Socio-Economic Review - current issue

Asset specificity, institutional complementarities and the variety of skill regimes in coordinated market economies

Busemeyer, M. R. — 2009-06-24

The concept of asset specificity has become very prominent in the literature on skill formation, welfare states and labour markets. Building on the varieties of capitalism (VoC) school, this paper points out three distinct shortcomings of this literature: first, the VoC approach does not fully account for the variation of skill regimes in coordinated market economies (CMEs); second, the VoC approach underestimates the importance of authoritative certification in determining the real portability of vocational skills; and third, the complementarities between skill formation and social policies are different from what is expected in the VoC contributions. I argue that the variation of skill regimes in CMEs covers not one, but two separate dimensions: firms' involvement in skill formation and the vocational specificity of the education system. On the basis of three case studies, I demonstrate the existence of three distinct skill regimes in CMEs: the segmentalist (firm-based) skill regime of Japan, the integrationist (school-based occupational) skill regime of Sweden and the differentiated (workplace-based occupational) skill regime of Germany.

Specificity versus replaceability: the relationship between skills and preferences for job security regulations

Emmenegger, P. — 2009-06-24

This article explores the relationship between skills and preferences for job security regulations. Two contrasting arguments are examined: the relative skill specificity thesis advanced by Iversen and Soskice [Iversen, T. and Soskice, D. (2001) ‘An Asset Theory of Social Policy Preferences’, American Political Science Review, 95, 875–893] and the replaceability thesis propounded by Goldthorpe [Goldthorpe, J. H. (2000) On Sociology. Numbers, Narratives, and the Integration of Research and Theory, New York, Oxford University Press]. Both arguments are based on the concept of asset specificity from transaction cost economics. However, they offer conflicting expectations. Iversen and Soskice expect employees with relatively specific skills to demand more job security regulations so as to increase the likelihood that there will be a return on investment. In contrast, Goldthorpe's reasoning implies that employees with very specific skills are difficult to replace. Consequently, they are less concerned about their job security than employees with few specific skills. Analysis of survey data lends support to Goldthorpe's replaceability thesis.

Taxation and the worlds of welfare

Prasad, M., Deng, Y. — 2009-06-24

We use Luxembourg Income Study (LIS) data to compare the progressivity of the tax structure in the USA and Europe. LIS data allow a comparison of tax rates that attempts to take different starting rates, thresholds and exemptions into account. Our study supports the argument others have made that the USA has more progressive taxes than the European countries. However, we find that Britain's tax structure is more regressive than those of the continental welfare states, making the mapping of tax structure onto the ‘three worlds of welfare’ imperfect. We also show that it is a mistake to assume that income and property taxes are always progressive: regressive examples of both are common in the data. But sales taxes are regressive wherever they are found, and we suggest that the proportion of tax revenue raised through sales taxes can serve as an index of overall progressivity in situations where the detailed data examined here are not available. We close by outlining several possible explanations for the inverse correlation between tax progressivity and welfare state effort.

Where do innovations come from? Transformations in the US economy, 1970-2006

Block, F., Keller, M. R. — 2009-06-24

This article seeks to reconnect to scholarship from the 1970s and 1980s that emphasized significant discontinuities in the development of the US economy. Drawing on a unique data set of prize-winning innovations between 1971 and 2006, we document three key changes in the US economy. The first is an expanding role of inter-organizational collaborations in producing award-winning innovations. The second is the diminishing role of the largest corporations as sources of innovation. The third is the expanded role of public institutions and public funding in the innovation process. This leads us to the surprising conclusion that the USA increasingly resembles a Developmental Network State in which government initiatives are critical in overcoming network failures and in providing critical funding for the innovation process.

Falling fertility rates: new challenges to the European welfare state

Vos, A. E. — 2009-06-24

One of the biggest issues currently plaguing many advanced industrialized countries is the persistence of below-replacement fertility rates (fewer than 2.1 children per woman). Decreasing fertility rates threaten economic growth, while government budgets have to accommodate more pension and health services, as the number of adults of working age who contribute to older generations' pensions diminishes. In addressing the dilemma of low fertility in Europe, we are inevitably confronted with a combination of institutional and human factors: while governments can attempt to put into place institutions and policies that will encourage childbirth (such as subsidies for children, family leave policies, and day care facilities), population reproduction is fundamentally a micro-level decision. The crux of the matter is that women and men must choose to have children; no number of institutional configurations will by themselves result in the birth of babies. Rather, it is the combination of systems of welfare provision, people's ability to provide for their well-being, and the choice of women and men to conceive children, that will likely result in increased fertility rates across Europe. This article examines several factors that influence the makeup of state, market, and family decisions, surveying literature in the field of work and family reconciliation and fertility decisions. The article concludes by highlighting several issues of societal polarization that are related to family policy and indicates avenues for future research on fertility and government policies.

On Suzanne Berger 'How We Compete: What Companies Around the World Are Doing to Make it in Today's Global Economy', New York, Doubleday, 2005: Panel at the SASE 2008 Annual Meeting, San Jose, Costa Rica

Streeck, W., Thelen, K., Whitford, J., Zeitlin, J., Berger, S. — 2009-06-24

Neil Fligstein Euroclash: The EU, European Identity and the Future of Europe. Oxford, Oxford University Press, 2008

Hay, C., Ross, G., Streeck, W. — 2009-06-24