Paper presented at ‘Expert Meeting’ The Small Countries’ Employment ‘Miracles’ in Critical Comparison. Examples to Learn

From?

Amsterdam, Universiteit van Amsterdam, 25 and 26 January 2002

Draft

A Swiss Miracle ?

François Xavier Merrien Faculty of Political and Social Sciences

University of Lausanne Switzerland

fmerrien@unil.ch In the post World War II decades, Switzerland enjoyed some of the highest levels of wealth found in the world. The level of inflation was low, the rate of employment was very high especially among men. The country was obliged continually to attract migrant workers. Until the 1970s, these good performances were not specific to Switzerland. But, after the vanishing of the “full-employment” era in the wake of the two oil-price shocks, Switzerland was one of the few countries to experience unemployment rate well below the OECD average. Nevertheless, Switzerland performance did not received much attention because no spectacular crisis, nor policy change, nor miracle happened. Swiss people interpreted their successes has the result of their “Sonderfall”, of the peculiarity of their social, political and economic structures. By contrast, the beginning of the 1990s seemed for many to mark the end of the Swiss exceptionalism. Switzerland undergone an economic recession of exceptional length. During this period of time, the unemployment rate increased significantly. The economic recession, and the development of unemployment and poverty produced a shock in public opinion. The question was no more how to explain the Swiss exception, but how to explain the Swiss decline and what to do to face the new issue of low growth and growing unemployment. But, years later, starting in 1998, a rapid economic recovery created a large number of jobs, a sharp decline in unemployment rates. By september 2001, it has been reduced to 1.7%. From an international perspective the Swiss model has recovered the exemplary place which it has long held and from which it had moved away during the 1990s. But, from september 2001 to april 2002, Switzerland did not escape the world economic slowdown. Employment growth slowed considerably and the unemployment rate rose to 2.6% in march 2006. Nevertheless, the previsions are rather optimistic with a 0.1% decline in april 2002. Even if for Switzerland an unemployment rate of 5% seems very high, in international comparison, it is clearly low. On the long term, Switzerland has always been able to maintain a low rate of unemployment, even in contexts of low growth. On the long run, this is an astonishing performance. Nevertheless, the good Swiss employment performances has received less attention than the Danish or the Netherlands one. In fact, in the Swiss case, it is hardly possible to argue on the effects of labour policy changes. For international experts, it is very desappointing to have no success story to present What we can learn from the Swiss experience is rather that a high employment rate is possible

under specific institutional settings. As Herman Schwartz (this volume) has asserted, employment miracles are a specific combination of pluck (intentional change), luck, or stuck. So, in order to take this complexity into account, I will proceed as follow: The first part of the paper describes the main evolution of the labour market in Switzerland from the golden age of full employment to the present recovery. It then try to evaluate to what extent the present situation of full employment is real and not due to a statistical artifact. The second part points out the various structural factors that can been put forward to explain the very good performances of the Swiss labour market on the long run. The third part tries review the main factors that might have played an important role in the rapid fluctuations that seems to be a characteristic of the Swiss labour market in the recent years.

Part I : The Swiss labour market 1. from the 1950’s to the present. In order to describe the performance of the Swiss labour market it is possible to identify three main periods. First of all, there is what can be called the “golden age” of the Swiss labour market (1950-1990), then the recession age of 1990s, then the turning point of 1998. Figure 1: Unemployment in SWITZERLAND, the UE15, and the OECD zone (1974-2001). Source : OECD, Labour Force Statistics, 2001. From 1950 to 1990, Switzerland enjoyed high levels of growth. Switzerland was one of the three or fourth richest country in the world and enjoyed a situation of “full employment”. Despite some economical crises, unemployment rate never reached more than 1%. The rate of employment was very high (especially among men). For most of this period, the economy was in a stage of growth, not of recession, but even in period of recession as it was the case in the mid-1970s and at the beginning of the 1980s, Switzerland was able to maintain a low level of unemployment. The rate of unemployment was very low and the country was obliged continually to attract migrant workers. Among the factors that might explain the Swiss economic miracle after the second World War we should highlight the fact that, during the war, Switzerland was a “neutral” country. With its intact industry and its unique blend of product (drugs, prepared food, watchs and so on) it was ideally placed to supply the demand for consumption goods emanating from a devastated Europe (helped by the Marshall plan). Neither capital nor labour shortage interfered with the progress of the unparallel post-war boom. With the cold war, capital flows to Switzerland from all over the world. The stability of the Swiss franc, its unique convertibility, and the “bank secrecy” offered a security which no other country could match. At the same time, an endless supply of cheap labour flowed into the country from southern Europe (Italy, Portugal, Spain). In the 1970’s, following the first oil shock, Switzerland entered into a severe depression. One of the main factor explaining the Swiss crisis was the flow of financial capital to Switzerland and the large appreciation of the Swiss franc measured against the currencies of his trading partners. The Swiss industry lost its competitiviness The watch’s industry and other branches of industry decline rapidly. From this period, the evolution of Swiss growth is much more erratic than during the 20 years following the second WW. Nevertheless, even in periods of economic troubles

(1975-1976, 1982-1983, 1986-1987), the unemployment rate was unexpectedly low At the beginning of the 1990s the situation changes rapidly. Switzerland undergone a new round of economic difficulties. Between 1990 and 1998, the average annual growth of GDP is 0,4%, the weakest in Europe (OECD, 1999a). In a few years, a 5% rate of unemployment can be observed. This radically new situation leads some international observers to question whether the era of exceptionally low Swiss unemployment, relative to the rest of Europe, is over (OECD, 1996, 7). But the performance of Swiss labour market since 1998 gives a negative answer. Starting in 1998, a rapid economic recovery created a large number of jobs, a sharp decline in unemployment rates. By september 2001, it has been reduced to 1.7%. From an international perspective the Swiss model has recovered the exemplary place which it has long held and from which it had moved away during the 1990s. 2. Is the miracle real ? However, it is possible to question the significance of any figure. A true picture of the labour market must inform us about the number of persons participating to the labour force (particularly women), the number of people involuntary working part-time, the differenciation of the labour force by age and by gender, the number of people benefiting of disability benefits, the number of “ discouraged workers ” and so on. A number of study shows that employment performances could be influenced by political measures (such as early retirement in Belgium, France, Italy, Germany or a large level of paid“ parental leave ” like in Denmark). It depends also of the behavior of women and of their decision to integrate the formal labour force or to work home. From a comparative point of view, the employment ratio (total labour force as a % of population from 15 to 64 years old) has differed very much among the OECD countries. It is clearly very low (under 70%) in Belgium (average 1960-1997= 62.4%) , Italy (60%), Ireland (63.9), the Netherlands (61.6), and Spain (59.6). It is high in the USA (71.3), Japan (72.9), Australia (70.5), Denmark (78.1), Norway (72.1), Sweden (77.8) and Switzerland. This ratio has risen or remained constant at a high level in Austria, Denmark, Norway, the USA and Switzerland. It increased since the mid-1980 in Ireland, but remained relatively low (1997=64.2). It increased also in the Netherlands (72.1). By contrast, it remained at a very low level in Italy (1997=59.7), in Spain (1997=60.3). There is a long term decline in France and in Germany. In Italy and Spain, the female participation in the labour force is also the weakest (respectively 44.1% and 47.1 as a % of female population from 15 to 64 years). In the scandinavian countries the female participation to the labour force is traditionally high. In France and Germany, from the beginning of the 1990s, it is stagnating around 60%. In Ireland it is rapidly growing, but it remained at a low level (50.4% in 1997). In the USA, the UK, as in the Netherlands it is increasing (in the Netherlands from 48.8.% in 1989 to in 1997). From all these point of view, Switzerland experience can be evaluated as successful, even in comparison with the USA and Denmark. Table 1: Labour Force participation in 1990 and 1997 (CH, F, Nth, Den, USA)

