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Employment Outcomes in the Welfare State

  • L. Rachel Ngai
  • Christopher A. Pissarides

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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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. 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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  8. Assar Lindbeck, 1997. "The Swedish Experiment," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1273-1319, September.
  9. Mirko Draca & Stephen Machin & Robert Witt, 2008. "Panic on the Streets of London: Police, Crime and the July 2005 Terror Attacks," CEP Discussion Papers dp0852, Centre for Economic Performance, LSE.
  10. Richard Rogerson, 2007. "Taxation and market work: is Scandinavia an outlier?," Economic Theory, Springer, vol. 32(1), pages 59-85, July.
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  12. Esping-Andersen, Gosta, 1999. "Social Foundations of Postindustrial Economies," OUP Catalogue, Oxford University Press, number 9780198742005.
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