One market, how many social models? Policy and performance indicators for the EU - 27

Abstract

In this paper I reappraise the Boeri-Sapir analysis of four EU social models in reference to the EU-27 countries. I conduct a simple fact-finding exercise by comparing indicators of policy inputs, outcomes and of economic performance for the period 2000-2005. The first three sections elaborate on the motivations for this exercise. Here, I argue that the debate on "social Europe" fits well within the agenda for the internal market.However, I also argue that there is no need to harmonize social policies across member states, and that their differences are a value in itself. In section four I document to what extent labor market policies of the EU members differ from each to other, how can they be synthetically identified and whether or to what extent differences in labor market outcomes are related to policy differences . The main suggestion of this part is that the simplest ways to describe countries is in terms of the overall size of their Labor Market Progreammes elative to GDP. On the basis of this indicator, more "generous" countries generally display high employment rates and appear more successful than others at reducing poverty risk. Two other broad questions motivate this study: whether the new member states of the EU can be meaningfully compared to the older members, and whether the observed changes in social policies point to a possible de facto convergence of the different social models. Tentative answers to both questions are positive (albeit, for the second one, possibly only in the long run).