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European Integration and the Future of the Welfare State

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  • Sinn, Hans-Werner

Abstract

This paper argues that increased factor mobility incurs the risk of dismantling the welfare state, even though this state may have useful allocative functions. It will be difficult to finance the welfare state with taxes on capital and it may be necessary to subsidize this factor in the sense that some of the infrastructure it uses will have to be covered by taxes on other factors. In general, redistribution activities are underprovided, since they provide other countries with positive policy externalities. To overcome these difficulties and to make competition among welfare states workable, the paper suggests taxing capital income on a cash flow basis and other incomes on the basis of a nationality principle.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1871.

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Date of creation: Apr 1998
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Handle: RePEc:cpr:ceprdp:1871

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Related research

Keywords: European Integration; Welfare State;

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Citations

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Cited by:
  1. DREZE, Jacques, 2000. "Economic and social security in the twenty-first century, with attention to Europe," CORE Discussion Papers 2000015, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Leon Bettendorf & Joeri Gorter & Albert van der Horst, 2006. "Who benefits from tax competition in the European Union?," CPB Document 125, CPB Netherlands Bureau for Economic Policy Analysis.
  3. Fehn, Rainer, 2001. "Institutioneller Wettbewerb und soziale Sicherungssysteme in Europa," Wirtschaftswissenschaftliche Beiträge 45, Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik.
  4. Durevall, Dick & Henrekson, Magnus, 2010. "The Futile Quest for a Grand Explanation of Long-Run Government Expenditure," Working Paper Series 818, Research Institute of Industrial Economics, revised 28 Oct 2010.
  5. Alan Krueger, 1999. "From Bismarck to Maastricht: The March to European Union and the Labor Compact," Working Papers 803, Princeton University, Department of Economics, Industrial Relations Section..
  6. Alho, Kari E., 2002. "Labour Markets and Immigration Connected to Enlargement," Discussion Papers 791, The Research Institute of the Finnish Economy.
  7. Berthold, Norbert & Neumann, Michael, 2006. "Europas Sozialstaaten im Schatten der Globalisierung," Wirtschaftswissenschaftliche Beiträge 88, Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik.
  8. Berthold, Norbert & von Berchem, Sascha, 2005. "Lokale Solidarität: die Zukunft der Sozialhilfe?," Wirtschaftswissenschaftliche Beiträge 76, Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik.
  9. repec:fth:prinin:424 is not listed on IDEAS
  10. Jerger, Jurgen, 2002. "Globalization, wage setting, and the welfare state," Journal of Policy Modeling, Elsevier, vol. 24(1), pages 1-18, March.
  11. Susanna Kochskämper, 2011. "Krankenversicherung in der Europäischen Union: Versicherungspflicht, Wanderungskosten und das Recht auf Freizügigkeit," Otto-Wolff-Institut Discussion Paper Series 05/2011, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland.

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