Reinhard Pohl

The Netherlands: An employment policy role model?

ConclusionWhile in recent years the level of social security benefits in the Netherlands has been reduced somewhat —whereby to some extent this involved the employers shouldering additional costs (e.g. for disability pensions) —the benefits for unemployment and other social bene-fits remain high in international comparative terms. Despite a slight decline in social benefits as a share of GDP, public sector spending as a whole is, at around 50%, slightly higher than in Germany, although the Netherlands has not had to cope with extraordinary burdens such as have resulted from German unification.The successes achieved by the Netherlands on the labour market have been exaggerated. Firstly, the real level of unemployment is likely to be actually rather high in international terms, at least once one dispenses with a narrow definition and takes account, in particular, of the large number of occupationally disabled. Secondly, the fall in the unemployment rate is far from spectacular.Although the increase in the number of wage and salary earners has been substantially higher in the Netherlands than in west Germany, this in no way represents a comparable increase in the volume of employment—measured in working hours—as the incidence of part-time employment has increased far faster there than in west Germany.The Netherlands has achieved-slightly-higher growth than west Germany. This success is largely due to a very moderate growth of wages and salaries, amounting to a real depreciation of the guilder against the D-Mark, an economic policy strategy that can be successful in a small country, but one which, if applied by a large country such as Germany, would merely initiate a beggar-thy-neighbour race to lower real exchange rates.