1990 1997

Switzerland 79.6 81.5 France 66. 67.1 Netherlands 66.2 71.5 Denmark 82.4 79.8 USA 76.5 77.4 source: OCDE, Employment outlook, 1998

Table 2: Labour force participation : Men/women (CH, F, Nth, Den)

Men Women Switzerland 89.7 72.2 France 75.5 62.2 Netherlands 82.6 64.4 Denmark 85.0 76.1 Source : Eurostat, Labour force survey, 1999.

If we take into consideration the differentiation of the employment rate by age, Switzerland again exhibits a positive picture. Table 3: Employment by age (CH, F, Nth, Den) men 15-24 25-49 50-64 Switzerland 68.5 97.5 86.2 France 39.8 95.3 57.5 Netherlands 67.4 94.3 66.1 Denmark 76.7 93.3 73.7 Source : Eurostat, 1999.

This extraordinary performance hides the fact that the situation is partially due to an increase in part-time jobs. However, if the rate of part-time jobs is high for women, it is low for men. Table 4: part time employment ((CH, F, Nth, Den, USA) Part time Men Women Switzerland 10.3 53.5 France 5.4 31.0 Netherlands 19.3 70.6 Denmark 10.0 35.2 USA 7.9 18.2 Source : Eurostat, 1999.

From this point of view, Switzerland exhibits a trend similar to the Netherlands, but to a lesser extent. Another common feature is the growth of people receiving benefits, that mean that the real rate of unemployment might be higher than commonly supposed. Table 5: Disability, cash benefits, disability, occupational injury, sickness cash benefits expenditures as % of GDP 1997 Disability cash benefits Disability, occupational

injury, sickness Switzerland 1.40 3.20 France 0.96 1.65 Netherlands 3.57 4.62 Denmark 1.82 2.68 USA 0.93 1.30 Source: OECD, social expenditure database, 1999. Moreover, during the early and mid-1990s, disability pensions were used as a less divisive way of dealing with the unemployment of older workers in declining traditional industries (such as textiles, watches, and precision instruments). The number of disability pensioners increased by 37% between 1990 and 1998, while that of recipients of the old age pension benefit rose only 18 %. Although the growing use of disability pensions weakens the finances of the pension system, the financial cost would be much smaller from an overall public perspective if unemployment benefit were to be paid. Moreover, special care is always required to discourage abuse and to prevent employable workers from taking the easy way out. Table 6: Number of

people receiving a disability pension

Years Disability pensions :

total Supplementary pensions : total

Both

1960 25609 9674 35283 1980 123322 79706 203028 1985 144582 89841 234423 1990 164329 93556 257885 1995 199265 114111 313376 2001 241952 160877 402829 Source : Office Fédéral de la Statistique (Statistical Federal Office), Annuaire statistique de la Suisse, Bern, 2002. Furthermore, it is possible to assume that the 1995 changes in the unemployment benefit system (entitlement criteria, level and maximum duration of benefits, active measures, sanctions…) has to effect to reduce the number of unemployed people and to raise the number of discouraged workers).

In conclusion, even if we take into consideration the “ hidden unemployment ”, Switzerland displays an impressive picture : a high rate of employment, a high rate of female employment, a high rate of young and older workers employment. From that point of view, every interpretation of the Swiss labour performance has to cope with three issues: first to explain the performances on the long run, secondly to interpret its recent erratic accomplishments and the final ( ?) miracle of the last years. II : Structural factors Three main structural factors are generally highlighted to account of the Swiss economic success : liberal corporatism, a coordinated economy, and a weak welfare state. 21. Liberal corporatism. Switzerland is presented by Katzenstein (1985) as the paradigmatic case of "liberal democratic corporatism". In this model, the state has to set only very general rules but not to intervene actively in the economic process. The economic area is dominated by employers' associations and the unions even if the unionization rate is rather low (25%). The corporatists arrangements are the functional effects of the position of the country in the international economy. Having accepted the imperative of successful competition in open world markets, the actors are pushed to find a national consensus which facilitates the handling of international change. By contrast with social democratic corporatists countries which counter the effects of external dependance by expanding social policies and social spending. During decades, Switzerland, as a liberal-corporatist country, does not offer social welfare in compensation for the costs of adaptation to international competition, but has rather relies on private spendings (high wages), regional development and educational (technical) policies and spending. Corporatist arrangements between trade-unions and employers associations (Katzenstein, 1984, 1985) guarantee a continuing process of adaptation to economic changes, and few strikes.. Another feature of the swiss system of industrial relations is what is called the “ social peace convention ”. The mechanism for settling conflicts is the heart of the Convention of 1937. Currently, the absolute obligation to maintain “industrial peace” is set out in most Collective Agreements: “It forbids all acts which are detrimental to the partner, whatever the purpose of the restriction. In particular the signatory to the agreement must not inflict any damage on his partner in order to force the latter to behave in a particular way in relation to matters not governed by the agreement. He also must not inflict any damage on his partner to force a third party to behave in a particular way (strike, lock-out). The court of arbitration rules in the last instance. However, it is rarely used. In most cases conflicts are resolved at the first level by negotiators between the works council and the management. If no solution to the conflict results from this, it is submitted to the social partners (associations). If they do not reach agreement, they bring a case before the court of arbitration.. This court first draws up a conciliation proposal. If this is refused by one or other of the parties, the court then settles the conflict in the final instance. Although the State has developed employment law and a number of protective measures in relation to social insurance, the gradual conciliation procedure has been so effective that since 1937 more than three-quarters of industrial disputes have been settled within the company

