The European social model is a concept that emerged in the discussion of economic globalization and typically contrasts the degree of employment regulation and social protection in European countries to conditions in the United States. It is commonly cited in policy debates in the European Union, including by representatives of both labour unions and employers, to connote broadly "the conviction that economic progress and social progress are inseparable" and that "[c]ompetitiveness and solidarity have both been taken into account in building a successful Europe for the future".
While European states do not all use a single social model, welfare states in Europe share several broad characteristics. These generally include an acceptance of political responsibility for levels and conditions of employment, social protections for all citizens, social inclusion, and democracy. 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." Because different European states focus on different aspects of the model, it has been argued that there are four distinct social models in Europe: the Nordic, British, Mediterranean and the Continental.
The general outlines of a European social model emerged during the post-war boom. 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 not yet integrated into the global economy. 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.
Welfare state in Europe
Some of the European welfare states have been described as the most well developed and extensive. A unique "European social model" is described in contrast with the social model existing in the US. Although each European country has its own singularities, four traditional welfare or social models are identified in Europe, as well as possible fifth one to cover formerly communist Central and Eastern Europe: The Nordic (Social democratic) model in Denmark, Finland, Norway, Sweden, and the Netherlands The Continental (Christian democratic) model in Austria, Belgium, Czech Republic, France, Germany, Hungary, Luxembourg, Poland, and Slovenia The Anglo-Saxon (Liberal) model in Ireland and the United Kingdom The Mediterranean model in Greece, Italy, Portugal, and Spain The Eastern European model in Bulgaria, Estonia, Latvia, Lithuania, and Romania
Nordic model
As can be seen in the graph to the right, the Nordic model holds the highest level of social insurance. Its main characteristic is its universal provision nature which is based on the principle of "citizenship". Therefore, there exists a more generalised access, with lower conditionability, to the social provisions.
As regards labour market, these countries are characterised by important expenditures in active labour market policies whose aim is a rapid reinsertion of the unemployed into the labour market. These countries are also characterised by a high share of public employment. Trade unions have a high membership and an important decision-making power which induces a low wage dispersion or more equitable income distribution.
The Nordic model is also characterised by a high tax wedge.
Continental model
The Continental model has some similarities with the Nordic model. Nevertheless, it has a higher share of its expenditures devoted to pensions. The model is based on the principle of "security" and a system of subsidies which are not conditioned to employability (for example in the case of France or Belgium, there exist subsidies whose only requirement is being older than 25).
As regards the labour market, active policies are less important than in the Nordic model and in spite of a low membership rate, trade-unions have important decision-making powers in collective agreements.
Another important aspect of the Continental model is the disability pensions.