1. Introduction
In this paper, we subscribe the idea that the connexions and interactions between labour
markets and social protection systems are extremely important factors to determine
the good performance of modern capitalist societies. We emphasize that labour mar-
kets and social protection systems, namely in the EU member states, are currently facing
enormous challenges that come both from external (e.g. economic globalization,
economic constraints imposed by the EMU, neoliberal approaches calling for a reduction
in social protection mechanisms) and internal changes (e.g. demographic changes
and changes in family composition, diversification of forms of employment and high
levels of unemployment). The responses to these (new) trends are embedded in different
welfare state and labour market configurations. In particular, workers’ integration
into the labour market depends on national political and institutional settings. Different
welfare backgrounds reflect differential designs of pension systems,
employment protection legislation (EPL) and other welfare state subsystems, which
are responsible for the creation of specific incentives and disincentives for the withdrawal
from work1
. As we know, work is the central pillar of the systems of welfare
that developed, namely, in capitalist countries after the Second World War. Due to recent
changes affecting both the quantity and quality of existing jobs, welfare regimes,
despite the differences that exist among them, face the common dilemma of how to
reconcile high levels of unemployment with generous social policies. In particular,
since the beginning of the nineties, the EU institutions have been trying to establish
common programs of action and/or concerted strategies to deal with structural unemployment.
Although, countries national historical configurations and politicoinstitutional
features matter within the processes of transposing these programs and
procedures into domestic policies, we have to recognize the (growing) influences that
emanate, namely, from international organizations such as the EU and the OECD. In
this paper we focus on the changes and trends affecting the Portuguese labour market
and welfare state and aim to address how the relationship between work and social
protection is being redefined. Additionally, we consider the implications of these
changes for a welfare state that seems to be in an increasingly vulnerable position to