context through direct negotiations between the interested parties. Those cases which have had to be brought before the bodies representing the interest groups have been rare and the conciliation bodies have hardly ever been consulted. For this reason, the number of strikes in Switzerland is very low. The State does not intervene in industrial relations. The social partners themselves, establish collective conventions. They can be negotiated at the national, regional or local level by the competent professional organisations and every enterprise is invited to conform its practice to their prescriptions. Such a system privileges the negotiation between the social partners and every partner respects the terms of the agreement (according to the Convention of Work Peace of 1937). Negotiations determine working conditions, periods of notice, modalities of notice, working hours, salary and holidays. When economic conditions change, new negotiations have to take place. In case of disputes, a referee's court with parity composition has to be consulted. 54% out of 3,5 million salaried are concerned by this global work agreement, for 18% of them the agreement is of obligatory nature. The clause of price increase is included almost in all collective wage agreements, salaries should therefore regularly be adjusted to take into account any increase of the national index of consumption prices. Some companies propose their own agreement and this accounted in 1992 for 11% of the wage earners in the private economy sector. The legislative stipulations governing fixed-term contracts of employment are more flexible than those in most developed countries, apart from those in the USA and the United Kingdom (BIT, 1999, p. 37). The use of Interim’work has few legal limitations. It is possible to concluded fixed-term contracts of employment (CDDs) for any duration, while in most countries in the European Union a fixed-term contract cannot extend beyond a period of time ranging from 18 months to three years. Similarly, while the legislation in many EU countries imposes limitations on the renewal of such contracts, it is possible in Switzerland to conclude successive CDDs as often as the employer and the worker wish. Until the 1990s collective agreements are usually valid for all workers in the same professional sector in the same region. There is no performance-related pay or pay linked to company profits. It does not exist a national minimum wage and it is relatively easy to fire and hire workers. During the economic recession of the 1990s, wage moderation has been the main principale of negociations. By consequence, from 1996 to 1999, the real wage has declined (OFS, 2001) Table 7 : Switzerland : Real wages (1996-2000). Real

wages from 1996 to 2000

1996 1997 1998 1999 2000 Switzerland

0.5 0.0 0.6 -0.5 -0.3

Source, Office Fédéral de la Statistique (Statistical Federal Office), Annuaire statistique de la Suisse, Bern, 2002.2001 22. A coordinated market economy : At the economic level, Switzerland can be considered as a case of what Soskice (1999) calls a "coordinated market economy regime" - in contrast with "uncoordinated market economies

model" dominant in the Anglo-American countries. The level of cooperation between bank and industry on the one hand and employers and unions on the other hand is high. The coordination between the four main " economic" systems -: the financial system, the industrial relation system, the intercompany system and the education and training system, is strong. The degree of coordination between firms of the same sector is high (Soskice, 1999). The institutional framework tends to encourage cooperation at all levels and between social actors. Switzerland is an example of an industry-coordinated economy. It produces diversified quality export products, which depend on skilled and experienced employees on whom responsability can be devolved (Kappel and Landmann, 1997). The production regime is largely based on the dual system of education and the existence of the apprenticeship system -based on practical knowledge combined with theoretical education in a specific technical teaching establishment-. The dual system works on a corporatist basis of consensus-building between the concerned professional groups and teaching institutions. Federalism leaves a large margin for Cantons and the economy - the professional organisations. The Federal influence is limited to two roles : it sets quality standards and subsidizes the vocational schools. The legal frame is set by the federal level, but implementation is largely left to cantons. Enterprises are forced to respect guide-lines in technical teaching. Thus, the regulation of professions leads to a sound education adaptable to regional economic disparities and cantonal differences. The strong apprenticeship system is considered to ensure a steady supply of young, skilled and highly productive labour. Table 8: Switzerland : education level and kind by age 25-34 years 35-44 45-54 55-64 65 years and + Education level by age % % % % % Total primary school (mandatory) 12,4 16,2 21,4 29,3 42,2 Secondary degree (vocational) 52,8 48,1 49,6 47,3 41,9 Secondary degree (general ) 9,2 7,2 7,2 5,1 4,4 Tertiary degree (vocational) 9,7 11,4 8,4 7,4 4,4 Tertiary degree (university) 15,9 17,2 13,4 10,9 7,1 source: Office Fédéral de la Statistique (Statistical Federal Office), Annuaire statistique de la Suisse, Bern, 2002. One of the result is that unemployment among young people never reached the level of EU countries : Table 9 : Young people unemployment’rate in Switzerland. 1992 1993 1994 1995 1996 1997 1998 1999 2000 15-24 ans 3,0 4,9 4,7 3,9 4,3 4,7 3,3 2,2 1,5 source: Office Fédéral de la Statistique (Statistical Federal Office), Annuaire statistique de la Suisse, Bern, 2002.

Switzerland has followed a niche strategy. It is a producer and an exporter specialising in both some products and services: the machines industry, the chemistry industry, the watch-making industry, finance, insurance and tourism. Switzerland is not only an industrial country. It is also, and has been for a long time, a service economy. In 1965, the sector of service (especially banking and insurance companies) represented 40% of the whole economic sector, today it represents 70.5%. In the industrial sector, importations and exportations are nearly equal, but, the balance of services is positive. The high level of specialisation produced comparative economic advantages. The level of inflation is very low, and Switzerland is able to export manufacturing products and services to European and worlds markets. Nevertheless, this picture represents a partial view of Swiss economy. Alongside an externally oriented and competitive sector, its exists a large internally oriented and protected sector. For decades, agriculture and some industrial sector producing for the national market were subsidised and sheltered from international competition by private and public arrangements: cartels, price maintenance, and monopolies (Sciarini, 1994, Mach, 1997). This explains why the price of goods produced for the internal market is very high, but also why over a long period of time workers, in these sectors, were protected from external competition. But, to-day the new rules of the economic international order impose an profound openess of the Swiss economy. The openness of the Swiss economy has some inevitable consequences on the economic and social structure of the country. Switzerland is subject to keen international competition. It means that it is very sensible to the demand of its foreign partners : Europe which represents nearly 80% of its exportations (specially Germany). Table 10 : Destination of exportations. Sw :Exports to % (in 1999) EU 79.7 Germany 32.5 France 12.5 Italy 10.2 Netherlands 5.2 UK 4.4 USA 6.1 Japan 3.0 Source : La Vie économique, 9/2001, p 66. The great flexibility in the level and structure of real wages is one of the mean use to cope with growing international competition. 23. A weak but expanding welfare state : Here key features are a low rate of fiscal and social expenditures. The total amount of tax and social security contributions in proportion to GNP has increased rapidly in the 1970s, to slow down in the 1980s, with a new increase in the first half of the 1990s. The increased is mainly due to social security taxes. Despite this progression, Switzerland still represents one of the OECD

