An Incomes Policy for the Professions: the Dutch Experience

v an der Hoek, M. (1988): An Incomes Policy for the Professions: the Dutch Experience. Published in: The American Journal of Economics and Sociology , Vol. 47, No. 1 (January 1988): pp. 71-80.

Abstract

In 1951 the United States began moving toward an incomes policy, an attempt to end postwar wage and price inflation by linking changes in these prices to gains in productivity. Other countries later followed suit; some countries had already adopted wage and price control policies. The Netherlands moved toward an incomes policy immediately after World War II. Initially, the Dutch program involved wages only, but in the 1970s it became an accepted principle that private professional income should be comparable with the salaries of government officials and civil servants with comparable training and responsibilities. In the Netherlands (as in the United States and, before medicine was socialized, the United Kingdom) health professionals operate on a fee-for-service basis and their incomes escalated as a result of both inflation and monopoly power. So they were subjected to the incomes policy. The policy's effectiveness in curbing income escalation cannot be determined with certainty—reliable data are lacking. However, the evidence indicates that the policy failed to achieve its original purpose.

• Item Type: MPRA Paper
• Language: English
• Keywords: Incomes policy, Netherlands
• Subjects: J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J38 - Public Policy

References

Blackaby, F. (1972), "Incomes Policies: A Background Paper," In An Incomes Policy for Britain, ed. by F. Blackaby (London: Heinemann Educational Books), pp. 217-36. Brittan, S. and P. Lilley (1977), The Delusion of Incomes Policy (London: Temple Smith). Chafer, R.E.J., A. Dean, and F. Elliott, eds. (1981), Incomes Policy (Oxford: Clarendon Press). De Jong, J. R. (1972), "National Wage and Job Evaluation in the Netherlands," In An Incomes Policy for Britain, edited by F. Blackaby (London: Heinemann), pp. 145-60. De Wolff, P. (1983), "Income Policy Developments in the Netherlands," Industrial Relations, Vol. 22, No. 2 (Spring 1983), pp. 203-23. Flanagan, R. J., D. W. Soskice, and L. Ulman (1983), Unionism, Economic Stabilization and Incomes Policies: European Experience, (Washington: The Brookings Institution). Industrial Democracy in Europe (IDE) International Research Group (1981), European Industrial Relations (Oxford: Clarendon Press). Kennedy, T. (1980), European Labor Relations (Lexington: D. C. Heath and Company). Olson, M. (1982), The Rise and Decline of Nations (New Haven and London: Yale Univ. Press).