The comparative political economy of job creation: European growth and employment models

Recent studies within Comparative Political Economy have sought to identify European growth models by analysing the relationships between the institutional framework, income distribution and aggregate demand. This paper contributes to this debate by examining the strategy for unemployment reduction and the sectoral drivers of output and employment growth as core parts of any growth model. We propose a new analytical framework that focuses on three aspects of the economy: (1) the drivers of demand growth, (2) the determinants of the evolution of unemployment through Okun's law and (3) the sectoral patterns of output and employment creation. This approach, which considers both supply and demand aspects, is applied to the cases of Italy, Spain, the United Kingdom, Germany and Sweden before and after the 2008 crisis, and has the potential to refine the taxonomy of European growth models.