• DOI:10.1093/0199247757.003.0004
• Corpus ID: 5414914

Social protection and the formation of skills: a reinterpretation of the welfare state

@inproceedings{Soskice2001SocialPA,
  title={Social protection and the formation of skills: a reinterpretation of the welfare state},
  author={David Soskice and Margarita Est{\'e}vez-Abe and Torben Iversen},
  year={2001}
}

• D. Soskice, Margarita Estévez-Abe, Torben Iversen
• Published 2001
• Economics

This paper outlines a new approach to the study of the welfare state. Contrary to the emphasis on “decommmodification” in the current literature, we argue that important dimensions of the welfare state – employment protection, unemployment protection, and wage protection – are designed to make workers more willing to invest in firmand industry-specific skills that increase their dependence on particular employers and their vulnerability to market fluctuations. Workers will only make such risky investments when they have some insurance that their job or income is secure. Otherwise, they will invest in general, and therefore portable, skills. In turn, because the skill composition of the work force constrains the set of product market strategies that firms can pursue successfully, employers will support social protection that facilitates the set of skills they need to be competitive in particular international product markets. We show that our argument is consistent with observed clusters of social protection and skill profiles among OECD countries, and that these clusters are associated with very different distributional outcomes and patterns of gender-specific labor market segmentation.