The European 'Welfare Mix': Institutional Configuration and Distributive Outcome in Sweden and the European Union. A Longitudinal and Comparative Perspective

This paper explores the institutional configuration (the three welfare delivery systems: market, welfare state, family) and its distributional correlates (income inequality; poverty rates; inequality related to social cleavages such as social class, generation, gender, region and family). The analysis has a twofold perspective: comparative (comparing 14 EU member states) and longitudinal (comparing Sweden 1975--1995), using nations as statistical units. The European union appears to be divided in three distinct and homogeneous clusters: a Nordic cluster (Sweden, Denmark, Finland) exhibiting large social expenses, high labour market participation and weak family ties. Its distributional features are low income inequality, poverty rates and class inequality, but high levels of inequality between generations; a southern cluster (Greece, Italy, Spain, Portugal) characterised by lower welfare provisions, low employment, but strong traditional families. Its distributional features are high levels of income inequality, poverty and class inequality, but low levels of generational inequality; a central European cluster in intermediate position. UK joins the southern cluster with high levels of income inequality, poverty and class inequality.     

Government fragmentation and suburban services: The equality of consumer choice

The predominant reform tradition of centralizing suburban government to deal with problems of inequality in the distribution of local services has been attacked recently by a new school of thought often labelled New Political Economists. This school believes that the existing structure of local government can maximize citizen choice by allowing citizens to shop around between the level and mix of public goods and services offered by alternate communities. The term polycentricity has been coined to describe this situation. Critics of polycentricity believe that the resulting quasi-market would be unfair to low and moderate income suburbanites. This paper examines the actual extent of choice in service levels available to different income groups located in the suburban ring of six metropolitan areas. The extent of inequality in choice between different income groups is measured and the implications of these findings for the conflict between polycentric and centralizing reformers is discussed.The research reported in this paper was funded by the National Science Foundation, Grant Number SOC7705600     

The demographics of inequality

This paper presents a survey of recent literature on the effects of demographic variables on economic inequality. First, a number of conceptual and methodological questions are raised and discussed. They pertain to what is meant by inequality, what the range of demographic variables is, and how variable and endogenous are the demographic variables most widely used.The paper then turns to a review of empirical works on the distributive incidence of the following demographic variables: baby boomers entering the job market, aging population, variable fertility and mortality rates, internal and external migrations, divorce and widowhood, and finally donations and bequests. It appears that a lot of caution is needed when assessing the incidence of any demographic variable changing the size of the population because in this case standard inequality measures yield conflicting signals.Presidental address delivered at the second meeting of the European Society for Population Economics, June 23, 1988, Mannheim, FRG. The author is extremely grateful to R. Easterlin, D. Kessler, T. Smeeding, l. Tunali, R. von Weizsäcker, two referees, and the participants in the 1988 Hagen meeting of the Verein für Social politik, Ausschuß Mr Bevölkerungsökonomie, for their comments.     

Earth,the Business of the Future: From Ego Energy to Eco Energy

Just as we have a turn around manager to save a failing business organization, so it is held, we need a turn around perspective to retrieve the Earth from being in a deficit position. Hence the paradoxical emphasis upon the Earth as the business of the future. Two important distinctions are offered which together provide a new frame of reference for bonding the human and the Earth. The initiating event for the first distinction was a business conference whose purpose was to explore the emerging domain of ego energy. In a parallel way, it is proposed we explore the yet to be discovered domain of eco energy. With eco energy we open our narrowed human window to cosmic perception. With cosmic perception, the energy of the universe can flow through us. The second distinction is between looking at and seeing. Looking at refers to treating our world as a collection of objects. As a collection of objects the Earth can be processed as a series of business transactions. With seeing we relate to our world as a communion of subjects. Such seeing offers transforming power for the human and the Earth to engage in the dialogue of powerful listening and speaking on both individual and planetary scale. These two sets of distinctions are sounded like echo chambers against ten ecologically guiding statements. These ten guiding statements become a reality-testing, experiential framework. Such a turn around perspective offers a different vision to be operationalized in our individual, community, and business lives. Then we can see clearly and respond with eco energy to the Earth, the business of the future!     

The role of fertility and population in economic growth: empirical research from aggregate cross-national data

Two recently improved sets of cross-country panel data are combined in order to re-examine the effects of population growth and fertility on economic growth. Using a 107 country panel data set covering 1960-85, we find that high birth rates appear to reduce economic growth through investment effects and possibly through capital dilution, although classic resource dilution is not evident in the data. Most significantly, however, birth rate declines have a strong medium-term positive impact on per capita income growth through labour supply or dependency effects.We are very grateful to Allen Kelley for his careful and thoughtful comments on an earlier version of this paper (Brander and Dowrick 1991) which led to a complete re-estimation of our models using updated primary data and reconstructed secondary data sets. We are also grateful to three anonymous referees for very helpful comments. This research was begun while Brander was a Visiting Fellow at the Department of Economics, Research School of Social Sciences, Australian National University. Revisions were carried out while Dowrick was visiting the Department of Economics, University of Warwick. Research assistance was provided by Tracy Tiong. Financial support from the Social Sciences Research Council of Canada and UBC Centre for International Business Studies is gratefully acknowledged.     

