The Role of Business in the Development of the Welfare State and Labor Markets in Germany: Containing Social Reforms, 1st Edition (Paperback) book cover

The Role of Business in the Development of the Welfare State and Labor Markets in Germany

Containing Social Reforms, 1st Edition

By Thomas Paster


248 pages | 5 B/W Illus.

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This book assesses the role of employers in the development of welfare state and labour market institutions. Building on an in-depth analysis of Germany, a market economy known to often provide economic benefits to firms, this book explores one of the most contested issues in the comparative and historical literature on the welfare state.

In a departure from existing employer-centered explanations, the author applies new empirical data to contend that the variation in acceptance of social reform depends more on changes in the types of political challenges faced by employers, than on changes in the type of institutions considered economically beneficial. Covering major reforms spanning more than a century of institutional development in unemployment insurance, accident insurance, pensions, collective bargaining, and codetermination, this book argues that employers support social policy as a means to contain political outcomes that would have been worse, including labour unrest and more radical reform plans. Using new and controversial findings on the role of employers in welfare state development, this book considers the conditions for a peaceful coexistence of a generous welfare state and the business world.

The Role of Business in the Development of the Welfare State and Labor Markets in Germany will be of interest to students and scholars of welfare and social policy politics, political economy and European politics.


"This new, excellent book by Thomas Paster is a timely contribution to this debate as it explores the presence of variability in the preferences of German employers for social policies. Looking at the behavior of peak associations of industrial employers since Bismarck, Paster illustrates how the particular sets of institutional arrangements that characterize the modern German economy are in fact the outcome of political conflicts."

- Michel Goyer, University of Birmingham

Table of Contents

1. Introduction 2. Theory: Economic Interests and Political Constraints 3. The Origins of Employers’ Associations: Coordinating against Organized Labor 4. Bismarck’s Social Reforms: Employers and Social Pacification 5. World War I and Its Consequences: Class Collaboration in Exceptional Times 6. Business and the Origins of Unemployment Insurance: Protecting Work Incentives 7. Business after World War II: The "Social Market Economy" 8. Post-War Social Policy Reforms: Containing Welfare Expansion 9. Codetermination: Employers against Economic Democracy 10. Employers and the German Model Today 11. Conclusions: How Employers Shaped the Welfare State

About the Author

Thomas Paster is a research fellow at the Max Planck Institute for the Study of Societies (MPIfG) in Cologne, Germany.

About the Series

Routledge Studies in the Political Economy of the Welfare State

This series presents leading edge research on the recasting of European welfare states. The series is interdisciplinary, featuring contributions from experts in economics, political science and social policy. The books provide a comparative analysis of topical issues, including:

  • reforms of the major social programmes - pensions, health, social security
  • the changing political cleavages in welfare politics
  • policy convergence and social policy innovation
  • the impact of globalization.

Learn more…

Subject Categories

BISAC Subject Codes/Headings:
POLITICAL SCIENCE / Government / Comparative
POLITICAL SCIENCE / Public Policy / Social Services & Welfare