Maintaining ‘full employment’ in conditions where deindustrialization has removed many of the traditional male, blue-collar jobs, where women are entering the workforce in increasing numbers, and where budgetry constraints make it difficult to reduce the problem by increasing public sector employment constitutes a significant challenge for many welfare regimes. Is it feasible, in the light of these developments, to formulate labour market policies that can lead to greater employment opportunities without eroding the institutional structures and assumptions on which any particular welfare regime is founded? To answer this question, this chapter will first examine the changing nature of labour markets and employment in selected OECD countries before moving on to consider how liberal welfare regimes have attempted to use labour market policies to deal with the difficulties involved. Taking these regimes as examples of extensive change, Chapter Five will then consider the labour market measures that social democratic and continental regimes are developing to bolster employment and assess the impact of these policies on their institutional make-up.