Scandinavian Working Papers in Economics

Seminar Papers,
Stockholm University, Institute for International Economic Studies

No 717: Improving the Performance of the European Social Model - The Welfare State over the Life Cycle

Assar Lindbeck ()
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Assar Lindbeck: Institute for International Economic Studies, Stockholm University, Postal: Stockholm University, S-106 69 Stockholm, Sweden

Abstract: The achievements of social-welfare arrangements in Western Europe are well known: considerable income security, relatively little poverty and, in some countries, ample supply of social services. But there are also well-known weaknesses and hence considerable scope for improvement. Three types of weaknesses are considered in this paper: social-welfare arrangements are often not financially robust to shocks; individuals make undesirable behavioural adjustments in response to welfare-state arrangements and their financing; and social-welfare arrangements are often poorly adapted to recent changes in socio-economic conditions and preferences of individuals. I discuss these weaknesses, and alternative methods to mitigate them, in the context of various types of welfare-state arrangements that the individual may encounter over the life cycle.

Keywords: social policies; welfare state; labour market; family structure; preferences

JEL-codes: H00; H40; H50

33 pages, February 6, 2003

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