What's left of the left? Partisanship and the political economy of labour market reform: why has the social democratic party in Germany liberalised labour markets?

Patrick Lunz

LEQS – LSE 'Europe in Question' Discussion Paper Series from European Institute, LSE

Abstract: The German social democratic party initiated in 2003 the greatest overhaul of labour market legislation in decades, severely cutting unemployment benefits and slashing employment protection legislation. How can we explain this radical policy shift? This paper will present a counter-intuitive answer, arguing that the SPD implemented the reforms because of electoral interests. The rationale is two-fold and relates to changes in labour market policy supply and policy demand. First, the German social democrats strategically adjusted their labour market policy supply, seeking to maximise their office pay-offs by appealing to the median voter in a competitive political space. Second, the shift in policy-supply is also a reaction to changes in labour market policy-demand, with crucial segments of the electorate turning more favourably to welfare state retrenchment. This shift disproportionally benefited the conservative CDU and liberal FDP and forced the SPD to reposition itself in the party landscape.

Keywords: labour markets; partisanship; party competition (search for similar items in EconPapers)
JEL-codes: J48 P16 (search for similar items in EconPapers)
Date: 2013-07
New Economics Papers: this item is included in nep-cdm and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.lse.ac.uk/europeanInstitute/LEQS/LEQSPaper65.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.lse.ac.uk/europeanInstitute/LEQS/LEQSPaper65.pdf [301 Moved Permanently]--> https://www.lse.ac.uk/europeanInstitute/LEQS/LEQSPaper65.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eiq:eileqs:65

Access Statistics for this paper

More papers in LEQS – LSE 'Europe in Question' Discussion Paper Series from European Institute, LSE Contact information at EDIRC.
Bibliographic data for series maintained by Katjana Gattermann ().