Recent work in comparative political economy has emphasized the existence of functional equivalents to the welfare state in the area of labor market policy. In many European countries, in Australia, and in New Zealand, labor laws, minimum wages, and collective agreements have traditionally played an important role in guaranteeing a certain level of economic security for workers and their families. This article tries to explain why different countries have developed different instruments for providing economic security to wage earners. It compares labor legislation and practices across several European countries and focuses on the detailed trajectory of France, Germany, and the United Kingdom. It finds that state-society relationships and ideological influences at key historical moments can help understand the original divergence, which is perpetuated through a typical path-dependent development.
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