European social model
Examples common among European countries include universal health care, free higher education, strong labor protections and regulations, and generous welfare programs in areas such as unemployment insurance, retirement pensions, and public housing.
The Treaty of the European Community set out several social objectives: "promotion of employment, improved living and working conditions ... proper social protection, dialogue between management and labour, the development of human resources with a view to lasting high employment and the combating of exclusion.
Tony Judt lists a number of causes: the abandonment of protectionism, the baby boom, cheap energy, and a desire to catch up with living standards enjoyed in the United States.
The European social model also enjoyed a low degree of external competition as the Soviet bloc, China and India were still isolated from the rest of the global economy.
[9] In recent years, some have questioned whether the European social model is sustainable in the face of low birthrates, globalisation, Europeanisation and an ageing population.
Trade unions have a high membership and an important decision-making power which induces a low wage dispersion or more equitable income distribution.
It is the model with the lowest share of expenditures and is strongly based on pensions and a low level of social assistance.
There exists in these countries a higher segmentation of rights and status of persons receiving subsidies which has as one of its consequences a strongly conditioned access to social provisions.
[citation needed] Trade unions tend to have a substantial membership which again is one of the explanations behind a lower income dispersion than in the Anglo-Saxon model.
Sapir (2005) and Boeri (2002) propose looking at the employment-to-population ratio as the best way to analyse the incentives and rewards for employment in each social model.
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).
