5th International Research Conference on Social Security Warsaw, Poland, 5-7 March 2007 Social security and the labour market: A mismatch? Neoliberal fatalism? A fresh look at the employment-income equality tradeoff Audrey Koulinsky Nadine Richez-Battesti

Neoliberal theory : Employment-Income equality & Employment-Social Benefits tradeoff as an economic fatality Versus Variety of capitalism theory : Employment-Income equality & Employment-Social Benefits tradeoff not homogeneous between countries

Wages of men unequality, D5/D1 and D9/D5, Source : à partir des données de lOCDE, perspectives de lemploi (1996).

Social Benefits rate, Employment rate, Disparity index, Unemployment rate Source : à partir de données tirées de OCDE Economic Outlook Database.

Unemployment rate by level of men workers qualification Unqualified / qualified men workers unemployment rate Unemployment rate variation France Allemagne (RFA) Royaume-Uni Italie Etats-Unis

Unemployment rate by level of men and women workers qualification Unqualified / qualified workers unemployment rate Unemployment rate variation Royaume-Uni Autriche Allemagne Belgique France Italie Suède Finlande Grèce Espagne Danemark Portugal Irlande Pays-Bas

Neoliberal theory seems to explain the German case only : - Low and stagnant income unequality - Low but strongly increasing unemployment rate But not the North American case : - High and strongly increasing income unequality - High unemployment rate till 1985 decreasing after then Nor the Swedish case : - Low and stagnant income unequality - Low unemployment rate till 1990, strongly increasing till 1998, and strongly decreasing after then EUROSCLEROSIS

Estimated long run relationship Employment rate = c + a.Disparity index – b.Social benefits rate Employment-Income equality tradeoff Employment-Social benefits tradeoff

Estimation results German model estimation was unsuccessfull Employment-Income equality and Employment-Social benefits tradeoff exist but are stronger in the USA than in Sweden Sweden and United-States evolute on two different levels of equilibrium United-States low employment, low income equality and low social benefits rate Sweden high employment, high income equality and high social benefits rate high level equilibriumlow level equilibrium