Introduction: does the welfare state hurt employment? -- Developments in European labor markets: two theoretical perspectives -- The argument -- The organization of the study -- The economic and political consequences of welfare state maturation -- Labor market institutions and economic performance -- Labor market institutions and monetary policy -- A theoretical synthesis: labor market institutions, monetary policies and the welfare state -- Looking ahead -- Appendix -- Equilibrium prices and consumption -- Derivation of trade unions' optimal wage demands -- Proofs of comparative statics results -- Centralization of the wage bargaining system: a comparison with the Calmfors-Driffill approach -- A quantitative analysis -- Testing the model: measurement of the central explanatory variables -- The dependent variable: the employment performance of OECD economies -- Regression analysis -- Conclusions -- Sweden: Policy developments in the immediate postwar years -- The Rehn-Meidner model -- Wage and social policy developments of the 1960s -- Strains on the system: interunion rivalry, 1970-1976 -- Policy developments under conservative governments, 1976-1982 -- The return of the social democrats, 1982-1990 -- The double sacrifice: wage and social policy developments of the 1990s -- Conclusion -- Germany: The wage-social policy nexus during the Adenauer-Erhard period, 1950-1966 -- Wage bargaining and social policy developments under the Grand coalition, 1966-1969 -- Wage bargaining and social policy expansion in the Brandt era, 1969-1974 -- Wage bargaining and social policy developments under the social-liberal coalition, 1974-1982 -- The consequences of welfare state maturation: wage and social policy developments, 1982-1990 -- The aftermath of German reunification, 1990-1997 -- Conclusions -- Britain: Wage developments of the postwar years, 1945-1950 -- Social policy and wage moderation under the conservatives, 1951-1964 -- The Labor government, 1964-1970 -- Conservatives again, 1970-1974 -- The social contract, 1974-1979 -- The conservative attack on the social wage, 1980-1996 -- Welfare state and labor market reforms under New Labour -- Conclusion -- Conclusion: new social pacts in contemporary Europe -- The theoretical argument -- Implications for the politics of new social pacts.