Working Paper Series
The Welfare State -- Background, Achievements, Problems
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.
Keywords: Justifications for Welfare State; Incentive Problems; Moral Hazard; Social Norms; (follow links to similar papers)
JEL-Codes: H40; H53; H55; J22; (follow links to similar papers)
20 pages, February 27, 2006
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