7.

Case: Labour market reforms in France and the Job Law CPE : A lost opportunity
Question (a)
The question intends to analyze how the welfare state model in Europe led to the increase
in productivity and continuous growth of European economies in the post World War II
period and examine the present conditions that now warrant a change in the social model
of Europe.
The answer explained the meaning and usefulness of the social welfare model. There is a
direct transfer of funds from the state to the services for the public i.e. healthcare,
education etc. It also ensures social protection, social integrity and stability, build human
capital and manage risks, redistribution of wealth.
The second part of the answer explains unemployment benefits, increase in the retirement
ages and pension systems the main reasons which warrant a change in the social model of
Europe.
Question (b)
The question intends to analyze the long-term advantages and disadvantages of such
interventions by the students to increase the governments role in providing a better
standard of living and to provide more job opportunities.
The answer explains the advantages of state intervention such as proper functioning of
market economies, helps promotion of business and services to facilitate high-skill,
knowledge-based economy, job creations, prevents employers to discriminate in hiring on
the basis of age, sex, race, or religious belief, prohibition of child labours, ensuring safety
and security of workers etc. The answer also explained the disadvantage of state
intervention such as inappropriate resource allocation, inefficiencies of bureaucracy lead
to the failures of government-controlled programs, lack of innovation , less choices etc.
However the answer should have explained the advantages of states intervention such as
better output, improved co-ordination, fewer chances of protests and disputes, etc. With
respect to disadvantages, the answer should have explained fluctuation in economic
index, increase in disputes and protests etc.