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Britain and Germany have been experiencing significant changes in the nature of work and welfare since the 1990s. Although important differences have remained, there have been compelling indications of a dual transformation of welfare constituted not only by a far-reaching retrenchment in unemployment insurance but also by a remarkable expansion in family policy. These developments have their functional underpinnings in accelerating de-industrialization with a declining proportion of the male workforce with specific skills as well as in service sector growth and rising female labor market participation characterized by an increase in general skills. As the aggregate effect of economic fluctuations in industrial production has diminished over time, the relative incidence of work disruptions which have arisen from maternity and child-rearing has increased substantially. This dual transformation in welfare and employment patterns suggests that the process of de-industrialization has initiated significant path adjustments unanticipated in the existing comparative political economy literature. [ABSTRACT FROM AUTHOR]