The Dutch ‘Miracle’ Revisited: The Impact of Employment Growth on Poverty

Abstract

The past decade has been marked by the coming to prominence of social policy doctrines at the centre of which sits the idea that poverty reduction is best achieved through increased levels of labour market participation. A major reference point in the debate is the Netherlands, where a radical policy shift from passive benefit adequacy towards boosting labour market participation was initiated around the late 1980s and where it has been vigorously pursued since. The Netherlands is routinely praised for achieving a meteoric rise in employment, while maintaining extensive social protection and low levels of poverty and inequality. This article shows that unprecedented employment growth during the 1980s and 1990s went accompanied with comparatively small reductions in absolute poverty and a rise in relative poverty among the working-age population. These developments are linked to the main features of Dutch economic and social policy. The article also draws out some general lessons.