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The Scandinavian Model – Prospects and Challenges

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  • Torben Andersen

Abstract

Scandinavian countries are often portrayed in policy debates as model examples having shown how to square concerns for efficiency and equity. The core principle of the Scandinavian welfare model is an individual entitlement to public sector provisions combined with collective financing via taxes. However, a high employment rate is needed to ensure financial viability of this model. The Scandinavian model faces several challenges which affect the possibilities of maintaining a high employment ratio, namely, demographic changes, a growth dilemma and globalization. This paper discusses how these challenges affect the need and scope for reforms of the Scandinavian welfare model.

Suggested Citation

  • Torben Andersen, 2007. "The Scandinavian Model – Prospects and Challenges," CESifo Working Paper Series 1903, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_1903
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp1903.pdf
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    References listed on IDEAS

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    1. Nordhaus William D, 2008. "Baumol's Diseases: A Macroeconomic Perspective," The B.E. Journal of Macroeconomics, De Gruyter, vol. 8(1), pages 1-39, February.
    2. Baumol, William J & Blackman, Sue Anne Batey & Wolff, Edward N, 1985. "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," American Economic Review, American Economic Association, vol. 75(4), pages 806-817, September.
    3. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    4. Assar Lindbeck, 2006. "Sustainable social spending," International Tax and Public Finance, Springer;International Institute of Public Finance, pages 303-324.
    5. Charles I. Jones, 2002. "Why Have Health Expenditures as a Share fo GDP Risen So Much?," NBER Working Papers 9325, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    fiscal sustainability; welfare state; demographics; globalization;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • P10 - Economic Systems - - Capitalist Systems - - - General

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