The Third Way: the Dutch experience

The Third Way in the Netherlands rests upon the institutionalized co-operation between the trade unions, the employers' organizations and the state. During the period of high unemployment in the 1980s this co-operation led to several agreements to moderate wage costs and to reduce statutory working hours with the object of reducing unemployment. In the 1990s,when labour became scarce, new measures were agreed upon to increase participation in the labour market and to boost productivity. Critics of the agreements suggest that the policies adopted by the socio-economic partners in the 1980s, particularly the moderation of wages and the reduction of work time to create more jobs, have a negative effect on the long-term prospects of attaining higher productivity.