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Atypical work, i.e. part-time and fixed term employment, has become the new norm in many industrialised countries. Welfare states, however, were traditionally designed to accommodate the needs of standard workers in manufacturing. This study examines to what extent welfare states have adapted to the proliferation of atypical work in the period of 1990 to 2008. Since the rise of atypical work is closely related to deindustrialisation and an increasing role of services in developed economies, the study also deals with the question how the specific design of welfare schemes has incentivised growth or stagnation of various service sectors.