Childhood Family Structure and Intergenerational Income Mobility in the United States

The declining prevalence of two-parent families helped increase income inequality over recent decades. Does family structure also condition how economic (dis)advantages pass from parents to children? If so, shifts in the organization of family life may contribute to enduring inequality between groups defined by childhood family structure. Using National Longitudinal Survey of Youth data, I combine parametric and nonparametric methods to reveal how family structure moderates intergenerational income mobility in the United States. I find that individuals raised outside stable two-parent homes are much more mobile than individuals from stable two-parent families. Mobility increases with the number of family transitions but does not vary with children’s time spent coresiding with both parents or stepparents conditional on a transition. However, this mobility indicates insecurity, not opportunity. Difficulties maintaining middle-class incomes create downward mobility among people raised outside stable two-parent homes. Regardless of parental income, these people are relatively likely to become low-income adults, reflecting a new form of perverse equality. People raised outside stable two-parent families are also less likely to become high-income adults than people from stable two-parent homes. Mobility differences account for about one-quarter of family-structure inequalities in income at the bottom of the income distribution and more than one-third of these inequalities at the top.     

Population in context: A typology of environmental driving forces

This paper presents a typology and qualitative model of causation for use in assessing the relative contributions of population growth to problems of pollution, lost biodiversity, and natural resource depletion. Population growth is placed in context as one of eight key driving forces that shape environmental quality today. It is treated primarily as an impact amplifier, along with technology. Root causes are traced to paradigmatic beliefs—especially anthropocentrism and contempocentrism—which find expression in unsustainable consumption patterns and designs of political economy.     

Living conditions among the poor in four rich countries

The share of income going to the poorest 10% of Americans is much smaller than the share of income going to the poorest 10% of Canadians, Swedes, or Germans (before unification). However, comparisons across countries of the distribution of housing conditions, consumer durables, health, and visits to the doctor and dentist suggest that compared to the average person in their country, low-income Americans are no worse off than low-income residents of other countries. But these conclusions partly depend on how income is adjusted for family size. Americans whose incomes are low for a long time may suffer more material deprivation than Canadians whose incomes are low for a long time. Conclusions about economic well-being based on current income may not rank nations the same as comparisons based on deprivation in living conditions.The Joint Center for Political and Economic Studies, The Russell Sage Foundation, the National Science Foundation and a Small Grant from the Institute for Research on Poverty provided funding for various stages of this project. I am indebted to Christopher Jencks and two anonymous reviewers for comments on an earlier draft of this paper. I am also indebted to Larry Radbill who provided computer programing for the United States and Swedish data and valuable technical suggestions. Monica Ardelt provided computer programing and technical assistance for the German data. Johan Fritzel provided technical assistance for the Swedish data and David Rhodes, Karen Rolf, and Tim Veenstra provided computer programing for the Unites States data.     

Household fertility responses following communism: Transition in the Czech Republic and Slovakia

In central Europe fertility fell during transition from centrally planned to market oriented economies. Families reevaluated fertility plans facing new wages, reduced child-care subsidies, and economic uncertainty. Using micro-data from 1984 and 1993 in the Czech Republic and Slovakia, this paper relates fertility changes following Communism to wages, pricesand risks. Earnings have little impact on fertility timing during transition, though age, job uncertainty, and children conceived during Communism do. In the Czech Republic, changed fertility demand parameters account for much of thefall in fertility. In Slovakia a sizable proportion results from predictable responses to changed incentives.I would like to thank my Czech collaborators Pavel Mahonn, Petr Mateju, and Jiri Vecernk for enabling this empirical work to proceed; T. Paul Schultz, and Jenny Hunt and seminar participants at Yale University, the NEUDC, and the Population Association of America annual meetings and two anonymous referees for helpful comments. I am also indebted to the Mellon Foundation Area Studies Grant program for financial support allowing field work on this topic. I am wholly responsible for all errors. Responsible editor: T. Paul Schultz.     

