California, 1990).
14. See, for example, William Keech, Economic Politics (New York: Cambridge University Press, 1995), p. 70.
15. See, for example, Douglas Hibbs, 'Political Parties and Macroeconomic Theory', American Political Science Review, 71 (1977), 1467-87;
16. James Alt, 'Political Parties, World Demand, and Unemployment', American Political Science Review, 79 (1985), 1016-40;
17. and Garrett and Lange, 'Political Responses to Interdependence'.
18. Boix, Political Parties, Growth and Equality;
19. and Swank and Martin, 'Employers and the Welfare State'.
20. Hibbs, 'Political Parties and Macroeconomic Theory';
21. and Alt, 'Political Parties, World Demand, and Unemployment' are the most cited examples.
22. For an extension of this argument to other policies, see Rueda, 'Insider-Outsider Politics in Industrialized Democracies'.
23. See, for example, Gregory Luebbert, Comparative Democracy (New York: Columbia University Press, 1986);
24. and Kaare Strøm, 'A Behavioral Theory of Competitive Political Parties', American Journal of Political Science, 34 (1990), 565-98.
25. See G. Bingham Powell, Contemporary Democracies (Cambridge: Harvard University Press, 1982).
26. Russell Dalton, Citizen Politics (New York: Chatham House Publishers, 2002), p. 195.
27. There are two analytical frameworks that inspire the model that I propose. There is first the work on dual labour markets by authors like Peter Doeringer and Michael Piore, Internal Labor Markets and Manpower Analysis (Lexington, Mass.: Heath, 1971),
28. and Suzanne Berger and Michael Piore, Dualism and Discontinuity in Industrial Societies (New York: Cambridge University Press, 1980).
29. Then there is an economic insider-outsider approach that emphasizes the differences between the employed and the unemployed (see, for example, Olivier Blanchard and Lawrence Summers, 'Hysteresis and the European Unemployment Problem', in S. Fisher, ed., NBER Macroeconomic Annual (Cambridge, Mass.: MIT Press, 1986), pp. 15-78;
30. Assar Lindbeck and Dennis Snower, The Insider - Outsider Theory of Employment and Unemployment (Cambridge, Mass.: MIT Press, 1988);
31. and Gilles Saint-Paul, 'Exploring the Political Economy of Labour Market Institutions', Economic Policy, 23 (1996), 264-315.
32. For a brief reference to insider-outsider differences regarding social democracy, see Desmond King and Mark Wickham-Jones, 'Social Democracy and Rational Choice Marxism', in Terrell Carver and Paul Thomas, eds, Rational Choice Marxism (University Park: Penn State University Press, 1995), pp. 200-30.
33. The following observations about the effects of ALMPs follow Gilles Saint-Paul, 'A Framework for Analysing the Political Support for Active Labor Market Policy', Journal of Public Economics, 67 (1998), 151-65;
34. and Lars Calmfors, 'Active Labour Market Policy and Unemployment: A Framework for the Analysis of Crucial Design Features' (Paris: OECD Working Papers, 1994).
35. Distinguishing between insiders and outsiders is only necessary when these two groups have opposing preferences. In some policy areas, this will not be the case. See Rueda, 'Insider-Outsider Politics in Industrialized Democracies', p. 2.
36. Calmfors, 'Active Labour Market Policy and Unemployment', p. 69.
37. It is generally recognized that the unemployed and precariously employed are generally neither unionized nor electorally organized (see, for example, Gøsta Esping-Andersen, 'Politics Without Class: Postindustrial Cleavages in Europe and America', in Kitschelt et al., eds, Continuity and Change in Contemporary Capitalism, pp. 293-316.
38. See Desmond King, Actively Seeking Work? (Chicago: The University of Chicago Press, 1995);
39. Desmond King, 'Employers, Training Policy, and the Tenacity of Voluntarism in Britain', Twentieth Century British History, 8 (1997), 383-411;
40. and Desmond King and Mark Wickham-Jones, 'Training Without the State?' Policy and Politics, 26 (1998), 439-55.
