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Employment Outcomes in the Welfare State

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  • L. Rachel Ngai
  • Christopher A. Pissarides

Abstract

We examine the implications of tax and subsidy policies for employment in the ?three worlds of welfare?, Anglo-Saxon, Continental European and Scandinavian. We argue that home production is key to a proper evaluation of the employment outcomes. Anglo-Saxon low-support policies encourage more overall market employment. Continental transfer policies encourage more home production in services with close substitutes at home. Scandinavian policies give incentives to move home production in social services to the market but discourage other service activity. We find support for our claims in sectoral employment data for five representative countries, United States, Britain, France, Italy and Sweden.

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Bibliographic Info

Article provided by Presses de Sciences-Po in its journal Revue économique.

Volume (Year): 59 (2008)
Issue (Month): 3 ()
Pages: 413-436

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Handle: RePEc:cai:recosp:reco_593_0413

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  1. Edward C. Prescott, 2004. "Why do Americans Work so Much More than Europeans?," NBER Working Papers 10316, National Bureau of Economic Research, Inc.
  2. Ngai, Liwa Rachel & Pissarides, Christopher, 2004. "Structural Change in a Multi-Sector Model of Growth," CEPR Discussion Papers 4763, C.E.P.R. Discussion Papers.
  3. Esping-Andersen, Gosta, 1999. "Social Foundations of Postindustrial Economies," OUP Catalogue, Oxford University Press, number 9780198742005, Octomber.
  4. Francesco Daveri & Guido Tabellini, . "Unemployment, Growth and Taxation in Industrial Countries," Working Papers 122, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  5. Bertola, Giuseppe & Blau, Francine D & Kahn, Lawrence, 2002. "Labour Market Institutions and Demographic Employment Patterns," CEPR Discussion Papers 3448, C.E.P.R. Discussion Papers.
  6. Olivier Blanchard, 2006. "European unemployment: the evolution of facts and ideas," Economic Policy, CEPR & CES & MSH, vol. 21(45), pages 5-59, 01.
  7. Assar Lindbeck, 1997. "The Swedish Experiment," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1273-1319, September.
  8. Giulia Faggio & Stephen Nickell, 2006. "Patterns of work across the OECD," LSE Research Online Documents on Economics 19853, London School of Economics and Political Science, LSE Library.
  9. Richard Rogerson, 2007. "Taxation and market work: is Scandinavia an outlier?," Economic Theory, Springer, vol. 32(1), pages 59-85, July.
  10. Assar Lindbeck, 1988. "Consequences of the Advanced Welfare State," The World Economy, Wiley Blackwell, vol. 11(1), pages 19-38, 03.
  11. Richard B. Freeman & Ronald Schettkat, 2005. "Marketization of household production and the EU-US gap in work," Economic Policy, CEPR & CES & MSH, vol. 20(41), pages 6-50, 01.
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Cited by:
  1. Urban Sila, 2009. "Can family-support policies help explain differences in working hours across countries?," LSE Research Online Documents on Economics 28684, London School of Economics and Political Science, LSE Library.
  2. Niko Matouschek & Paolo Ramezzana & Frédéric Robert-Nicoud, 2008. "Labor market reforms, job instability, and the flexibility of the employment relationship," LSE Research Online Documents on Economics 19599, London School of Economics and Political Science, LSE Library.
  3. Andreas Georgiadis, 2008. "Efficiency Wages and the Economic Effects of the Minimum Wage: Evidence from a Low-Wage Labour Market," CEP Discussion Papers dp0857, Centre for Economic Performance, LSE.
  4. L. Ngai & Roberto Samaniego, 2009. "Mapping prices into productivity in multisector growth models," Journal of Economic Growth, Springer, vol. 14(3), pages 183-204, September.

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