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Labour Market Institutions in Europe: Differences, Developments, Consequences and Reforms

Researchers investigating labour market institutions can focus on different aspects of the labour market. To begin with, they can look at the outcomes or at the policies contributing to these outcomes, or both. Others who focus on government policies are more interested in learning how governments can contribute to achieving full employment. This chapter examines how governments intervene in the labour market and the consequences of this intervention.This chapter is structured as follows. First, some specific questions regarding labour market institutions are explored: 1) Do Western and Eastern European countries differ regarding labour market institutions? 2) What are the consequences of labour market institutions for employment in innovation industries? 3) What role do active labour market policies play in processes of labour market reforms? We then present an overview of the most recent country differences and trends in employment protection legislation, unemployment benefits, and active labour market policies, in order to shed light on how these institutions have developed and may develop in the near future.