Welfare state and social Europe

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.

Hervé Boulhol, Christian Geppert, 04 June 2018

As we live longer, the associated rise in the old-age dependency ratio puts pressure on pension systems and perhaps our standard of living. The column argues that, on average in the OECD, stabilising the old-age dependency ratio between 2015 and 2050 requires an increase in retirement age of a stunning 8.4 years. This number far exceeds the projected increase in longevity and increases in retirement age driven by pension reforms alone.

Gordon Dahl, Anne Gielen, 29 May 2018

Although an extensive literature has documented intergenerational correlations in welfare receipt, there is little evidence on whether this relationship is causal. Do benefit schemes create a culture of dependency within families? This column finds that children of parents in the Netherlands who were pushed out of disability insurance following a reform were less likely to participate in the programme as adults. The fiscal spillovers from these intergenerational links have a sizable effect on the government’s long-term budget.

Christina Felfe, Rafael Lalive, 20 May 2018

In many societies and for many families, the responsibility for looking after very young children during the day has passed from parents to third-party care providers, prompting a hotly contested debate about the merits of early childcare and how it affects childhood development. This column exploits an expansion of childcare provision in Germany to show that early childcare can be a major contributor to eliminating inequality of opportunity and even lay the foundations for a more productive workforce in the future.

Hamish Low, Costas Meghir, Luigi Pistaferri, Alessandra Voena, 13 May 2018

Changing the terms and rules governing welfare can have substantial effects on employment. This column explores how the imposition of time limits for welfare receipt affected the employment, marriage, and divorce rates of women in the US. As intended by the reform, time limits decreased welfare use and the divorce rate, while increasing employment. Despite this, those women who were worst off prior to the reform are found to be even worse off after it.

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