Financial Restraints in a Mature Welfare State--The Case of Denmark

Torben M. Andersen and Lars Haagen Pedersen

Oxford Review of Economic Policy, 2006, vol. 22, issue 3, 313-329

Abstract: The Scandinavian welfare states are mature in the sense of having a high level of standards for public provisions of welfare services as well as a high replacement level for income transfers, especially for low-income groups. In this welfare model, individuals have basic rights to welfare services and social transfers independently of their ability to pay, their labour-market history, etc. The financial viability of the model relies on a high tax burden and a high level of labour-force participation for males and females. Evaluated on the basis of international comparisons of income levels and inequality, the model has performed well. In a forward-looking perspective, however, the welfare model faces problems that may put the financial viability of the model at risk. Two important challenges are demographic changes and the so-called growth dilemma (increased demand for services and leisure). We discuss these issues using Denmark as an example and argue that while these two challenges may be of the same order of magnitude, it is easier to propose solutions to the demographic challenges than to the growth dilemma which are consistent with the basic principles of the welfare state. Copyright 2006, Oxford University Press.

Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (6)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
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:oup:oxford:v:22:y:2006:i:3:p:313-329

Access Statistics for this article

Oxford Review of Economic Policy is currently edited by Christopher Adam

More articles in Oxford Review of Economic Policy from Oxford University Press and Oxford Review of Economic Policy Limited
Bibliographic data for series maintained by Oxford University Press ().