41. Derek Bosworth and Robert Wilson, 'The Labour Market', in Peter Maunder, ed., The British Economy in the 1970s (London: Heinemann Educational Books: 1980),pp. 86-115,at pp. 97-8. The number of people entitled to redundancy, however, was small. Workers younger than 18 years of age and those who had been in the job for less than two years were automatically excluded.
42. Jelle Visser and Joris Van Ruysseveldt, 'From Pluralism to ... Where? Industrial Relations in Great Britain', in Joris Van Ruysseveldt and Jelle Visser, eds, Industrial Relations in Europe (Thousand Oaks, Calif: Sage, 1996), pp. 42-81.
43. Brian Weekes, John Lloyd, Linda Dickens and Michael Mellish, Industrial Relations and the Limits of Law (Oxford: Blackwell, 1975).
44. Eric Smith, 'Collective Bargaining', in Maunder, ed., The British Economy in the 1970s, pp. 116-40.
45. Conservative Party, Conservative Manifesto (London: Conservative Party, 1979).
46. Paul Edwards et al., 'Great Britain: Still Muddling Through', in Anthony Ferner and Richard Hyman, eds, Industrial Relations in the New Europe (Cambridge, Mass.: Blackwell, 1992), pp. 1-68, at p. 13.
47. Major also implemented some measures that (although they did not fundamentally modify previous policies) slowed down the pace of anti-insider and anti-union measures.
48. King, 'Actively Seeking Work? pp. xii-xiii. King uses this description for both Britain and the United States.
49. King, 'Employers, Training Policy, and the Tenacity of Voluntarism in Britain', pp. 404-5.
50. Desmond King, 'Employers, Training Policy, and the Tenacity of Voluntarism in Britain'.
51. Colin Crouch, 'Organized Interests as Resources or as Constraint', in Colin Crouch and Franz Traxler, eds, Organized Industrial Relations in Europe (Brookfield, Vt: Avebury Ashgate, 1995), pp. 287-308, at p. 304.
52. See King, 'Employers, Training Policy, and the Tenacity of Voluntarism in Britain';
53. Patrick Ainley and Mark Corney, Training for the Future: The Rise and Fall of the Manpower Services Commission (London: Cassell, 1990);
54. and Dan Finn, Training without Jobs (Alton, Hants.: Macmillan Education, 1987).
55. Boix, Political Parties, Growth and Equality, p. 177. It did then go down to £3.2 billion in 1989-90.
56. King, 'Employers, Training Policy, and the Tenacity of Voluntarism in Britain', p. 396.
57. Previously union leaders could vote in place of their members (without needing to engage in a prior vote and being able to unify whatever diversity existed among the members). See Steven Fielding, Labour: Decline and Renewal (Manchester: Baseline, 1995).
58. Robert Taylor, 'Employment Relations Policy', in Anthony Seldon, ed., The Blair Effect (London: Little, Brown, 2001), 245-70.
59. Anthony King, 'Tony Blair's First Term', in Anthony King, ed., Britain at the Polls, 2001 (New York: Chatham House, 2002), pp. 1-44.
60. Some authors would not agree that New Labour is more concerned about employment promotion than previous conservative governments. For more critical analyses, see Richard Heffernan, New Labour and Thatcherism (New York: Palgrave, 2000);
61. and Colin Crouch, 'The Parabola of Working-Class Polities', in Andrew Gamble and Tony Wright, eds, The New Social Democracy (Maiden, Mass.: Blackwell Publishers, 1999), pp. 69-83.
62. For the connection between Labour's employment strategies of the 1980s and those of the 1990s, see King and Wickham-Jones, 'Training Without the State?'
63. Labour Party, New Labour Because Britain Deserves Better (London: Labour Party, 1997).
64. Tania Burchardt and John Mills, 'Public Expenditure and the Public/Private Mix', in Martin Powell, ed., New Labour, New Welfare State? (Bristol: The Policy Press, 1999), pp. 29-50, at p. 44.
