MGTECON 580: Class 8 Is there a new European Model of a Reformed Welfare State ? Old model of European Welfare Welfare pillar High value of security in job, High replacement ratio (if nevertheless lost) Structural change in existing firms Comprehensive coverage health, pensions, education, leisure, environment, equality in objective function Policy pillar Industrial policy for large firms, Encouraging of cooperation or mergers, Subsidies for ailing firms Examples Steel cartel, Shipbuilding subsidies, Textile/paper industry support

The new model of leading four countries Welfare pillar No right to keep existing jobs Right to get assistance to get a new job Right to get training Flexibility for firms and for employees Coverage with personal obligations Willingness to work may depend on life cycle position Policy pillar Efficiency and growth are absolutely necessary Fiscal orthodoxy,restraint is necessary Research, education, new technologies are the basis Enforce current strength (cluster policy, regional strength) Examples Part time work as a right in Netherlands IT Bridge and medical cluster in Denmark Telecom sectors and IT government in SF and S Conclusions: Welfare state should not be dismanteled Maybe its comprehensiveness (this varies across countries) Result is fastly decrreasing government share, moderately decrease Consensus is currently endangered in Netherlands, Denmark by far right parties