Nobel Prize Economist James Heckman Praises Paper on the European Welfare State and Unemployment

James Heckman
Capitalism and Society, 2007

James Heckman, who won the Nobel Prize in economics in 2000, agreed that the evidence tying high unemployment rates in some European countries with a generous welfare state is weak. This was the main thrust of his comment on an article in Capitalism and Society written by David Howell (New School), Andrew Glyn (Oxford University) and CEPR economists Dean Baker and John Schmitt.

The article, along with prior research by the same team, questioned the conclusions of other studies that purported to show that high unemployment rates in some European countries were caused by a welfare state that was too generous and labor unions that were too strong. Until recently, this view had been widely accepted among economists and in policy circles, although there has been a shift in recent years partly because of this team’s research.

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