65. Peter Cressey, 'New Labour and Employment, Training and Employee Relations', in Martin Powell, ed., New Labour, New Welfare State? (Bristol: The Policy Press, 1999), pp. 171-90, at p. 177.
66. David Coates, 'New Labour's Industrial and Employment Policy', in David Coates and Peter Lawler, eds, New Labour in Power (Manchester: Manchester University Press, 2000), pp. 122-35, at p. 132. In spite of the significance of these numbers, it must be pointed out that New Labour's training policies are fundamentally voluntaristic, with no return to a training levy or to any form of employer compulsion to train.
67. Peter Cressey, 'The New Labour Government and Employment, Training and Employee Relations', paper presented at the conference on 'New Labour in Europe: Promoting Success or Decline?' Brussels, April 2002.
68. There is an additional subsidy to cover child-care expenses, and adjustments to the bottom end of the tax and National Insurance schedules. See Andrew Glyn and Stewart Wood, 'Economic Policy Under New Labor', Political Quarterly, 72 (2001), 50-66, p. 53.
69. See Lewis Minkin, The Contentious Alliance (Edinburgh: Edinburgh University Press, 1991).
70. A more detailed explanation of the responses used for the coding of insiders, outsiders and upscale groups is available from the author.
71. I follow the recommendations for modelling multilevel data structures in Marco Steenbergen and Bradford Jones, 'Modeling Multilevel Data Structures', American Journal of Political Science, 46 (2002), 218-37. I use MLwiN to analyse the data.
72. In the analysis that follows respondents who did not know about their employment status or policy preferences were not included in the analysis. Less than 5 per cent of the total responses were deleted. Given the restrictions in the availability of the data, this section's analysis is restricted to ten countries: Austria, Belgium, Denmark, Finland, France, Britain, Germany, Italy, the Netherlands and Sweden.
73. I also ran the models with an alternative definition (including in the 1 category not only those responding 'Not at all true' but also 'A little true'). The results I report were not sensitive to this change.
74. The macro-level employment protection variable measures the number of months of severance pay a worker gets upon termination without cause. For details about these macro-level variables, see the section below.
75. For more details, see Harvey Goldstein and Jon Rasbash, 'Improved Approximation for Multilevel Models with Binary Responses', Journal of the Royal Statistical Society, 139 (1996), 505-13.
76. For details on any of the explanatory variables, see the Appendix.
77. I also use an alternative definition of cabinet partisanship that relies on manifesto data (rather than expert opinions) for a government's measure in the left-right continuum. This analysis confirms the findings reported below (the results are available from the author).
78. For more details about the relationship between these variables and labour-market policy, see Rueda, 'Insider-Outsider Politics in Industrialized Democracies'.
79. The countries are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, the Netherlands, Norway, Sweden, Switzerland, the United Kingdom and the United States.
80. The periods are: 1980-84, 1985-89, and 1991-95. The excluded reference year is 1990.
81. See Nathaniel Beck and Jonathan Katz, 'Nuisance vs. Substance', Political Analysis, 6 (1996), 1-36;
82. and Nathaniel Beck and Jonathan Katz, 'What to Do (and Not to Do) with Time-Series Cross-Section Data', American Political Science Review, 89 (1995), 634-47.
83. See, for example, Swank and Martin, 'Employers and the Welfare State';
84. Boix, Political Parties, Growth and Equality;
85. Janoski, 'Direct State Intervention in the Labor Market';
86. and Janoski, The Political Economy of Unemployment.
87. See Assar Lindbeck, Swedish Economic Policy (London: Macmillan, 1975);
88. and Lars Calmfors and Anders Forslund, 'Wage Formation in Sweden', in Lars Calmfors, ed., Wage Formation and Macroeconomic Policy in the Nordic Countries (New York: Oxford University Press, 1990), pp. 63-130.
89. See, for example, Richard Layard, Stephen Nickell and Richard Jackman, Unemployment: Macroeconomic Performance and the Labour Market (New York: Oxford University Press, 1991), p. 473.