countries where the fiscal pressure is the lowest. In 1992, only the United States (29.4%) and Japan (29.4%) have a lower tax level then Switzerland (32%). The average for OECD countries amounted to 38.8%, while some other small countries like the Netherlands (46.9%) and Denmark (49.3%) have a much higher tax level. Therefore, Switzerland can be classified in the group of the liberal states with low fiscal pressure like New Zealand (35.9%) and the UK (35.2%) It should be noted that, being a federal state, 2/3 of public expenses are done at the cantonal and local level. Figure 11: Taxes and social security contributions as a percentage of GDP.(OCDE, 1999). 1970 1980 1990 1997 USA 27.4 26.9 26.7 28.5 Australia 24.2 28.4 30.6 30.4 Switzerland 22.5 29.1 30.9 34.6 UK 37.0 35.2 36.6 35.3 New-Zealand 27.4 33.0 38.0 36.4 Germany 32.9 38.2 36.7 37.5 Netherlands 37.1 45.2 44.6 43.4 Austria 34.9 40.3 41.0 44.4 Italy 26.1 30.4 39.2 45.0 France 35.1 41.7 43.7 46.1 Belgium 35.7 43.7 44.0 46.5 Denmark 40.4 45.5 48.7 52.2 Sweden 39.8 48.8 55.6 53.3 OECD, Revenue statistics, 1999. The first attempts to create a Swiss welfare state was designed, as in Germany, to cope with the "Arbeiter Frage". The introduction of social insurance by Bismarck in the 1880s was widely seen as an example to be followed (Gilliand, 1990). But ruling elites and parties were not able to introduce important welfare reform on the German model. The overall impact of referendums and consensual politics on the development of social insurance was to limit the scope of programs that had already been agreed upon by Parliament and to the implementation of minimal schemes by European standards (Immergut 1992). On one hand, confessional, liberal and conservative parties are the main political forces which creates the the Swisss "welfare state". For this reason, its features have a Christian Democratic flavor (van Kersbergen, 1995) and can be said to be part of the corporatist-conservative model On the other hand, for institutional reasons, it is a welfare laggard in comparison with other continental welfare-states (Gilliand,1990, 1997; Bonoli, 1997). Until the end of the 80's Switzerland were amongst the OECD countries with the lowest public social expenditures. Nevertheless, this picture is changing. While social expenditures amounted to 8% in the 60's and around 13-14% in the 70's and 80's, it has increased to 20% at the beginning of 1990 and up to 28% of the GDP in 1998. The three main social insurance programmes run by the Federal government: health insurance, the basic pension insurance scheme and unemployment insurance have all been implemented or developped in recent years.

Table 12: Social expenditures in percentage of GDP (international comparison). CH DEU FRA ITA NLD AUT GBR DNK SWE NOR PRT GRC 1990 19,9 25,4 27,9 24,7 32,5 26,7 23,0 28,7 33,1 26,3 15,2 22,9 1994 25,2 28,3 30,5 26,0 31,0 29,8 28,8 32,9 37,2 27,8 20,8 22,0 1997 28,0 29,5 30,8 25,5 29,4 28,8 27,7 30,4 33,6 25,6 21,6 23,3 1999 28,1 28,6 30,3 25,3 28,1 28,6 26,9 29,4 32,9 27,9 22,9 25,5

Source : Eurostat and OFES, Annuaire statistique de la Suisse, 2002. Starting in 1990, social expenditures in Switzerland started to rise very rapidly in a time when it declines or stagnates in other OECD countries. It is now identical to the average social expenditures in the UE. While there was, for example, a important difference in 1990 between the Netherlands (32.5%) and Switzerland (a little less than 20%), in 2000, the two countries have the same level of public social expenditure. The result is that Switzerland which has been typically classified as a liberal Welfare-state (Esping-Andersen, 1990) is now part of the « conservative-corporatist » model. In its case, globalisation did not drive to more no-liberal-oriented policies but on the contrary to social protection policies, giving weight to the Garett’thesis (Garrett, 1998). For some policymakers, experts, and commentators (Lane, 1999), this factor explains the deterioration of the Swiss labour market. But it cannot explain the rapid decrease of unemployment from 1998 to 2001. 2.4. « Pluck » in switzerland ?? For many analysts, it is no more possible to avoid a jobs-equality-trade off (Iversen, Wren, 1998). Governments face a trilemma. It is no more possible to combine earnings equality, full employment and a balance budget. As a result, government have two choices: the “regulatory” policy option or the market policy option. The liberal policy choice is to let markets operate. It drives to a society with full employment but large earning inequalities. If they choose the other options, gouvernments will have to expand public sector employment and as a consequence generate large public deficits or to face the “Welfare without Work” trajectory (Esping-Andersen, 1996). Most economist textbooks present the market option has the only viable on the long term. As to be able to create employment, countries should have a large flexibility of the labour market (low degree of employment protection, large wage flexibility, low generosity of unemployment insurance etc.) a weak welfare state, low taxation and a deregulated economy. Many sociologists and political scientists believe that it is possible to highlight some institutional configurations (welfare regimes, employment regimes), some of them being more efficient than others (Esping-Andersen, 1996, 1999; Scharpf and Schmidt 2000…). The Continental model (and its southern deviation) way are considered to be the less able to cope with economic pressures and to drive necessarily to labour markets problems and budget deficits. High taxes on labor depressed labour demand and increased unemployment. In turn, a contraction of the active labor force narrowed the labor tax base and forced governments to raise taxes even further reinforcing the spiral of welfare without work. The scandinavian way based on high public employment but a relatively employment-tax structure appears to be relatively robust against the

