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Howell, David R. [editor] (2004) Fighting Unemployment: The Limits of Free Market Orthodoxy, Oxford University Press

With much of Europe plagued by high levels of unemployment, it became the conventional wisdom in the 1990s that the "American Model" of deregulated labor markets and a slimmed down welfare state was a necessary condition for good employment performance. International policy and banking institutions (for example, the OECD and the IMF) and many mainstream economists strongly advocated "structural reforms" that would, if adopted, fundamentally transform the economies of many developed countries. These prescriptions include limiting trade union strength and centralized bargaining, sharply reducing unemployment benefit generosity, eliminating employment protection laws, and most critically, encouraging greater earnings inequality via downward wage flexibility for less skilled workers.

Fighting Unemployment offers a critical assessment of this free market orthodoxy. Through both cross-country statistical analyses and country case studies, leading economists from seven North American and European countries argue that the accepted view has greatly exaggerated the extent to which the unemployment problem can be blamed on protective labor market institutions, that there is no simple tradeoff between unemployment and wage inequality, and that the justification for dismantling the welfare state to fight unemployment rests more on free market ideology than on the empirical evidence. The larger message of this book is that many labor market models - ranging from the relatively free markets of the U.S. to the much more regulated markets of Scandinavia - are compatible with low unemployment, but strong labor market institutions are required to limit the incidence of very low wages, high earnings inequality, and excessive job insecurity.

Table of Contents:

Chapter 1............................................................................................................1
Introduction
David R. Howell

Chapter 2............................................................................................................37
Wage Compression and the Unemployment Crisis: Labor Market Institutions, Skills, and Inequality-Unemployment Tradeoffs
David R. Howell and Friedrich Huebler

Chapter 3............................................................................................................77
Labor Market Institutions and Unemployment: A Critical Assessment of the Cross-Country Evidence
Dean Baker, Andrew Glyn, David R. Howell, and John Schmitt

Chapter 4............................................................................................................131
Testing the Flexibility Paradigm: Canadian Labor Market Performance in International Context
Jim Stanford

Chapter 5............................................................................................................169
Is the OECD Jobs Strategy Behind US and British Employment and Unemployment Success in the 1990s?
John Schmitt and Jonathan Wadsworth

Chapter 6............................................................................................................205
Labor Market Success and Labor Market Reform: Lessons from Ireland and New Zealand
Andrew Glyn

Chapter 7............................................................................................................231
Employment Performance and Labor Market Institutions: The Case of Spain
Rafael Muñoz de Bustillo Llorente

Chapter 8............................................................................................................293
Is Labor Market Regulation at the Root of European Unemployment? The Case of Germany and the Netherlands
Ronald Schettkat

Chapter 9............................................................................................................323
Labour Market Policy, Flexibility and Employment Performance in Denmark and Sweden in the 1990s
Peter Plougmann and Per Kongshøj Madsen

Chapter 10............................................................................................................361
Labor Market Institutions and Unemployment: An Assessment
David R. Howell