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Research quoted in the Economist

2018-07-14


Economist writes about the welfare state of tomorrow, today and int he future and finds that the criticisms are growing, both right and left: "On the right, critics accuse it of sucking the dynamism from capitalism and individuals alike." The left, as seen in the grainy nostalgia [...] lays claim to the welfare state as a left-wing creation, and thinks it is under unceasing threat." Economist states that "It is not so much a left-wing creation as a product of an intellectual coalition, in which the critical strand was liberalism". And, the article refers to research by Andreas Bergh and Magnus Henrekson, IFN.

Economist writes: "Another misunderstanding is about how welfare spending relates to economic growth. As countries become wealthier, public spending increases as a share of GDP (see chart 2). Spending on “social protection” (pensions, benefits and the like) in the OECD club of countries has increased from 5% in the 1960s to 15% in 1980 to 21% in 2016. In a paper published in 2011, two economists, Andreas Bergh and Magnus Henrekson, estimated that a ten-percentage-point increase in the size of the state in rich countries is associated with a fall in the annual rate of GDP growth of 0.5 to one percentage point."

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