The key to economic reform in Germany is a significant reduction in the high costs of labour.The main factor driving up German labour costs is the funding of the extensive German welfare state through social insurance contributions that in effect operate like payroll taxes on employment. The...

Germany?s social security system is surveyed, its benefits and contributions are discussed. The expansion of this system in the last decades is described, its impact on employment and growth is studied and proposals for the reform of the system are discussed.

The paper examines the possible effects of introducing a large-scale welfare reform in Sweden, namely, the introduction of comprehensive welfare accounts. Under this policy, individuals make mandatory contributions to accounts, which they can top up with voluntary contributions. In return,...