In the 1990s the much-heralded forces of globalization (together with demographic changes and attendant political pressures) seemed to threaten the very existence of the social-market economies of Europe. Were the social compacts of Sweden and Germany outmoded? Would varieties of capitalism remain possible, or were labor-market and social-welfare arrangements converging on the U.S. model? These are the questions posed by my research, which focuses on the relationship between economic organization, labor market conditions and social policy. Inequality and Prosperity: Social Europe versus Liberal America explores the divergent social policies that are the result of the two major models of labor markets and welfare systems in the advanced industrial world: the "liberal capitalist" system of the United States and Britain, and the "social market" capitalism of Northern Europe. Drawing on national-level data from eighteen advanced industrial countries, I take issue with the traditional argument that there is a necessary trade-off between equity and efficiency. Social market economies have a great many advantages over liberal market economies, and while these two models face different challenges, they must both work to find different solutions to their problems. My current research explores the consequences of rising inequality for political participation, partisanship and government policies across advance industrial states.