In-Work Benefits and the Nordic Model

Ann-Sofie Kolm and Mirco Tonin

No 2013:1, Research Papers in Economics from Stockholm University, Department of Economics

Abstract: Welfare benefits in the Nordic countries are often tied to employment. We argue that this is one of the factors behind the success of the Nordic model, where a comprehensive welfare state is associated with high employment. In a general equilibrium setting, the underlining mechanism works through wage moderation and job creation. The benefits make it more important to hold a job, thus lower wages will be accepted, and more jobs created. Moreover, we show that the incentive to acquire higher education improves, further boosting employment in the long run. These positive effects help counteracting the negative impact of taxation.

Keywords: Nordic model; in-work benefits; wage adjustment; unemployment; education; skill formation; earnings (search for similar items in EconPapers)
JEL-codes: H24 J21 J24 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2013-01-10
New Economics Papers: this item is included in nep-cwa, nep-eur, nep-hrm, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www2.ne.su.se/paper/wp13_01.pdf (application/pdf)

Related works:
Working Paper: In-Work Benefits and the Nordic Model (2012)
Working Paper: In-Work Benefits and the Nordic Model (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:sunrpe:2013_0001

Access Statistics for this paper

More papers in Research Papers in Economics from Stockholm University, Department of Economics Department of Economics, Stockholm, S-106 91 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Anne Jensen ( this e-mail address is bad, please contact ).