new economic pressures (Shaprf, Schmidt, 2000, 89). The flexibility of the labor market in the anglo-saxon model drive to full employment but is detremental to equality. In a way, that was the alternative faced by Switzerland. In the 1990’s, neo-liberal ideas, which were hardly received in Swiss elites circles, spread very rapidly in the economists' networks, the high ranking officials circles, the employers networks, and the parties of the right. OCDE reports, notably the 1992 report, as well as other experts reports exerted a strong influence on elites circles. Most of the economists, political, economic and officials agree on the idea of implementing a more deregulated market, suppressing cartels and others obstacles to economic competition, following strict monetarist policies, limiting public deficit and the growth of the welfare state. On one hand, employers associations and right wing parties call for a policy of welfare reorientation and retrenchment, but also for more flexibility on the labour market, and pleade against the development of unemployment insurance. On the other hand another part of the elites, influenced by christian democrats ideas or members of the conservative radical party, defend the idea of a Swiss "social model": high wages, high regulation of the labour market and the development of social pacts between unions and associations of employers. In addition, aslike in other countries of the EU, trade unions, the socialists and the green parties, churches advocate a stronger welfare state, a better social protection of the workers, better unemployment benefits and a more generous poverty policy. Furthermore, as Switzerland is a federalist and "consensus democracy" it is very difficult to implement radical policy changes (Kriesi, 1995, Papadopoulos, 1997). The most remarkable feature of consensual politics is arguably the composition of the Federal government. The four main parties (Catholic Conservative Party (eg the Christian Democratic Party), the Swiss people party (formerly the Farmers' Party), the Radical Democratic Party, the Socialist Party) together ruled the country, sharing ministerial posts and administrative departments between them. Government policies thus tend to be moderate in order to be acceptable to all coalition partners. The evolution towards an "uncoordinated market economy" would mean an economic revolution: wage bargaining, competition among firms and workers, dispersions of wages...It would be a complete transformation not only of the welfare state, or of the sheltered economic sector but of the economic system as a whole. Even if they agree with the neo-liberal ideas at the level of ideology, and if they wish more autonomy in the fixation of working conditions, employers have few incentives to change an economic and social system which prove to be very productive and efficient even in time of economic troubles. This limits the evolution towards a deregulated market system. In addition, for historical reasons, even right parties such as Christian democrats and the Radical party are opposed to an evolution towards an US style of society. The deregulation has not influenced the core of the coordinated economic model: in most economic sectors, the coordination among industries is still prevalent not competition, industrial relations have remained well established, the vocational system has not been profoundly change or in a path dependent way. The questions in Switzerland were how to change the working conditions to face the intensification of competition in the world markets without ruining the system of industrial relation, how to implement new measures to combat against unemployment and finally how to limit social exclusion. From this perspective, the Swiss case gives support to the « compensation hypothesis » drawn by Geofrey Garrett (1998) which is that globalization do not induce governments to roll back social expenditures, but gives them incentives to respond to political demands for protection against risks.

The unemployment policies of the mid 90s are first characterised by the attempt to cope seriously with the problem of unemployment and social security problems by improving social policies. On one hand, we can define these measures as progressive measures. They include more money for the unemployed, the poor, the sick and the families. On the other hand, the architecture of the reform show the strong influence of new ideas and practices diffused by the experts. Some issues such as savings, to avoid moral hazard and to introduce active measures are some topics of the Swiss reforms, but at the same time the duration for the unemployment benefits is enlarged and the access to social assistance is made easier (Merrien, 2002a). Whatever, in the 1990s, Switzerland should be considered as part of the continental model of welfare. A look at the inequality earning rates as well as to poverty rates confirm this interpetation. 2.5. Earning inequalities and poverty rates. In the last three decades, OECD countries have seen large increase in both economic inequality and poverty. These trends are seen as the unavoidable consequences of social changes and economic globalisation. Others have argued that raising earning inequalities are good for growth. Figure 2. Inequality rates (International comparisons) Source : Luxembourg Income study, 2002 (Australia, 1994. Austria, 1995. Belgium, 1992, Canada, 1994, Denmark, 1995, France, 1994, Germany, 1994, Italy, 1995, Netherlands, 1994, Norway, 1995, Spain, 1990, Switzerland, 1992, UK, 1995, USA, 1994). The ratio of the income of a household at the 10th percentile and a household at the 90th percentile to median income gives some indication of how far below or above the middle of the distribution the poor and the rich are located on the continuum of income. A low-income swiss citizen (at the 10th percentile in 1992) has an income that is only 52% of median income whereas a high-income Swiss citizen has an income that is 188% of the median. The ratio betwen the incomes of those at the 90th and the 10th percentile (90/10)give the size of the gap between the richest and the poorest in a country. In Switzerland, the income of the high-income swiss citizens is three and a half times ( 3.62) the income of the low-income Swiss people, after being ajusted for taxes, transfers and family size. The number are not very different in France (3.54), a little less in the Netherlands (3.15) and Denmark (3.18). By comparison, it is nearly six times in the USA (5.85). In Switzerland, the poor is less poor than in the United-States of America, but the rich is also less rich. The poorest are not much more disavantaged than in Denmark. Looking at poverty rates (defined as persons below 50% of median income) gives a similar picture. Figure 3. Poverty rates (International comparisons). Source : Luxembourg Income study, 2002 (Australia, 1994. Austria, 1995. Belgium, 1992, Canada, 1994, Denmark, 1995, France, 1994, Germany, 1994, Italy, 1995, Netherlands, 1994,

Norway, 1995, Spain, 1990, Switzerland, 1992, UK, 1995, USA, 1994). The general rate of pèoverty is rather low, a little more than in Germany, France or the Netherlands, but equal to the danish rate and considerably lower than in the USA, the UK or Australia. Child poverty is lower than in Germany and more than two times lowe than in the USA. On the other hand, 8.4 % of elderly persons are below the poverty line that is rather high, but three times and a half lower than in Australia. Switzerland takes place not in the liberal cluster (USA, UK, Australia), nor in the social-christian-democrat cluster (nordic countries, plus the Netherlands), but in the continental cluster (Germany, Belgium, France). III. A new era for the Swiss labor market ? It is obvious that the Swiss labour market is much more sensible to the economic cycle than in the past. Many factors have been used to explain the bad performances of the Swiss economy during most of the 1990s. Among them four factors are of importance. The first one is a monetarist policy pursue to fight inflation which produce high interest rates which discouraged productive investments and the growing strength of the Swiss franc relatively to the DM and other european currencies (+15% between 1993 and 1995) which in turn penalize exportations and tourism. The second is the consequence of low growth in countries which are the principal customers of Swiss product (Germany, EU). A context of low economic growth is a dramatic change for a country bent on growth strategies. The third factors is the crisis in the sector of building following a wave of speculation in the real estate sector. The fourth is the effect of the restriction of public deficits by the Federal and Cantonal which produced a limitation of public consumption. Neverthelesss, they can’t explain the whole situation. What is the most striking fact in Swiss economy life is the growing effect of growth on unemployment. If we look more precisely at the figures, we see clearly a change in the relationship between growth and employment. In the 1970s and at the beginning of the 1980s, an economic recesssion had nearly zero effect on the level of unemployment. By contrast, in the 1990s, employment is very sensitive to the rate of growth. Table 14: Switzerland: Growth and Unemployment. Indeed, Switzerland was hit harder by the world recession in the mid 1970s than any other European countries (Danthine and Lambelet, 1987). The effect was a sharp drop in employment. Switzerland lost 330’000 jobs from 1974 to 1976, almost 10 per cent of the labour force. But the unemployment rate did not grew because labour force participation contracted at the same time: 305’000 workers withdrew from the markets. Employed recovered strongly during the next four years: a total of 125’000 new jobs were created. The same phenomena occurred during the 1981-1983 recession and the 1984-1991 recovery. Between 1981 and 1983, 65’000 workers lost their jobs, but 40’000 workers (50% of them being foreign workers) withdrew from the labour market and the unemployment remained low. The following recovery produced a strong job growth with over 238’000 new jobs and an unemployment rate under 1%. By opposition, during the economic recession of the 1990s, the

