The Scandinavian Model - Prospects and Challenges

35 Pages Posted: 8 Feb 2007

See all articles by Torben M. Andersen

Torben M. Andersen

University of Aarhus - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Date Written: January 2007

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.

Keywords: fiscal sustainability, welfare state, demographics, globalization

JEL Classification: H1, E62, F22, P1

Suggested Citation

Andersen, Torben M., The Scandinavian Model - Prospects and Challenges (January 2007). CESifo Working Paper Series No. 1903, Available at SSRN: https://ssrn.com/abstract=962047

Torben M. Andersen (Contact Author)

University of Aarhus - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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