Much has been written about rigidities in shaping the poor performance of European labor markets. As EMU approaches, many wonder what interactions might be expected between labor market institutions and the changing character of EU economies. Absolute and relative efficiency are likely to become more important within EMU since increased specialization and more intense competition could enhance opportunities for labor reallocation, and free mobility of capital will more harshly penalize relatively inefficient countries and regions. On the other side of the same coin, increased turbulence of labor demand may generate calls for protection, especially as monetary and fiscal policies can hardly be used to offset asymmetric shocks.This book offers constructive comments and policy recommendations on the design and implementation of social policies in the EU. The ongoing debate surrounding the Social Chapter of the Maastricht Treaty has highlighted many of the issues addressed here: Can social policies continue to be implemented at the national level? Or is social dumping inevitable in the absence of a common social policy? If provisions are needed, should they take the form of minimal agreements, or should there be exceptions for particular countries? What consideration should future candidates from Central and Eastern Europe receive when designing current social policy directives? Is social dumping a healthy matter to force countries to lighten their excessive labor market regulations?The authors are Charles Bean, Centre for Economic Performance, LSE; Samuel Bentolila, CEMFI, Madrid; Giuseppe Bertola, European University Institute, Firenze; and Juan J Dolado, Universidad Carlos III, Madrid.

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Analysis of European Labour Markets.

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