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Incentives in the Welfare State

  • Lindbeck, Assar

    ()

    (Institute for International Economic Studies, Stockholm University)

This paper deals with economic incentives and welfare-state arrangements in OECD countries; it also offers some lessons for would-be welfare states. These arrangements differ, of course, among OECD countries. In particular, there is wide variation in the extent to which countries rely on four basic institutions - the state, the firm, the family and the market. Countries also differ in their reliance on (i) a common safety net, often in the form of flat-rate benefits tied to specific contingencies; (ii) means-tested benefits for low-income groups; and (iii) income protection, i.e., benefits that are tied to previous income. Another distinction is between corporatist welfare states, where benefits are tied to labor contracts, and universal welfare states in which benefits are conditional on residence or citizenship. This distinction is blurred, however, by recent tendencies in corporatist welfare states to extend coverage to individuals who have very weak attachment to the labor market, and in universal welfare states to tie benefits to previous or contemporary work under the slogan “workfare” rather than “welfare”.

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Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 604.

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Length: 33 pages
Date of creation: 31 Oct 1997
Date of revision:
Handle: RePEc:hhs:iiessp:0604
Contact details of provider: Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
Phone: +46-8-162000
Fax: +46-8-161443
Web page: http://www.iies.su.se/

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  1. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October.
  2. Paul Cashin, 1994. "Government Spending, Taxes, and Economic Growth," IMF Working Papers 94/92, International Monetary Fund.
  3. repec:cup:cbooks:9780521433297 is not listed on IDEAS
  4. Sergio T. Rebelo, 1990. "Long Run Policy Analysis and Long Run Growth," NBER Working Papers 3325, National Bureau of Economic Research, Inc.
  5. Lindbeck, A., 1994. "Uncertainty under the Welfare State - Policy Induced Risk -," Papers 576, Stockholm - International Economic Studies.
  6. Rodrik, Dani & Alesina, Alberto, 1994. "Distributive Politics and Economic Growth," Scholarly Articles 4551798, Harvard University Department of Economics.
  7. Ljungqvist, Lars & Sargent, Thomas J, 1995. "Welfare States and Unemployment," Economic Theory, Springer, vol. 6(1), pages 143-60, June.
  8. Lindbeck, Assar, 1995. "Welfare State Disincentives with Endogenous Habits and Norms," Working Paper Series 441, Research Institute of Industrial Economics.
  9. Persson, T. & Tabellini, G., 1993. "Is Inequality Harmful for Growth," Papers 537, Stockholm - International Economic Studies.
  10. Lindbeck, A & Nyberg, S & Weibull, J-W, 1996. "Social Norms, the Welfare State, and Voting," Papers 608, Stockholm - International Economic Studies.
  11. R. Haveman & B. Wolfe, . "Children's prospects and children's policy," Institute for Research on Poverty Discussion Papers 1010-93, University of Wisconsin Institute for Research on Poverty.
  12. Robert C. Merton, 1981. "On the Role of Social Security as a Means for Efficient Risk-Bearing in an Economy Where Human Capital Is Not Tradeable," NBER Working Papers 0743, National Bureau of Economic Research, Inc.
  13. Bjorklund, A. & Palme, M. & Svensson, I., 1995. "Assessing the Effects of Swedish Tax and Benefit Reforms on Income Distribution Using Different Income Concepts," Papers 13, Uppsala - Working Paper Series.
  14. Krumm, Kathie & Milanovic, Branko & Walton, Michael, 1994. "Transfers and the transition from socialism : key tradeoffs," Policy Research Working Paper Series 1380, The World Bank.
  15. Milanovic, Branko, 1995. "Poverty, inequality, and social policy in transition economies," Policy Research Working Paper Series 1530, The World Bank.
  16. Peter Diamond, 2004. "Social Security," American Economic Review, American Economic Association, vol. 94(1), pages 1-24, March.
  17. Markus JΣntti & Sheldon Danziger, 1994. "Child poverty in Sweden and the United States: The effect of social transfers and parental labor force participation," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(1), pages 48-64, October.
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