Mass Unemployment and the State

Abstract

Ever since the 1970s, the problem of unemployment has defined politics in Western Europe, but governments have responded in different ways. In the 1970s and 1980s, some governments used macroeconomic policy to support domestic economic activity and maintain full employment. In the 1990s and 2000s, on the other hand, some governments made large labor market policy changes to ensure that the unemployed were looking for jobs, well-trained, and matched with employers willing to hire them. Comparing Austria, Denmark, the Netherlands, and Sweden, this book shows that governments made different choices because of underlying political differences: the development of party systems, corporatism, and norms regarding the purpose of political authority. Low unemployment was the linchpin of political arrangements in Western Europe after the Second World War. When mass unemployment became a threat again in the 1970s, Austria and Sweden – where the post-war political order remained intact – used economic policies to preserve full employment. In the 1990s and 2000s, governments in Denmark and the Netherlands – who had lived with high unemployment for a long period of time and reformed their political models in the course of the 1980s – undertook far-reaching labor market policy changes.

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