Since the onset of the financial crisis, perhaps the central question facing European policymakers is how to regulate the labor market in ways that marry robust job creation with support for workers’ economic security.  Whereas some see labor-market regulation, such as collective bargaining, employment protection, and unemployment benefits, as central pillars of social-protection systems that foster labor-market participation and worker productivity, others view such protections as inhibiting countries’ capacity to respond to evolving economic challenges.  Given these distinctive understandings, European countries have seen substantial variation in the extent and character of labor-market liberalization.

This panel explores the politics of labor-market reform in Europe from both macro-historical and micro-level perspectives, focusing on the role of ideas, interests, and institutions.  It highlights the centrality of ideas in shaping how producer groups see their 'objective' interests, and also how ideas shape actors' understanding of how to best implement such interests. Comparative political economy has posited a range of theories about the preferences of labor and capital with respect to labor-market policy.  Neo-Marxists, for example, argue that the left has long been eager to counter the right’s efforts to "incarcerate labor in the market."  By contrast, students of Varieties of Capitalism have posited that employers, rather than labor, have been instrumental in driving trajectories of labor-market regulation.  This panel takes a different approach, building on the institutionalist tradition in political economy by exploring how the organization of interests, as well as that of the polity, alters the strategies they adopt.