The Welfare State, Budgetary Pressure and Labor Market Shifts
The Scandinavian Journal of Economics, Vol. 102, Issue 3, September 2000
Posted: 18 Aug 2001
Public debate about the welfare state in OECD countries has emphasized the need for reform to meet a two-fold set of shocks: budgetary pressure and a labor market shift against unskilled workers. The aim of the paper is to set out a framework for examining the implications of these shocks for the optimal scale of social transfers and, in particular, the impact on different societies, distinguishing a restricted welfare state, labelled "the United States" and a more extensive welfare state, labelled "Continental Europe."
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