Giuseppe Bertola, Tito Boeri and Giuseppe Nicoleti (Eds.), Welfare and Employment in a United Europe.

Giuseppe Bertola, Tito Boeri and Giuseppe Nicoleti (Eds.), Welfare and Employment in a United Europe. Cambridge, MA: MIT Press 2001. $32.95

This is an important and timely book that analyses some of the macro-economic

arguments about European welfare states. The authors are European economists and they are mostly concerned with the interconnecting effects of economic and monetary integration in the European Union on social protection systems, labour and product markets. The book is in two main parts. The first looks at European "welfare systems" as a whole and their relationship to labour markets; the second looks more specifically at product and labour markets. For readers of this journal, the primary interest will lie in the first half of the book and it is there that I concentrate in this review.

The first point for an international readership is that the book is primarily aimed at other Europeans. Terminology, especially the use of the term "welfare" to describe states, systems of social protection, and other social interventions could leave American readers somewhat confused. But this terminological difficulty also obscures more fundamental assumptions about what is being analysed. Essentially, the authors focus on cash transfers through social insurance and social assistance--with references to employment protection legislation and taxation--but there is little emphasis on services in kind especially education and training provision, and also, crucially, childcare. The emphasis on cash transfers, combined with the economic theoretical emphasis, represent both the book's major strength and weakness.

The strengths of the book are in the quantitative analysis of cross-national profiles and trends in social policy. Boeri in the opening chapter takes some of the simplistic theories put forward about the effects of European integration and then demonstrates that they are not substantiated by the facts. This introductory chapter is followed by a huge and ambitious analysis of the current performance of EU welfare states and of their actual and potential influence on economic performance. This one hundred-page chapter is the heart of the book for social policy readers. The analysis is clearly hypothesised and rigorously done and sets a benchmark for all future comparative work of this type. There is much to admire and the breadth of analysis--of income inequality and poverty rates before and after transfers, of changes in composition and growth in spending, and of changes in employment rates--that comprehensively covers the ground set by the theoretical agenda.

The authors then address the question of how policy should change and the role for super-national policy at the EU level. They argue for a EU wide means-tested social assistance safety net with national and regional variation in rates to reflect costs of living. They also argue for social insurance benefits to be based on actuarially fair calculations. Their third argument is that policy design and responsibility for service-based provision should remain at the national level.

The book then contains two responses to the chapter by macroeconomist Charles Bean and from political sociologist Gosta Esping-Anderson. The first is four pages and the latter is sixteen pages long. These comments help the reader focus on some of the most important contributions and weaknesses of the main authors' analysis, but they also point to a real problem in the overall structure of the book because there is little overarching thematic structure to help the reader refer to and from the arguments. What we have is an economist who broadly agrees with the approach but has reservations about some of the methodology and interpretation of results, followed by a much longer contribution from an opposing viewpoint that exposes some of the fundamental weaknesses of the analysis and puts counter arguments against the proposals--in particular the proposal for a EU-wide social assistance programme of last resort. Esping Anderson also puts forward different proposals that focus on family and female labour participation issues, which he quite correctly sees as crucially absent from the analysis. The fact that a commentator from a different discipline sees the problems of social policy differently is not surprising, but there is nowhere in the book for these differences to be explored further. These contributions therefore sit uncomfortably with the overall approach of the book. They potentially widen its scope to include important inter-disciplinary debates, but nothing happens. They are just left to sit there before the book moves on to another huge 100-page chapter on product and labour market policies. While much of what both commentators say is first class, it is a shame that the issues are not focused in a well-structured and themed debate.

All in all the book makes an excellent reference source for comparative social policy analysis, and there is so much to commend it, particularly to post-graduate students who are undertaking comparative quantitative research. However, I would find it difficult to recommend to a wider readership unless they were particularly interested in the EU debate about integration.

Martin Evans
London School of Economics