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The Welfare State -- Background, Achievements, Problems

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  • Lindbeck, Assar

    (The Research Institute of Industrial Economics)

Abstract

This paper starts out with a brief discussion of the historical background, the justifications and the political forces behind the built up of the modern welfare state. It also summarizes its major achievements in terms of economic efficiency and redistribution. The paper also tries to identify some major problems of contemporary welfare-state arrangements, differentiating exogenous shocks from endogenous behaviour adjustments by individuals to the welfare state itself. The latter include tax distortions, moral hazard, and endogenous changes in social norms concerning work and benefit dependency.

Suggested Citation

  • Lindbeck, Assar, 2006. "The Welfare State -- Background, Achievements, Problems," Working Paper Series 662, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0662
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    References listed on IDEAS

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    1. Assar Lindbeck & Sten Nyberg & Jörgen W. Weibull, 1999. "Social Norms and Economic Incentives in the Welfare State," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 1-35.
    2. Baumol, William J, 1972. "Macroeconomics of Unbalanced Growth: Reply," American Economic Review, American Economic Association, vol. 62(1), pages 150-150, March.
    3. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 28(Jul), pages 2-13.
    4. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 465-490.
    5. Peter Lindert, 2004. "Social Spending and Economic Growth," Challenge, Taylor & Francis Journals, vol. 47(4), pages 6-16.
    6. Pearson, Mark & Martin, John P., 2005. "Should We Extend the Role of Private Social Expenditure?," IZA Discussion Papers 1544, Institute of Labor Economics (IZA).
    7. Willem Adema & Maxime Ladaique, 2005. "Net Social Expenditure, 2005 Edition: More Comprehensive Measures of Social Support," OECD Social, Employment and Migration Working Papers 29, OECD Publishing.
    8. Becker, Gary S & Murphy, Kevin M, 1988. "The Family and the State," Journal of Law and Economics, University of Chicago Press, vol. 31(1), pages 1-18, April.
    9. Lindbeck, Assar & Persson, Mats, 2006. "A Model of Income Insurance and Social Norms," Working Paper Series 659, Research Institute of Industrial Economics.
    10. Joakim Palme & Walter Korpi, 1998. "The Paradox of Redistribution and Strategies of Equality: Welfare State Institutions, Inequality and Poverty in the Western Countries," LIS Working papers 174, LIS Cross-National Data Center in Luxembourg.
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    Citations

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    Cited by:

    1. Roine, Jesper & Waldenstrom, Daniel, 2008. "The evolution of top incomes in an egalitarian society: Sweden, 1903-2004," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 366-387, February.
    2. repec:aia:aiaswp:wp47 is not listed on IDEAS
    3. Naufal Mahfudz, 2021. "The Objective Conditions of the Competency of Labor Social Security Practitioners in Facing Future Jobs," GATR Journals jber196, Global Academy of Training and Research (GATR) Enterprise.
    4. Luciano G. Greco, 2011. "Optimal Redistribution with Productive Social Services," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(1), pages 55-73, March.
    5. Roland Vaubel, 2012. "Redistribution as income insurance?," Public Choice, Springer, vol. 152(3), pages 389-392, September.
    6. Zwiers, Merle & Bolt, Gideon & van Ham, Maarten & van Kempen, Ronald, 2014. "Neighborhood Decline and the Economic Crisis," IZA Discussion Papers 8749, Institute of Labor Economics (IZA).
    7. Hyejin Ko, 2020. "Measuring fiscal sustainability in the welfare state: fiscal space as fiscal sustainability," International Economics and Economic Policy, Springer, vol. 17(2), pages 531-554, May.
    8. Berthold, Norbert & Brunner, Alexander, 2007. "Gibt es ein europäisches Sozialmodell?," Discussion Paper Series 100, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    9. Merle Zwiers & Ferry Koster, 2015. "The local structure of the welfare state: Uneven effects of social spending on poverty within countries," Urban Studies, Urban Studies Journal Limited, vol. 52(1), pages 87-102, January.
    10. Roland Vaubel, 2018. "Justifications For Redistribution: A Critique," Economic Affairs, Wiley Blackwell, vol. 38(2), pages 166-184, June.
    11. Peter Birch Sørensen & Martin Ino Hansen & A. Lans Bovenberg, 2006. "Savings Accounts and the Life-Cycle Approach to Social Insurance," EPRU Working Paper Series 06-03, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.

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    More about this item

    Keywords

    Justifications for Welfare State; Incentive Problems; Moral Hazard; Social Norms;
    All these keywords.

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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