European Social Model - Evaluating The Different Social Models - Conclusion

Conclusion

Sapir (2005) proposes as a general mean to evaluate the different social models, the following two criteria:

  1. Efficiency, that is, whether the model provides the incentives so as to achieve the largest number possible of employed persons, that is, the highest employment rate.
  2. Equity, that is, whether the social model achieves a relatively low poverty risk.

As can be seen in the graph, according to these two criteria, the best performance is achieved by the Nordic model. The Continental model should improve its efficiency whereas the Anglosaxon model its equity. The Mediterranean model underperforms in both criteria.

Some economists consider that between the Continental model and the Anglosaxon, the latter should be preferred given its better results in employment, which make it more sustainable in the long term, whereas the equity level depends on the preferences of each country (Sapir, 2005). Other economists argue that the Continental model cannot be considered worse than the Anglosaxon given that it is also the result of the preferences of those countries that support it (Fitoussi et al., 2000; Blanchard, 2004). This last argument can be used to justify any policy.

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