Capital accumulation,endogenous population growth,and Easterlin cycles

In this paper we attempt to explain the occurrence of population cycles in industrialised economies where the birth rate depends on the difference between the actual and the expected consumption rate. This model of an endogenously growing population brings together Easterlin's idea of an adapting aspiration level with the neoclassical optimal growth paradigm. It is shown that in this highly aggregated demo-economic system (i.e., without inclusion of the age structure of a population) swings both in the economic and demographic variables may exist. The reason behind this strange optimal behaviour is identified to be an intertemporal substitution effect between current and future levels of consumption.We wish to thank A. Novak for helpful assistance and an anonymous referee for useful comments. Financial support by the Austrian Science Foundation under contract No. P6601 is acknowledged.     

Which Inequality Makes People Dissatisfied with Their Lives? Evidence of the Link Between Life Satisfaction and Inequalities

This paper aims at establishing a clear link between different types of inequality and life satisfaction in Europe. We analyse the relationship between life satisfaction and both income inequality and inequality of opportunity using seven waves of the European Social Survey. The results show that in Europe both income inequality and inequality of opportunity reduce people’s life satisfaction. Our main results suggest that all socio-economic groups are dissatisfied with income inequality, whereas primarily low socio-economic individuals worry about inequality of opportunity. We find that expected mobility is very important in explaining the link between inequality and life satisfaction for all socio-economic groups in Europe. We advance the hypothesis that life satisfaction is conditioned by a mix of normative arguments against inequality and by the fear/possibility to lose/gain a good social position. This result complements findings on the mediating role of social mobility in the relationship with subjective well-being.     

The Easterlin hypothesis in the recent experience of higher-income OECD countries: A panel-data approach

The Easterlin hypothesis emphasizes the effect of relative cohort size on fertility. Models based on the Easterlin hypothesis have performed well in explaining time series fertility data, although these results have been for long historical time series and have typically been restricted to single country studies. These models are not adequate to determine if the hypothesis still holds and if the success of the Easterlin hypothesis is an artifact of the time period chosen. We use panel data analysis and temporal causality tests to see of the Easterlin hypothesis holds for higher-income OECD countries. The results support the Easterlin hypothesis.All correspondence to Yongil Jeon. An earlier version, The Easterlin hypothesis in OECD countries, was presented at the annual conference of the European society for population economics, Bilbao, Spain, June 2002. We are grateful to two anonymous referees for their helpful comments. The usual caveat applies. Responsible editor: Junsen Zhang.     

Environmental Refugees

There are fast-growing numbers of people who can no longer gain a secure livelihood in their homelands because of drought, soil erosion, desertification, deforestation and other environmental problems. In their desperation, these environmental refugees—as they are increasingly coming to be known and as they are termed in this paper—feel they have no alternative but to seek sanctuary elsewhere, however hazardous the attempt. Not all of them have fled their countries, many being internally displaced. But all have abandoned their homelands on a semi-permanent if not permanent basis, having little hope of a foreseeable return.     

Time Use Survey: The Italian Contribution to the European Programme. Methodological Note.

The design of the diary is an important moment in the preparation of the Time Use survey. The main aspects of the diaries were analysed as part of the Time Use laboratory set up in Italy by the National Statistical Institute (ISTAT) as part of the Multipurpose survey design.In 1995, the European programme called Italy and Sweden for pre-tests, countries chosen especially for their social and cultural differences: the former, a typically Mediterranean European country and the latter with the features of Northern Europe.In 1996, in the period between June and September a pilot survey was carried out.The main goals of the pilot survey was to verify the methodological solutions adopted by the Eurostat working group, following the discussion on the results of the pre-tests carried out in Italy and Sweden.     

Immigration,Welfare Magnets and the Geography of Child Poverty in the United States

This study presents a detailed look at the immigration and internal migration dynamics of child poverty for US States based on the 1990 US census. It assesses the impact of two policy-relevant factors on the migration of poor children across States: (1) the role of high immigration levels as a potential push for native-born and longer-term resident poor children whose parents may be reacting to the economic competition or social costs in high immigration States; and (2) the role of State AFDC benefits as a potential pull for poor children who migrate with their parents to States with higher benefit levels. The results make plain that the interstate migration patterns of poverty children differ from those of nonpoverty children, especially among whites and blacks. Female-headed households show different inter-state migration patterns than those in married-couple households. However, a multivariate analysis which includes standard state-level economic attributes provides more support for an immigration push than for a welfare magnet pull in affecting the inter-state migration of poor children. The findings also show a demographic displacement of poor children occurring in high immigration States where the net out-migration of poor children is more than compensated by larger numbers of new immigrant children in poor families with different demographic attributes. Because of these migration dynamics, the demographic profile of the child poverty population will differ across States, suggesting the need for different strategies toward reducing child poverty at the State level.     

