Author: Anna Giulia Ingellis
Co-Authors ⁄ Presenters: Heyes Jason
Economic Crisis and Labour Market Responses: Applying Economic Growth Models to Southern European Countries
The recent economic crisis hit the Southern European Countries (SECs) with particularly severe force. As the initial financial crisis mutated into a crisis of the Eurozone, many SECs came to experience financial distress, leading them to seek support from the troika of the European Commission, European Central Bank and the International Monetary Fund. In return for support, economies were put under pressure to implement far-reaching social policy and labour market reforms. The governments of these countries have, however, responded in different ways (Molina and Ibáñez, 2013; Hastings and Heyes 2015; Ingellis, 2016). Researchers have ascribed differences in policy response to national politics (Picot and Tassinari 2014), country-specific economic imbalances that developed in the years preceding the crisis (Schmidt 2012) or institutional factors (Eichhorst et al., 2009).
The differing responses to the crisis among the SECs has called into question the pre-crisis tendency of comparative political economists to treat southern economies as a coherent ‘variety of capitalism’ (Hall and Soskice 2001). Recent attempts to move beyond the varieties of capitalism (VoC) approach to comparative analysis include Thelen’s (2014) focus on interests, power and coalitions and the growth model analysis of Baccaro and Pontusson, (2016), which focuses on drivers of aggregate demand. These valuable contributions have focused predominantly on northern European economies. Our paper, by contrast, engages with both approaches in order to assess the extent to which they shed light on the dynamics of labour market change in SECs. Drawing on Eurostat data, the paper discusses the extent to which individual SECs can be characterised as typifying different national growth models, tracing the implications of different pre-crisis accumulation paths for post-crisis labour market developments. While providing some support for the ‘growth model’ thesis, the paper also highlights the importance of political and social agency in explaining outcomes.