Social Policy and Productivity: Anybody Here See Any Levers?

William Watson

A chapter in The Review of Economic Performance and Social Progress 2002: Towards a Social Understanding of Productivity, 2002, vol. 2 from Centre for the Study of Living Standards, The Institutute for Research on Public Policy

Abstract: In this chapter, William Watson challenges Heath's interpretation of the benefits of productivity growth, but agrees with Richard Harris' views on the state of our knowledge about the potential contribution of social programs to productivity growth. Watson tackles Heath's assessment of the social benefits of productivity growth directly, starting with the issues of social inequality and poverty. He argues that there has been no flagging in redistributive effort in Canada and he challenges what he sees as Heath's preference for enhancing public expenditures, emphasizing the scope for government failures and of the possibility that higher tax rates in the contemporary period have increased the marginal cost of public funds. Even if one were able to resolve the question of the appropriate balance between the public and private sectors, Watson believes that the case for higher productivity would remain compelling. Without powerful analytical guidance, Watson concludes that reform of social policy will inevitably be guided primarily by intuition, politics and hunches. In these circumstances, he counsels modesty in aspirations.

Keywords: Equity; Efficiency; Productivity; Labour Productivity; Labor Productivity; Growth; Income; Inequality; Equality; Social Policy; Happiness; Poverty; Leisure; Government; Investment; Fairness; Spending; Government Spending; Government Expenditure; Expenditure; Taxes; Tax; Quality of Life (search for similar items in EconPapers)
JEL-codes: D63 H51 H52 I38 J24 O47 (search for similar items in EconPapers)
Date: 2002
ISBN: 0-88645-198-1
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