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The Welfare State -- Background, Achievements, Problems

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.

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File URL: http://www.ifn.se/Wfiles/wp/WP662.pdf
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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 662.

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Length: 20 pages
Date of creation: 27 Feb 2006
Date of revision:
Handle: RePEc:hhs:iuiwop:0662
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  1. Rodrik, Dani & Alesina, Alberto, 1994. "Distributive Politics and Economic Growth," Scholarly Articles 4551798, Harvard University Department of Economics.
  2. Lindbeck, Assar & Persson, Mats, 2006. "A Model of Income Insurance and Social Norms," Seminar Papers 742, Stockholm University, Institute for International Economic Studies.
  3. Peter Lindert, 2004. "Social Spending and Economic Growth," Challenge, M.E. Sharpe, Inc., vol. 47(4), pages 6-16, July.
  4. 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.
  5. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Jul, pages 2-13.
  6. Baumol, William J, 1972. "Macroeconomics of Unbalanced Growth: Reply," American Economic Review, American Economic Association, vol. 62(1), pages 150, March.
  7. Gary S. Becker & Kevin M. Murphy, . "The Family and the State," University of Chicago - Population Research Center 87-15, Chicago - Population Research Center.
  8. Mark Pearson & John P. Martin, 2005. "Should We Extend the Role of Private Social Expenditure?," OECD Social, Employment and Migration Working Papers 23, OECD Publishing.
  9. Assar Lindbeck & Sten Nyberg & Jšrgen W. Weibull, 1999. "Social Norms And Economic Incentives In The Welfare State," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 1-35, February.
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