Equity, Efficiency and Growth: The Future of the Welfare State

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British Journal of Political Science, vol. Italian translation: La teoria del fallimento del settore pubblico. Problemi di amministrazione pubblica, n. Machin, S. European Economic Review, Vol. Okun, A. The Big Trade-off. The Brookings Institution, Washington. Perotti, R. Journal of Economic Growth,Vol. Phelps, E. Pizzuti, F. Liguori, Napoli. Me Graw- Hill, Milan.

In: Pizzuti ed. In: Castellino, O. In: Hughes, G. Kluwer Academic Publishers, Boston.

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In: Reynaud, E. Pizzuti, E. Labour, Vol. Angeli, Milan. Rodrik, D. National Bureau of Economic Research. Cambridge, MA. Institute for International Economics. March, Washington DC. Saint-Paul, G. Sala-i-Martin, X.

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Buy Hardcover. Buy Softcover. FAQ Policy. About this book In the post-war period, spending on social security, health and education has grown continuously in the leading industrialized countries. Show all. Pages Snower, Dennis J. Although each European country has its own singularities, four welfare or social models are identified in Europe: [9] [10] [11]. As can be seen in the graph to the right, the Nordic model holds the highest level of social insurance.

Its main characteristic is its universal provision nature which is based on the principle of "citizenship". Therefore, there exists a more generalised access, with lower conditionability, to the social provisions. As regards labour market, these countries are characterised by important expenditures in active labour market policies whose aim is a rapid reinsertion of the unemployed into the labour market.

These countries are also characterised by a high share of public employment. Trade unions have a high membership and an important decision-making power which induces a low wage dispersion or more equitable income distribution. The Nordic model is also characterised by a high tax wedge.

ceswajunkta.ga The Continental model has some similarities with the Nordic model. Nevertheless, it has a higher share of its expenditures devoted to pensions. The model is based on the principle of "security" and a system of subsidies which are not conditioned to employability for example in the case of France or Belgium, there exist subsidies whose only requirement is being older than As regards the labour market, active policies are less important than in the Nordic model and in spite of a low membership rate, trade-unions have important decision-making powers in collective agreements.

Another important aspect of the Continental model is the disability pensions. The Anglo-Saxon model features a lower level of expenditures than the previous ones.

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Its main particularity is its social assistance of last resort. Subsidies are directed to a higher extent to the working-age population and to a lower extent to pensions. Access to subsidies is more conditioned to employability for instance, they are conditioned on having worked previously.

Active labour market policies are important. Instead, trade unions have smaller decision-making powers than in the previous models, this is one of the reasons explaining their higher income dispersion and their higher number of low-wage employments.

The Mediterranean model corresponds to southern European countries who developed their welfare state later than the previous ones during the s and s. It is the model with the lowest share of expenditures and is strongly based on pensions and a low level of social assistance. There exists in these countries a higher segmentation of rights and status of persons receiving subsidies which has as one of its consequences a strongly conditioned access to social provisions.

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The main characteristic of labour market policies is a rigid employment protection legislation and a frequent resort to early retirement policies as a means to improve employment conditions. Trade unions tend to have an important membership which again is one of the explanations behind a lower income dispersion than in the Anglo-Saxon model. To evaluate the different social models, we follow the criteria used in Boeri and Sapir which consider that a social model should satisfy the following:. The graph on the right shows the reduction in inequality as measured by the Gini index after taking account of taxes and transfers, that is, to which extent does each social model reduce poverty without taking into account the reduction in poverty provoqued by taxes and transfers.

The level of social expenditures is an indicator of the capacity of each model to reduce poverty: a bigger share of expenditures is in general associated to a higher reduction in poverty.