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Employment Outcomes in the Welfare State

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  • L. Rachel Ngai
  • Christopher A. Pissarides

Abstract

We examine the implications of tax and subsidy policies for employment in the "three worlds of welfare", Anglo-Saxon, Continental European and Scandinavian. We argue that home production is key to a proper evaluation of the employment outcomes. Anglo-Saxon low-support policies encourage more overall market employment. Continental transfer polilcies encourage more home production in services with close substitutes at home. Scandinavian policies give incentives to move home production in social services to the market but discourage other service activity. We find support for our claims in sectoral employment data for five representative countries, United States, Britain, France, Italy and Sweden.

Suggested Citation

  • L. Rachel Ngai & Christopher A. Pissarides, 2008. "Employment Outcomes in the Welfare State," CEP Discussion Papers dp0856, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp0856
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    Cited by:

    1. Urban Sila, 2009. "Can Family-Support Policies Help Explain Differences in Working Hours Across Countries?," CEP Discussion Papers dp0955, Centre for Economic Performance, LSE.
    2. Christopher A. Pissarides, 2008. "The Labour Market and the Euro," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 2(1), pages 3-9, June.
    3. Sébastien Bock, 2018. "Job Polarization and Unskilled Employment Losses in France," PSE Working Papers halshs-01513037, HAL.
    4. Cavalcanti, Tiago & Corrêa, Márcio, 2010. "Cash Transfers and the Labor Market," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 64(2), June.
    5. Matouschek, Niko & Ramezzana, Paolo & Robert-Nicoud, Frédéric, 2009. "Labor market reforms, job instability, and the flexibility of the employment relationship," European Economic Review, Elsevier, vol. 53(1), pages 19-36, January.
    6. L. Ngai & Roberto Samaniego, 2009. "Mapping prices into productivity in multisector growth models," Journal of Economic Growth, Springer, vol. 14(3), pages 183-204, September.
    7. Tiago Cavalcanti & Márcio Corrêa, 2014. "Cash Transfers to the Poor and the Labor Market: An Equilibrium Analysis," Review of Development Economics, Wiley Blackwell, vol. 18(4), pages 741-762, November.
    8. Andreas Georgiadis, 2008. "Efficiency Wages and the Economic Effects of the Minimum Wage: Evidence from a Low-Wage Labour Market," CEP Discussion Papers dp0857, Centre for Economic Performance, LSE.
    9. Sahana Roy Chowdhury, 2018. "Do the Maids Get a Meager Pie?," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 16(2), pages 589-594, June.

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    More about this item

    Keywords

    welfare state; employment; social services; tax and subsidy; three worlds of welfare;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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