contraction of the labour force was weak and the number of unemployed persons grew very rapidly..From the beginning of the 1990s, Swiss authorities, policians and analysts have been obsessed by the idea that the rapid growth of unemployment might mean the end of the Swiss exceptionnalism. In fact 1997 with a negative growth and growing unemployment, the 1990-1997 period was really tough, but in 1998 economic growth was back and the unemployment rate went down significantly. If we compare to the unemployment surge in Belgium, Finland, France, Germany and Italy at the beginning of the 1990s, the unemployment rate increase in Switzerland was really small. To explain these evolutions, we must take into account three factors: the first one is the particularities of the Swiss migration policy, the second one is the absence or limitation of unemployment insurance, the third one is the changes of the women’s behavior on the labor market, and the changing behavior of employers. 1° The use of strict migration policy is a well established feature of Swiss policies to control the labour market (Bonvin, 1996, Flückiger, 1998; Merrien, 2000). We must remind that, from the mid-1960th, foreign workers represent between 20% and 25% of the work force. When economy needs workers, the quota of work-permits is increased. On the contrary when a recession occurs, annual, seasonal workers and cross-boarders workers have not more rights to work in Switzerland. The government is able to limit the number of annual permit relatively to the employment situation. Table 15 : Recession and employment declines in Switzerland, in thousands Recession 1975-1976 Recession 1982-1983 Recession 1992-1993 Labour force -225.5 14.2 42.5 Non permanent - of which annual

-181.9 -88.4 -20.7 -4.0 -46.7 6.2

- of which seasonal -71.1 -12.2 -32.4 - of which frontier -22.5 -4.4 -20.5 Permanent - of which Swiss nationals

-43.6 -64.4 34.9 25.7 89.2 63.9

- of which foreigners 20.8 9.2 25.3 Unemployment 19.2 14.6 125.0 Employment -244.7 -0.3 -82.5 Source: OECD, Labour Force Statistics, 1996. For decades, full employment was largely based on a capacity to adjust the supply of labour downwards by pushing thousands of migrant workers out of the country. During the 1975-76 recession, the employment variation was compensated mainly by the reduction of the non-permanent foreign labour force, in particular by the workers holding annual permits: 305’000 workers withdrew from the markets. 245 000 were foreign workers, 90% of the others were women. In other words, the Swiss government was able to push a large part of the working population across its borders. But due to new policies implemented in the 1970s, this option is less open. The government decided to raise the level of permanent work permits. Due to this new policy, the proportion of permanent workers increased in the long term. In the 70s, only 21% of workers had permanent permits. In the 90s, the figure is 58%. These foreign workers can no longer be legally pushed out.

Table 16. Foreign workers in Switzerland. Permanent Annual Seasonal Cross-boarder workers 1975 21% 52.1 18.6 9 1993 57.6% 18.1 7.6 16.7 sources: O F S, Annuaire Statistique de la Suisse. But, it is still possible to limit the entry of annual, seasonal and cross-boarder workers.From 1991 to 2000, the number of active foreign people diminished by 8.8% (-13.6% if we count only men). However, restrictive migration policies are a relatively less efficient buffer. One inentended effect is that for structural reasons immigrant workers have a much greater likelihood than Swiss workers of encountering unemployment. Table 17: level of unemployment in Switzerland (Swiss, foreign workers). 1992 1993 1994 1995 1996 1997 1998 1999 2000

Swiss workers 2,0 3,5 3,7 3,2 3,3 3,6 2,6 1,8 1,4 Foreign workers 4,5 7,8 8,4 8,0 9,3 10,7 8,1 5,8 4,1

Source: OFES. Annuaire statisdique de la Suisse, 2002. 2° The change in the behaviour of the actors involved is the second factor likely to account for the increase in unemployment during the 1990s. In descriptive terms, the characteristics of the unemployment during the 1990s were different from those of the unemployment during the 1970s (Flückiger, 2000). Hence, during the period from 1974 to 1979, every 1% of shrinkage in GDP gave rise to a contraction in employment of 0.9%. In other words enterprises delayed their adjustment to the recession in the economy and temporarily accepted a situation where they were working with overcapacity. The immediate effect was a relative fall in the productivity of Swiss industry throughout this period. Conversely, between 1991 and 1995, stagnating growth gave rise to a fall in employment of almost 6%. Under these conditions it is hardly surprising that an increase in the productivity of labour was seen during the first half of the 1990s. Flexibility policies were seen more and more frequently within enterprises: more frequent use of redundancies, greater versatility required from workers, structuring of working hours, use of part-time work, use of temporary agency labour, outsourcing. If this phenomenon of lower investment by Swiss enterprises in continuing training as compared with previous decades, reduced use of partial unemployment and more frequent use of redundancies is considered, it is possible to arrive at the hypothesis that a number of Swiss enterprises have now adapted the typical behaviour of enterprises within the liberal productive regime. In the recent period, employees themselves have changed their behaviour. While during the two recent recessions (1975-1976 and 1982-1983) voluntary withdrawals were seen among a part of the labour force - women in particular - from the labour market, no equivalent phenomenon has been seen in the recent period.

The participation rate to the labour market did not decrease in the 90s, on the contrary for some groups, for example women, it increased. 3° Another factor is the implementation of the unemployment insurance law. Until 1977, unemployment insurance was not compulsory and few workers were affilated to unemployment insurance funds. It pushes some workers, mainly women to quit the labour market. The economic crisis in the mid-seventies changed the views of the legislator and pushed them to modernize the Swiss legislation. The legislative process to make the affiliation compulsory was initiated. The principle of obligatory affiliation was introduced in the constitution in 1977 and the Federal Law on the compulsory unemployment insurance (LACI) was enacted in 1982 coming into effect in 1984. These law prescribes that: -the funds were financed by contibutions from the employers and the employees (0,8 % of the payroll equally distributed between both); -they were administered by the cantons; -The benefits granted amount to 70% of the last salary for childless unemployed and 80 % for those with dependent children; -The maximal duration was 85 working days for childless unemployed and 250 for the others which, at that time, was not very generous looked at an international perspective; -The funds employees examine if the unemployed actually fulfils the legal conditions (relating mainly to the length of the contribution period) to receive the benefits; In 1995, the Federal Council adopted several Federal Urgent Decrees (AFU) aiming at a quick adaptation of the legislative provisions for unemployment. The maximum duration of the entitlement to benefits was progressively reduced to 400 working days. The notion of suitable work appears in the law and the unemployed has to accept any job with a salary amounting to at least 70 % of the last wage. The contributions were also modified and passed to 3 % of the payroll, equally distributed between the employer and the worker. During the same period, the behavior of the unemployed completely changed. Employees who has lost their jobs now register in large numbers with the unemployment offices. A number of explanations can be offered for this behaviour. The first simply refers to the generalisation of unemployment insurance and its “becoming acceptable”. The second refers to a change in mentalities and the trivialisation of unemployed status in a country founded on the work ethic. The third reason, which does not contradict the first two, is that the gradual increase in the number of unemployed people makes it a more trivial thing to register as unemployed.

