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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/19058
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| Title: | | Sustainable social spending  |
| Authors: | | Lindbeck, Assar |
| Issue Date: | | 2005 |
| Series/Report no.: | | CESifo working papers 1594 |
| Abstract: | | 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 sector, low employment rates, and various types of disincentive effects related to the welfare state itself, including moral hazard. I argue that threats from gradually rising costs of providing human services and disincentive effects of welfare-state arrangements, in particular moral hazard and benefit dependency, are more difficult to deal with than the other threats. I also discuss the choice between ad hoc policy reforms and automatic adjustment mechanisms, delegated to administrative bodies, for dealing with these threats. |
| Subjects: | | sustainable fiscal policy Baumol?s disease moral hazard automatic adjustment mechanisms |
| JEL: | | H53 E62 H31 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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