Firms and the welfare state: the emergence of new forms of unemployment

The goal of this paper is to provide the elements of a unitary analytical framework that incorporates the findings of two bodies of literature which, so far, havedeveloped independently: comparative models of the political economy that distinguish between coordinated and uncoordinated market economies and comparative models of social policy. While sharing the emphasis on firm behaviour of the first models, the paper attempts to build a micro-logic into comparative models of social policy, in order to overcome the functionalist character of these analyses.By using combined insights from both models and by specifying the 'micro-regulatory' role of the welfare regimes and the impact of welfare regimes on firm adjustment, we can explain cross-national differences in the changes of the institutions situated at the interface between the welfare state and firms during the1980's and cross-national differences in the mix between employment and non-employment.