The struggle between equity and efficiency: do Nordic countries have a free lunch?

Norbert Berthold and Alexander Brunner

No 103, Discussion Paper Series from Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy

Abstract: Although there is a vast theoretical literature on the existence of a tradeoff between equity and efficiency, empirical investigations often fail to find evidence for this proposition. Furthermore there are hints that some social models in Europe can cope better with this trade-off and are actually able to provide what economists call a free lunch. In this paper we use data from the Luxembourg Income Studies (LIS) to evaluate (a) whether there really exists something like a free lunch and (b) whether some social systems are actually better in coping with the trade-off between equity and efficiency.

Keywords: equity; efficiency; tradeoff; welfare states (search for similar items in EconPapers)
JEL-codes: D61 D63 (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wuewwb:103

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