Divergence within Convergence: Europeanization of Social and Labour Market Policies

Abstract

Since the adoption of the European Employment Strategy and the Lisbon strategy, convergence of social protection goals and labour market policies across EU countries features prominently on the European agenda. Embedded in convergence, Europeanization and welfare state literature, this paper examines the role of European integration in changing social policies. It shows that since 1995 social expenditures of EU member states have converged and increased on average, whereas those of non‐EU countries have diverged, corrected for cyclical and demographic effects. This EU‐specific convergence pattern of social expenditures leads to the subsequent question whether or not national policies have also converged. Relying on disaggregated expenditure data and policy indicators, this study shows an EU‐specific trend of increasingly active labour market policies. However, within this scope of activation, countries have opted for different mixes of policy instruments.

Key Words:

• Welfare states
• convergence
• active labour market policies
• Europeanization
• European Employment Strategy

Acknowledgements

This study is part of the research programme ‘Reforming Social Security’: www.hsz.leidenuniv.nl. The financial support of Stichting Instituut GAK is gratefully acknowledged. I thank the participants of the Dutch ESPAnet Research Day, Tilburg 2009, Koen Caminada, Kees Goudswaard, Beryl ter Haar, Michael Kaeding, Ferry Koster, Willem Molle, Barbara Vis and two anonymous referees for their helpful comments on earlier drafts of (parts of) my research.

Notes

1. These expenditures include the following nine social policy areas: old age, survivors, incapacity‐related benefits, health care, family, ALMPs, unemployment, housing, other social policy areas.

2. This excludes periods of means‐tested assistance. When relevant, it was assumed that the worker is aged 40 years and has paid insurance for 20 years.

3. Net replacement rates are therefore more accurate, but data are only available from 2001 onwards.

4. However, non‐EU European countries such as Switzerland or Norway may also be influenced by European integration, for example via policy competition.

5. The coefficient of variation is defined as the standard deviation divided by the mean of the corresponding data set. Because the standard deviation rises with the mean of the data set, it is valuable to use both the standard deviation and the coefficient of variation.