In this chapter, we outline the combination of supply-side and demand-sidefactors which have allowed these countries to reconcile high employmentwith comparatively low inequality, and outline the trade-offs associated withthem. We discuss the combination of negotiated policy-making, continuouswage moderation, and flexibility through part-time employment and otherentry routes into employment (on the supply side), combined with a numberof measures that have supported domestic consumption, such as immigrationand tax incentives (on the demand side), with diverging impacts throughoutthe crisis. We begin with a brief presentation of some basic facts and featuresof the social models of the two countries and their development during thepast two decades. Next, we summarize and explain the key reforms undertaken in the social models, and then outline their impact on labor marketoutcomes in the lead-up to the crisis. Finally, we assess the performance of thesocial models during the latest economic crisis and outline their limits.