The expansion of welfare-state arrangements is seen as the result of dynamic interaction between market behaviour and political behaviour, often with considerable time lags, sometimes generating either virtuous or vicious circles. Such interaction may also involve induced (endogenous) changes in...

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 preferences of the family. The former include changes in demography, productivity growth and international linkages...

The paper discusses a number of threats to the financial sustainability of social spending: increased internationalization of national economies, gradually higher relative costs of producing a number of human services, the "graying" of the population, slower productivity growth in the private...

In response to the Covid-19 pandemic, governments around the world have provided a massive fiscal and monetary stimulus. While this policy is welcome in the short run, it does not address the underlying problem in the medium and long run. The reason is that the pandemic has not given rise to a...

The paper analyses the interaction between economic incentives and work norms in the context of social insurance. If the work norm is endogenous in the sense that it is weaker when the population share of beneficiaries is higher, then voters will choose less generous bene.ts than otherwise. We...

Children who can count on support from altruistic parents may not try hard to succeed in the labor market. Moreover, parental altruism makes withdrawal of such support non-credible. To promote work effort, parents may want to instill norms which later cause their children to experience guilt or...

Macroeconomic Dynamics commissioned this interview with Assar Lindbeck for a series of such conversations with economists, starting with Duncan Foley’s interview with Wassily Leontief in 1998. Other interviews in the series include Ben McCallum’s interview with Robert Lucas (1999), Olivier...