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The Decline of the Welfare State : Demography and Globalization - Assaf Razin

The Decline of the Welfare State

Demography and Globalization

By: Assaf Razin, Efraim Sadka, Chang Woon Nam (Contribution by), Clemens Fuest (Editor)

Hardcover Published: 21st January 2005
ISBN: 9780262182447
Number Of Pages: 144
For Ages: 18+ years old

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In The Decline of the Welfare State, Assaf Razin and Efraim Sadka use a political economy framework to analyze the effects of aging populations, migration, and globalization on the deteriorating system of financing welfare state benefits as we know them. Their timely analysis, supported by a unified theoretical framework and empirical findings, demonstrates how the combined forces of demographic change and globalization will make it impossible for the welfare state to maintain itself on its present scale.In much of the developed world, the proportion of the population aged 60 and over is expected to rise dramatically over the coming years -- from 35 percent in 2000 to a projected 66 percent in 2050 in the European Union and from 27 percent to 47 percent in the United States -- which may necessitate higher tax burdens and greater public debt to maintain national pension systems at current levels. Low-skill migration produces additional strains on welfare-state financing because such migrants typically receive benefits that exceed what they pay in taxes. Higher capital taxation, which could potentially be used to finance welfare benefits, is made unlikely by international tax competition brought about by globalization of the capital market. Applying a political economy model and drawing on empirical data from the EU and the United States, the authors draw an unconventional and provocative conclusion from these developments. They argue that the political pressure from both aging and migrant populations indirectly generates political processes that favor trimming rather than expanding the welfare state. The combined pressures of aging, migration, and globalization will shift the balance of political power and generate public support from the majority of the voting population for cutting back traditional welfare state benefits.

Industry Reviews

"Combining analytical precision and policy relevance, this book makes a fundamental contribution to a topic of critical importance for the future of advanced democracies"--Guido Tabellini, Professor of Economics, Bocconi University

Prefacep. vii
Overviewp. 1
Political Economics
Aging, Migration, and the Widening Wage Gapp. 9
Migration and the Welfare Statep. 39
Balanced-Budget Rules and the Downscaling of the Welfare Statep. 47
The Capital-Tax-Financed Welfare Statep. 61
Aging and the Welfare State: Empirical Evidencep. 75
Capital Taxation: The Shadow of International Tax Competitionp. 89
The Downward Convergence of Capital Taxation across Countries: Evidence from the European Unionp. 107
Notesp. 113
Referencesp. 121
Indexp. 127
Table of Contents provided by Publisher. All Rights Reserved.

ISBN: 9780262182447
ISBN-10: 0262182440
Series: CESifo Book Series
Audience: Professional
For Ages: 18+ years old
Format: Hardcover
Language: English
Number Of Pages: 144
Published: 21st January 2005
Publisher: MIT Press Ltd
Country of Publication: US
Dimensions (cm): 22.9 x 15.2  x 2.5
Weight (kg): 0.36