Changing tides for the welfare state

It has turned out to be difficult to adjust welfare-state arrangements to new circumstances. This paper emphasizes developments in the labor market and changes in the structure and preference of the family. The former include changes in demography, productivity growth and international linkages as well as increased part-time work, new types of labor-market contracts and tendencies toward an "insider-outsider divide" in the labor market. Changes in family structure include a rise in female labor-force participation, a decline in family stability, more variation in individual life cycles and increased individualization of values and life styles. A number of alternative welfare-state reforms are also considered.