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Small economy macroeconomics

The economic success of Ireland, Denmark, Austria and the Netherlands compared

  • Unemployment
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Intereconomics

Abstract

In recent years, four small European economies—Austria, Denmark, Ireland and the Netherlands—have attracted attention through their successful employment policies. Why did these countries, which are all typical European welfare states with high levels of social security, high tax rates and low inequality, perform so well? Can they serve as examples for the rest of unemployment-ridden Europe?

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References

  1. See R. B. Freeman, R. Schettkat: From McDonald's to McKinsey: Comparing German and US Employment and Wage Structures, Oxford, Institute of Economics and Statistics, Labour Markets: Stocks and Flows conference, 1998, for a discussion.

  2. See R. B. Freeman, R. Schettkat: Zwischen Fastfood und Excellence; Die Beschäftigungslücke in Deutschland im Vergleich zu den USA, in: Hamburger Jahrbuch für Wirtschafts- und Gesellschaftspolitik 1999 (forthcoming).

  3. G. Russo, R. Schettkat: Structural Economic Dynamics and Employment in Highly Industrialized Economies, in: P. Petit, L. Soete (eds.): Technological Change and Employment in Europe, Aldershot 1999 (forthcoming).

  4. C. Teulings, J. Hartog: Corporatism or competition? Labour contracts, institutions and wage structures in international comparison, Cambridge 1998; J. Visser: Industrial relations in Austria, Denmark, Ireland and the Netherlands, Amsterdam 1998; E. Appelbaum, R. Schettkat: The Increasing Importance of Institutions for Employment Performance, in: G. Schmid, J. O'Reilly, K. Schoemann (eds.): International Handbook of Labour Market Policy and Policy Evaluation, London 1996, pp. 791–810.

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  8. For a summary see R. Schettkat: The Labor Market Dynamics of Economic Restructuring, The United States and Germany in Transition, New York 1992.

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  11. The Dutch tax system accommodates such an effect (see J. Hartog: ILO Country Employment Policy Review: the Netherlands. Amsterdam 1998) but as long as there are sellers and buyers rising house prices have elements of zero sum games.

  12. F. Giavazzi, M. Pagano, op. cit. Can severe fiscal contraction be expansionary?: tales of two small European countries, in: NBER Macroeconomics Annual 1990, pp. 75–110.

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  15. See E. Appelbaum, R. Schettkat, op. cit., The Increasing Importance of Institutions for Employment Performance, in: G. Schmid, J. O'Reilly, K. Schoemann (eds.): International Handbook of Labour Market Policy and Policy Evaluation, London 1996; C. Teulings and J. Hartog, op. cit., Corporatism or competition? Labour contracts, institutions and wage structures in international comparison, Cambridge 1998.

  16. See R. Schettkat, J. Reijnders: The disease that became a model. The economics behind the employment trends in the Netherlands, Utrecht 1998.

  17. P. K. Madsen: ILO country employment policy review: Denmark, 1998; OECD: Economic Surveys Denmark 1996–1997, Paris 1997.

  18. See K. Pichelmann, H. Hofer: ILO Country Policy Review: Austria, 1998; E. Nowotny: The Role of Macroeconomic Policy in Overcoming Slow Economic Growth, in: W. Filc: Makrooekonomische Ursachen der Arbeitslosigkeit, Berlin 1999.

  19. A. Alesina, L. H. Summers: Central bank independence and macroeconomic performance: some comparative evidence, in: Journal of Money, Credit and Banking, Vol. 25, 1993, pp. 151–162.

  20. Net exports in the Netherlands have risen substantially but these are concentrated in manufacturing industries (see R. Schettkat, J. Reijnders, op. cit. The disease that became a model. The economics behind the employment trends in the Netherlands, Utrecht 1998), whereas the main employment gains have occurred in service industries.

  21. P. K. Madsen, op. cit. ILO country employment policy review: Denmark, 1998; OECD: Economic Surveys Denmark 1996–1997, Paris 1997.

  22. K. Abraham, S. Houseman: Job Security in America: Lessons from Germany, Washington 1993.

  23. (see R. Schettkat, J. Reijnders, op. cit. The disease that became a model. The economics behind the employment trends in the Netherlands, Utrecht 1998).

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Authors and Affiliations

  1. Utrecht University, The Netherlands

    Ronald Schettkat

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  1. Ronald Schettkat
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Schettkat, R. Small economy macroeconomics. Intereconomics 34, 159–170 (1999). https://doi.org/10.1007/BF02927843

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