What types of social policies does business want? Examining German employer associations’ positions toward labor-protective and labor-activating social policies

Abstract

Studies inspired by the varieties of capitalism (VoC) approach suggest that in coordinated market economies, some employer associations support public social policies to encourage the workforce to invest in company and industry-specific skills (VoC thesis). Yet the VoC thesis remains disputed. We present and assess an alternative thesis that builds on employers’ interest in the protection of labor supply (labor supply thesis). We test the labor supply thesis using a systematic content analysis of 370 press releases issued from 2002 to 2017 and find evidence of moderate employer support for more labor-activating social policies and less labor-protective social policies. Moreover, the analysis shows a decline in preference heterogeneity, with the positions of the four German employer associations converging toward the end of the period analyzed. Our findings have theoretical and methodological implications: First, they point to the relevance of labor supply as a source of employers’ social policy preferences. Second, they point to the need for a more systematic measurement of employer policy positions to be able to compare positions accurately.