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While the old systems competition took place with closed borders, globalisation has brought about a new type of systems competition that is driven by the mobility of factors of production. The new systems competition will likely imply the erosion of the European welfare state, induce a race to...
Persistent link: https://www.econbiz.de/10012469968
It is often argued that tax competition may lead to a "race to the bottom". Such a race may hold indeed in the case of the pure case of factor mobility (such as capital mobility). However, in this paper we emphasize the unique feature of labor migration, that may nullify the "race to the bottom"...
Persistent link: https://www.econbiz.de/10012462431
Globalization radically changes income distribution and triggers intense international tax competition. Therefore …, globalization entails an extensive restructuring of the welfare state. We analyze a parsimonious model of an open economy, in its … the interactions between taxation, provision of social benefits, and globalization. We demonstrate how these interactions …
Persistent link: https://www.econbiz.de/10012480145
This paper discusses how an industrialized country could defend the wages and social benefits of its unskilled workers against wage competition from immigrants. It shows that fixing social standards harms the workers and that fixing social replacement incomes implies migration into unemployment....
Persistent link: https://www.econbiz.de/10012467892
It has been well recognized that population ageing could generate structural changes centered around the dwindling labor force, on one hand, and the expanding dependency on the generosity of the welfare state, on the other hand. Ageing-related welfare state policy entails both fiscal issues and...
Persistent link: https://www.econbiz.de/10012814475
We study the effects of welfare generosity on international migration using reforms of immigrant welfare benefits in Denmark. The first reform, implemented in 2002, lowered benefits for non-EU immigrants by about 50%, with no changes for natives or EU immigrants. The policy was later repealed...
Persistent link: https://www.econbiz.de/10012480397
This paper argues that the social nature of humans, absent from the standard economic model, is crucial to understand our large modern social states and why concerns about inequality are so pervasive. A social solution arises when a situation is resolved at the group level (rather than the...
Persistent link: https://www.econbiz.de/10012482605
The econometric consensus on the effects of social spending confirms a puzzle we confront in the raw data: There is no clear net GDP cost of high tax-based social spending on GDP, despite a tradition of assuming that such costs are large. The paper offers five keys to this free lunch puzzle....
Persistent link: https://www.econbiz.de/10012468828
We develop a dynamic political-economic theory of welfare state and immigration policies, featuring three distinct voting groups: skilled workers, unskilled workers, and old retirees. The essence of inter- and intra-generational redistribution of a typical welfare system is captured with a...
Persistent link: https://www.econbiz.de/10012457860
In this paper we develop an approach to measuring inequality and poverty that recognizes the fact that individuals within households may have both different preferences and differential access to resources. We argue that a measure based on estimates of the sharing rule is inadequate as an...
Persistent link: https://www.econbiz.de/10012458475