Social Protection Competition in the EMU

  • Wim Meeusen
  • Glenn Rayp

Abstract

Every step towards the completion of European integration appears to be greeted with renewed, not to say increasing, concern over its possible unwanted negative social side-effects, particularly as regards protection against social risks (unemployment, sickness and invalidity, age, ...) and poverty. Not only the governments of the different Member States but also the two EU Commissions headed in the past by Delors were deeply worried about the ability of the Member States, by applying incomes policies and social security measures, to pursue beggar-my-neighbour policies in an integrated market and all the more so in a monetary union. The EMU would provide an even greater temptation for them to do so because other economic policy instruments such as trade policy or monetary policy are kept under tight control, thereby increasing the relevance of incomes policy as an instrument at their disposal. Moreover the very creation of a single market would allow potentially more substantial gains from a competitive advantage as competition and the price elasticity of the demand of “tradables” increases. This applies in particular in a monetary union in which international transparency increases with the removal of transaction costs.

Keywords

Europe Income Expense Nash Avar 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Abraham F.,1994, Social Protection and Regional Convergence in a European Monetary Union, Open Economies Review, 5, p. 89–119.CrossRefGoogle Scholar
  2. Abraham F., 1993, The Social Dimension of an Integrated Nordic Economic Area, in Fagerberg J. and L. Lundberg (eds.J, European Integration. A Nordic Perspective, Averbury, Ashgate Publishing CompanyGoogle Scholar
  3. Aghion P. and P. Howitt, 1998, Endogenous Growth Theory, Cambridge Mass., MIT-Press.Google Scholar
  4. Alesina, A. and D. Rodrik, 1991, Distributive Politics and Economic Growth, Working Paper Series, National Bureau of Economic Research, No.3668.Google Scholar
  5. Banerjee, A. and A. Newman, 1991, Risk-Bearing and the Theory of Income Distribution, Review of Economic Studies, 58, No. 1.Google Scholar
  6. Bénabou, R., 1996, Inequality and Growth, NBER Macroeconomics Annual, Cambridge, Mass., National Bureau of Economic Research.Google Scholar
  7. Driffill J. and F. Van der Ploeg, 1995, Trade Liberalization with Imperfect Competition in Goods and Labour Markets, Scandinavian Journal of Economics, 97, p. 223–243.CrossRefGoogle Scholar
  8. Gabszewicz, J. and T. van Ypersele, 1995, Social protection and political competition’, in Recent developments in international economics, Greqam/Leqam Conference, Aix-en-Provence, 14–16/06/1995.Google Scholar
  9. Galor O. and J. Zeira, 1993, Income Distribution and Macroeconomics, Review of Economic Studies, 60, No. 1.Google Scholar
  10. Grossman, G. and E. Helpman, 1991, Innovation and Growth in the Global Economy, Cambridge, Mass., MIT-Press.Google Scholar
  11. Holmlund B., Løfgren K. and L. Engstrom, 1989, Trade Unions, Employment and Unemployment Duration, Oxford, Clarendon Press.Google Scholar
  12. Huizinga H., 1993, International Market Integration and Union Wage Bargaining, Scandinavian Journal of Economics, 95, p. 249–255.CrossRefGoogle Scholar
  13. Lejour A.M., 1995, Social Insurance and the Completion of the Internal Market, Center Paper No.9561.Google Scholar
  14. Lejour, A.M. and H. Verbon, 1996, Capital Mobility, Wage Bargaining and Social Insurance Policies in an Economic Union, International Tax and Public Finance, 3, p. 495–514.CrossRefGoogle Scholar
  15. Moene K.O., M. Wallerstein and M. Hoel, 1993, Bargaining Structure and Economic Performance, in R.J. Flanagan, K.O. Moene and M. Wallerstein, Trade Union Behaviour, Pay-Bargaining and Economic Performance, Oxford, Clarendon Press, pp. 65–154.Google Scholar
  16. Oswald A., 1985, The Economic Theory of Trade Unions, Scandinavian Journal of Economics, 87, p. 160–193.CrossRefGoogle Scholar
  17. Pencavel J., 1985, Wages and Employment under Trade Unions: Microeconomic Models and Macroeconomic Applications, Scandinavian Journal of Economics, 87, p. 197–225.CrossRefGoogle Scholar
  18. Perotti R., 1993, Political Equilibrium, Income Distribution and Growth, Review of Economic Studies, 60, No.4.Google Scholar
  19. Rayp G., 1999, Globalisation, Competitiveness, Unemployment and the Co-ordination of Social Protection, CIMDA paper E-40.Google Scholar
  20. Sørensen J. R., 1994, Market Integration and Imperfect Competition in Labor and Product Markets, Open Economies Review, 5, p. 115–130.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2000

Authors and Affiliations

  • Wim Meeusen
    • 1
  • Glenn Rayp
    • 2
  1. 1.University of Antwerp (RUCA)Belgium
  2. 2.Ghent UniversityBelgium

Personalised recommendations