 From family security to the welfare state: Path dependency of social security on the difference in legal originsEconomic Modelling, 2019, vol. 82, issue C, 280-293 Abstract: We provide a new framework to analyze law and public finance from the perspective of difference in legal origins. The size of the welfare system differs from country to country. The security net provided by the family and other informal institutions also varies. Our two-sector model links these phenomena. We consider two cases of security. The first considers security achieved through intra-household resource redistribution in the traditional sector. The second case considers the welfare state, which taxes the modern sector. Switching from intense family security to an extensive welfare state model enhances growth because state taxation on the modern sector harnesses the potential productivity of the entire economy. In contrast, countries with low levels of family security should transition to a small welfare state model to sustain growth. This finding explains the different trends of welfare benefits in civil law and common law countries. The different sizes of the welfare state have their origins in family law, which differently stipulates family security between civil law and common law countries. Keywords: Law and public finance; Welfare state capacity; Family security; Law origins; Two-sector model (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:82:y:2019:i:c:p:280-293 DOI: 10.1016/j.econmod.2019.01.011 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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