Social Policies in an Age of Austerity

Social Policies in an Age of Austerity

A Comparative Analysis of the US and Korea

KDI/EWC series on Economic Policy

Edited by John Karl Scholz, Hyungypo Moon and Sang-Hyup Lee

Social Policies in an Age of Austerity is the first major publication on the topic, with a particular interest in the United States and the Republic of Korea. The authors of the ten chapters in this book review recent developments in social policies in OECD countries, with a focus on achieving greater effectiveness in public spending on social programs, under increasingly tight national budgets. The contributions cover social and fiscal policy and issues in labor market policy, in addition to the effectiveness of social insurance, education and antipoverty policy.

Chapter 4: Understanding differences in job growth in Europe, Canada and the United States: what went wrong in the United States?

Alan B. Krueger

Subjects: asian studies, asian economics, asian social policy, economics and finance, asian economics, social policy and sociology, comparative social policy, economics of social policy


Alan Krueger attempts to understand what went wrong in the US job market in the 2000s and why job growth slowed down even before the Great Recession that began in 2008. Because Canada is similar to the United States in terms of geography, technology, productivity and exposure to global markets, particular attention is devoted to comparing job growth in Canada with the United States. Krueger cites six possible reasons for weak job growth, provides evidence for two of them (the aging workforce and health insurance as a fixed cost of employment) and conjectures on the others. A rough calculation to decompose the change in the employment-to-population ratio suggests that about a third of the drop can be attributed to the secular trend and about two-thirds can be attributed to the cycle. Assuming that the factors for the secular trend are still present, he turns to possible causes of the downward trend: age, education and gender.

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