Back to full-employment: 1998-200? Starting from 1998, unemployment clearly started to decrease taking the official unemployment rate from 5,2% in 1997 (yearly average) to 1,7% in september 2001. The evolution of the economical variables is certainly at the base of the revival of the labour market and of the consequent diminution of unemployment. The main reason of this evolution is due to Swiss ability to create jobs in period of economic growth. The engine of this employment creation is the tertiary sector, which manages to reabsorb the stagnation -and sometimes the recession- of the secondary sector. The creation of full-time jobs seems to be important in the re-absorption of unemployment, especially because the activity rate hasn't decreased significantly. From 1997 to 2001, the economic growth is back. All indicators confirm this trend: growth of the exportations, growth of the investments, growth of the internal demand, etc. But after, the 2001 september shock, the anticipations are optimistic. A recent report from the Ministry of Economy

(2002) highlights the fact that the productivity rate in Switzerland is rather low in international comparison and is declining. On the long term, it means that Switzerland could be unable to create a sustainable growth and to maintain a low level of unemployment. Conclusion : As the other cases discussed here, the Swiss case also raises questions about the relationship between globalisation, employment and policy reforms. For a long time, Switzerland was given as a successful exemple of an export-oriented development (Katzenstein, 1985). Its performance were partly the result of « luck » (being neutral during the war, the cold war) and « stuck » (liberal corporatism, the dual system of education, the banking system, the large part of the economic protected sector) and also to « pluck » (the capacity to manipulate the supply of foreign work). Part of these factors are still working. The institutions are still on good shape (political institutions, labour relations, education). The new social policies reinforce social cohesion and the capacity to face economic insecurity. In that sense, they could be a positive factor in a context of harder economic competition. On the other hand, it is no more possible to use migration policy has the majour labour policy. Employment is much more directly sensitive to economic growth. Economic growth is much more sensible to the international context than in the past. The steady deceleration of GDP growth apparent from mid-1990 was largely the result of an unfavourable combination of negative factors, including the after-effects of the economic crises in the emerging markets and Russia, and the spill-over effect these had on western Europe, notably Germany. By contrast, at he end of the 1990s, Switzerland benefited mainly of the European, American and Asian economic recoveries. Luck might not be here. An economic slowdown in the USA and Europe should have devastating effect. Morevorer, the Swiss’international competitivity is very dependant on the exchange rate of the Swiss franc vis-à-vis the Euro and the dollar. If the Swiss franc appreciates too strongly against these currencies, Switzerland's competitive position vis-à-vis its European neighbours could be compromised. Or, a sharp downturn in the US economy could lead to a steep appreciation of the Swiss franc, damaging the price competitiveness of Swiss exports, choking off export growth and adversely affecting business sentiment. The degree to which policymakers can remedy to these issues are rather limited.

References Barbier J-C et Gautié G (ed), 1999, Les politiques de l'emploi en Europe et aux Etats-Unis, Paris: P.U.F Becker U, 2000, “ Welfare State Development and Employment in the Netherlands in Comparative Perspective ”, Journal of European Social Policy 10 (3): 219-239. Bois S, Greber P-Y, eds,(1982), Emploi et politiques sociales, Lausanne: Réalités Sociales, Bonoli G, (1997) Social insurance in Switzerland, in Clasen J, Social Insurance in Europe, Bristol, The Policy Press. Bonoli G, Mach A, 2000, “ Switzerland : Adjustment policies within institutional constraints ”, in Scharpf, Schmidt, p 131-173. Bonvin J-M, (1996) "Les réponses suisses aux phénomènes migratoires" in L'Année sociologique, 1996, 46, 442-473. Castles F (ed),(1993) Families of Nations. Pattern of Public Policy in Western Democracies, Aldershot, Dartmouth. Castles F, 1998, Comparative public policies : patterns of post-war transformation, Cheltenham : Edward Elgar. Esping-Andersen G. (ed), (1996). Welfare States in Transition, London, Sage. Esping-Andersen G., (1990) The Three Worlds of Welfare Capitalism, Harvard, Harvard University Press. Eurostat, Labour force survey, 1999. Flückiger Y, (1996) "Analyse socio-économique des différences cantonales de chômage", in Forum Helveticum, ed, Le chômage en Suisse: bilan et perspectives, Lenzbourg. Flückiger Y, 1998, “ The labour market in Switzerland : the end of a special case ?”, International Journal of Manpower ”, vol 19, n°6. Fragnière Jean-Pierre et Greber Yves, eds,1997, La sécurité sociale en Europe et en Suisse, Lausanne, Ed Réalités sociales. Gallie D and Paugam S, 2000, eds, Welfare regimes and the experience of unemployment tin Europe, Oxford, Oxford University Press. Garrett G, 1998, Partisan politica in the global economy, Cambridge, Cambridge university press. Gilbert N, van Voorhis R, ed, 2001, Activating the unemployed, New Brunswick : Transaction publishers Gilliand P (ed), (1990) Pauvreté et sécurité sociale, Lausanne, Réalités Sociales. Gilliand P, Rossini S,(1997) La protection sociale en Suisse, Lausanne, Réalités Sociales. Gough I, Bradshaw J, Ditch J, Eardly T, Whiteford P, (1997), "Social assistance in OECD countries", Journal of European Social Policy, february, p 17-43 ; Hanhart S, Bossio S, 1998, “ Costs and benefits of dual apprenticeship : lessons from the Swiss system ”, International labour review, 137 (4) : 483-500. Hugger P, 1992, Les Suisses. Modes de vie, traditions, mentalités, Lausanne, Payot. I.L.O., 1999, Switzerland. Studies on the social dimension of globalization, Geneva : ILO. Immergut Ellen , (1992) Health Politics. Interests and Institutions in Western Europe, New York, Cambridge University Press. Iversen T and Wren A, 1998, “ Equality, employment, and budgetary restraint. The trilemma of the service economy ”, Worlds politics, 51, july, 507-46.

