How good is the Dutch social welfare miracle?

Despite recent economic troubles, the Dutch social welfare state is commonly considered one of the most successful in Western Europe. The country also is reputed to have low unemployment, a 2002 estimate (see the above link) cited an unemployment rate of 4.1 percent, other measures give a figure closer to seven percent. In any case note that measured unemployment rates are higher in most other parts of the EU, Ireland being one exception.

I now learn that the Dutch miracle may not be so special after all:

…disability leave…can be taken at full salary for a year and, after a single day’s work, is renewable for another year, and so on indefinitely. If one includes the disproportionate number of Dutch goldbrickers as unemployed, then the job-creation part of the miracle looks more like a magician’s sleight of hand. Even though the Netherlands is at the very top of longevity charts, estimates of persons on disability run from 8 to 13 percent of the workforce – between two and three times the EU average. They raise the true rate of Dutch unemployment into double digits.

This may be one reason why the Dutch economy grew only 0.3 percent in 2002.

The quotation (p.378) is from John Gillingham’s excellent European Integration, 1950-2003: Superstate or New Market Economy?.


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