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The interdependence between labour market policy and social policy can be interpreted in different ways. The dualistic approach sees social policy as a counterpart to labour market policy, especially if the latter is exclusively interpreted as the means for achieving an efficient design of factor markets. By contrast, constitutional economics introduces the concept of a “social policy for the market” by emphasizing the mutual gains that can be reaped if the interdependence between social and labour market policies is properly taken into account. Achieving an efficient design of markets thus requires a corresponding social policy framework. This article reminds of a third perspective: The efficient design of markets is never an end in itself. Overcoming social hardship, however, is a respectable goal. The author first develops a concept of social policy that draws on market-based processes to achieve its goals before applying this concept to the problem of structural long-term unemployment.

Offene Arbeitsmärkte als Mittel und Ziel einer modernen Sozialpolitik