Iversen T, 1996, “ Power, flexibility, and the breakdown of centralized bargaining : Denmark and Sweden in comparative perspective ”, Comparative politics, July, 399-436. Iversen T, 1999, Contexted economic institutions. The politics of macroeconomics and wage bargaining in advanced democracies, Cambridge University Press. Jobert, B. ,dir., (1995), Le tournant néo-libéral en Europe, Paris, L'Harmattan. Kappel R. and Landmann O. (1997), La Suisse dans un monde en développement; Fribourg: Presses Universitaires. Katzenstein P (1985), Small States in World Markets. Industrial Policy in Europe, Ithaca-London, Cornell University Press. Katzenstein, P. (1984), Corporatism and Change. Austria, Switzerland, and the Politics of Industry, Ithaca: Cornell University Press. King D, 1995, Actively Seeking Work. The Politics of Unemployment and Welfare Policy in the United States and Great Britain, Chicago, The University of Chicago Press. Kitschelt H, Lange P, Marks G and Stephens J (eds), Continuity and change in contemporary capitalism, Cambridge University Press. Kriesi H, Longchamp C, Passy, Sciarini P (1993), "Analyse de la votation fédérale du 6 décembre 1992", Genève/Bern, Département de science politique,/Gfs Forschungsinstitut, n° 47. Kriesi, H. (1995), Le système politique suisse, Paris: Economica. Kuhnle S, ed, 2000, Survival of the European welfare state, London: Routledge. La Vie économique, 9/2001 Lalive d'Epinay Ch (1988), Le mythe du travail en Suisse, Genève: Georg. Lane J-E, “ The public/private sector distinction in Switzerland ”, ”, Swiss Political Science Review, vol 5, 2, summer, 94-104 Luxembourg Income study, 2002 Mach A [dir.], 1999, Globalisation, néo-libéralisme et politiques publiques dans la Suisse des années 1990, Zurich : Seismo. Merrien F-X , “ Fédéralisme et politiques sociales : le cas des Etats-Unis et de la Suisse ”, in Fédéralismes et régimes de protection sociale, Presses de l’université du Québec à Montréal, à paraître en 2002a. Merrien F-X “L’avenir des Etats-providence. Une lecture critique de la littérature récente”, Revue française de sociologie, Paris, 2002b, 2. Merrien F-X and Bonoli G , "Implementing Major Reforms of the Welfare-states. France and Switzerland compared. A New-institutionalist approach", in Kuhnle S (ed), Survival of the European Welfare-State, Routledge, London, p 128-145. Merrien F-X, , 2001, “ The emergence of active policy in Switzerland ”, in Neil Gilbert and Rebecca van Voorhis, eds, Activating the unemployed, New Brunswick: Transaction Publishers. Merrien F-X, 2000, "La restructuration des États-providence: "sentier de dépendance", ou tournant néo-libéral ? une interprétation néo-institutionaliste", Recherche sociologique, n°2, Louvain-la-Neuve, automne; p 29-44 Merrien F-X, 2000, L'Etat-providence, Paris, Presses Universitaires de France, (2è edition). Merrien F-X, Globalization and Social Adjustment: The Case of the Small Developed Countries. A Comparative View of New Zealand, Sweden and Switzerland, in Behrendt S and Sigg R, eds, Social security in a global world, New Brunswick: Transaction Publishers, forthcoming 2002. Morosoli C, Il mercato regionale del lavoro. Concetti teorici e applicazione al caso del Cantone Ticino, Bellinzona, Istituto Ricerche Economiche/Meta Editions, 1994, OCDE, 1997 et 1999, Suisse, OCDE: Etudes Economiques, Paris.

OECD, OECD Employment outlook, Paris, 1994 and 1995. OECD, Labour Forces Statistics, Paris, 1997 and 2001. OECD, Revenue statistics, 1999. OECD, social expenditure database, 1999. Office Fédéral de la Statistique (Statistical Federal Office), Annuaire statistique de la Suisse, Bern, 2002. Papadopoulos, Y. (1997), Les processus de décision fédéraux en Suisse, Paris, L'Harmattan. Pierson, P. (1995), "Fragmented Welfare-States: Federal Institutions and the Development of Social Policies" Governance, vol 8, n°4, october, 449-478. Queisser M, Vittas D, 2000, The Swiss multi-pillar system : triumph of common sense ?, World Bank : development research group. Rossi M., “Emploi, chômage et travailleurs frontaliers: évolution récente dans les régions frontalières de l’Europe occidentale”, Periodico dell’IRE, 3/1994. Scharpf F, Schmidt V, ed, 2000, Welfare and work in the open economy, Oxford University Press, 2 volumes . Schwartz H, 1994, "Small states in big trouble: State reorganization in Australia, Denmark, New Zealand, and Sweden in the 1980s", World Politics, july, 527-55. Schwartz H, 2001, « Round up the usual suspects ! Globalization, domestic politics and welfare state change2, in Paul Pierson, The new politics of the welfare state, Oxford, Oxford unversity press, p17-44. Sciarini P, (1994), Le système politique Suisse face à la Communauté européenne et au GATT: le cas test de la politique agricole, Genève: Georg. Sciarini P. and Listhaug O, (1997), "Single cases or a Unique Pair? The Swiss and Norwegian Not to Europe", Robert schuman Centre, EUI Working papers, RSC n° 97/25. Sheldon G, 1998, “Le chômage de longue durée en Suisse: diagnostic et thérapie”, La Vie économique, n. 8, pp. 45-51. Soskice D, 1999, "Divergent production regimes. Coordinated and uncordinated market economies in the 1980s and 1990s", in Kitschelt H, Lange P, Marks G and Stephens J (eds), Continuity and change in contemporary capitalism, Cambridge University Press. Swiss journal of economics and statistics, Special Issue, « The Swiss labour market in transition ”, vol 136 (3), 2000. Tabin J-P (1998), "Chômeur ancien, chômeur moderne: persistance des représentations?", Revue Suisse de Sociologie, vol 24, n°2, 209-236. Van Kersbergen K, (1995), Social capitalism. A study of Christian Democracy and the Welfare State, London and New York, Routledge.

Tables and figures Figure 1: Unemployment in Switzerland, the UE15, and the OECD zone (1974-2001). Figure 2. Inequality rates (International comparisons) Figure 3. Poverty rates (International comparisons). Table 1: Labour Force participation in 1990 and 1997 (CH, Fce, Nth, Den, USA) Table 2: Labour force participation : Men/women (CH, Fce, Nth, Den) Table 3: Employment by age (CH, Fce, Nth, Den) Table 4: Part time employment (CH, Fce, Nth, Den, USA) Table 5: Disability, cash benefits, disability, occupational injury, sickness cash benefits expenditures as % of GDP (CH, Fce, Nth, Den, USA) Table 6: Switzerland : number of people receiving a disability pension. Table 7 : Switzerland : Real wages (1996-2000). Table 8: Switzerland : education level and kind by age Table 9 : Young people unemployment’rate in Switzerland. Table 10 : destination of exportations Figure 11: Taxes and social security contributions as a percentage of GDP.(OCDE, 1999). Table 12: Social expenditures in percentage of GDP (international comparison). Figure 13: Switzerland: Growth and Unemployment. Table 14 : Recession and employment declines in Switzerland, in thousands Table 15. Foreign workers in Switzerland. Table 16: Unemployment (Swiss, Foreign workers).