Welfare state and social Europe

Alberto Alesina, Armando Miano, Stefanie Stantcheva, 31 July 2018

The debate on immigration is often based on misperceptions about the number and character of immigrants. The column uses data from surveys in six countries to show that such misperceptions are striking and widespread. The column also describes how an experiment in which people were encouraged think about their perception of immigrants made them more averse to redistribution in general, suggesting that the focus on immigration in the political debate – without correcting the misperceptions respondents have about immigrants – could have the unintended consequence of reducing support for redistribution.

Pierre Cahuc, Francis Kramarz, Sandra Nevoux, 16 July 2018

Short-time work programmes aim to preserve jobs at firms that are experiencing temporarily low revenues, for example during a recession. This column assesses how the short-time work programme implemented in France during the Great Recession affected employment. Results confirm that the programme saved jobs and increased hours worked, and that participating firms recovered faster than non-participating firms. 

Assaf Razin, Efraim Sadka, 08 July 2018

Financial globalisation triggers tax competition among countries and the possibility of a ‘race to the bottom'. This can chip away at the domestic tax base, and the reallocation of international capital is likely to result in the downscaling of the scope and size of redistribution under the welfare state. This column argues, however, that even a reduced welfare state can still act as a device to compensate the losers from financial globalisation losers in a Pareto-improving way. 

Francesca Carta, Lucia Rizzica, 26 June 2018

A growing number of advanced economies are opting for highly subsidised childcare systems. But studies have shown mixed effects of subsidised childcare on children’s outcomes, suggesting a potential trade-off between promoting female labour supply and providing the best care for children. This column shows that an expansion of subsidised childcare in Italy increased female labour supply without hurting children’s outcomes. Childcare could be made more cost-effective by making it conditional on the mother’s employment status, or incentivising firms to provide corporate childcare options.

Charles Goodhart, Michael Hudson, 11 June 2018

The increasing income and wealth inequalities within countries is one of today’s great social concerns. This column describes how the tendency towards increasing indebtedness in much earlier societies was held in check by debt-cancellation Jubilees, and discusses ways to deal with today’s debt overhang and accompanying wealth inequalities. The funding of a modern Jubilee could come mostly, perhaps entirely, from a land/or property tax.

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