Public Sector Shock

Public Sector Shock

The Impact of Policy Retrenchment in Europe

Edited by Daniel Vaughan-Whitehead

The goal of this volume is to study this ‘public sector shock’. While budgetary reforms seek to ensure a more balanced and sound economic policy, they may generate new work inequalities among public sector employees, most particularly among women, who account for a considerable proportion of public sector employment. Cuts in education and training may also have an impact on the quality of human capital in both the public and private sectors, despite the fact that the recent crisis has shown the value of education as employees with better skills and training are more likely to maintain their jobs and incomes.

Chapter 1: Public sector shock in Europe: Between structural reforms and quantitative adjustment

Daniel Vaughan-Whitehead

Subjects: economics and finance, labour economics, public sector economics, social policy and sociology, economics of social policy, labour policy


The public sector has always been considered a cornerstone of European societies and, as such, also an essential lever for economic growth and political stability. It is also considered to be an essential element of the European Social Model, with many EU provisions serving as a useful framework for the good functioning of the public sector in EU member states. The public sector also represents a priority for public budgets. It is certainly also because of its central role that the public sector has been the constant object of reforms and restructuring over recent decades. All European countries have gone through a series of restructurings and reforms of their public sector and public expenditure. However, of late we have experienced what we might call a ‘public sector shock’. The budget deficits with which most European countries find themselves – and which have been aggravated, even provoked and fuelled by the latest financial and economic crisis, which started in 2008 – have plunged the public sector into a wave of ‘adjustments’, unprecedented not only in terms of their pace but also the scale of the attendant cuts in expenditure, employment and wages.

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