A typology of lifestyles

Lifestyle, currently a popular lay term but not an important construct within the social sciences, is examined briefly. Two studies designed to explore a lifestyle typology using personal projects methodology are reported. In the first study, three distinct lifestyle types were identified among a large community sample. They were tentatively labelled pressured, relaxed, and wishful thinking lifestyles. In the second stuty, these types were replicated for a university student group, with two types of a relaxed lifestyle being revealed.Four lifestyle types were found among those in the university sample reporting high subjective well-being. They were tentatively labelled hedonistic, adventuristic, individualistic, and promethean. A preliminary analysis of a variety of demographic and socioeconomic variables using the four types for the subsample reporting high well-being revealed age and sex differences. Young respondents tended to be assigned to the hedonistic and adventuristic types, while older respondents tended to be assigned to the promethean type. Women tended to be assigned to hedonistic type. The results and some implications for further research are discussed.     

Sexual and Reproductive Strategies Among Serbian Gypsies

This paper deals with a full range of sexual and reproductive behaviors among different tribes of Gypsies in Serbia. The examined traits include rates of fertility, mortality, age distribution, education, crime rates, and parental care. In addition, Gypsy traditions of culturally prescribed sexual behavior are also studied. It is found that Gypsy tribes employ different reproductive strategies, ranging from an extreme, for humans, r (reproductive) strategy to a more typical K (parental) strategy. The reasons bringing about these differences come from the Gypsies' readiness to adjust their behavior and reproduction in order to create the most favorable strategy in a given environment. This paper elucidates and contrasts the more typical r-selected Gypsies with a group of K-selected Gypsies living in a Serbian village.     

Do family caps reduce out-of-wedlock births? Evidence from Arkansas,Georgia, Indiana,New Jersey and Virginia

During the 1990s, 23 states implemented family cap policies as a means to reduce the incidence of out-of-wedlock births among welfare recipients. Using Current Population Survey data from 1989 to 1999, we examine the impact of family cap policies on the birth rates of single, less-educated women with children. We use the first five states that were granted waivers from the Department of Health and Human Services to implement family caps as natural experiments. Specifically, we compare trends in out-of-wedlock birth rates in Arkansas, Georgia, Indiana, New Jersey and Virginia to trends in states that did not implement family caps or any other waivers prior to the Personal Responsibility and Work Opportunity Reconciliation Act. We employ several techniques to increase the credibility of results from our natural experiment, such as the inclusion of multiple comparison groups, controls for differential time trends, and difference-in-difference-in-differences estimators. Our regression estimates generally do not provide evidence that family cap policies reduce the incidence of out-of-wedlock births among single, less-educated women with children.     

Native wage impacts of foreign labor: a random effects panel analysis

Natives often fear labor market competition of foreigners, as they may induce declining wages and rising unemployment as in the case of natives and immigrants being substitutes. However, there is also the potential that they are complements, producing positive wage and employment effects. This issue is examined in a framework with two types of labor, such that low qualified native and immigrant workers (blue collar), although substitutes for one another, are potentially complements to high qualified native workers (white collar). This is thought to accurately reflect the past West German immigration experience. Examining the wage functions of white and blue collar natives in a random effects panel model using a vast sample of micro data, we actually find that foreigners negatively affect the wages of Germans on the whole. Relatively small gains are made by white collar employees with less than 20 years experience, but these are outweighed by the larger negative effects experienced by blue collar employees.We wish to thank Don DeVoretz, Riccardo Faini, Andrea Ichino, and participants at the following 1993 conferences for their valuable comments where drafts of this paper were presented: The Economics of International Migration: Econometric Evidence at the University of Konstanz, Internationale Migration und Arbeitsmarkt der Schweizerischen Gesellschaft fur Statistik und Volkswirtschaftslehre at the University of St. Gallen, Adjustment Policies in Previously Centrally Planned Economies: Which Lessons from Developing Countries Experiences at the University of Brescia, and Congress of the European Society for Population Economics in Budapest. Substantial revisions were made following the valuable suggestions of two anonymous referees and the special issue editor Wolfgang Franz, for which we are grateful.     

The welfare effects of labour force growth with internationally mobile capital

The effects of labour supply growth on the welfare of preexisting destination and non-emigrating source populations are analysed. This growth occurs in open economies where free trade in capital goods is possible. Traditional small economy arguments for population growth rely on the existence of priced though internationally immobile factors. When all factors are freely-traded and population grows naturally the case rests either on market distortions or common property within families. In an integrated world labour growth can lead to capital flight and increasing wage differentials. With international interactions, immigration increases preexisting welfare in destination countries but generally (not always) reduces it for non-emigrants in source countries. Immigration provides efficiency gains to all originally resident in source countries. Natural population growth anywhere promotes efficiency gains everywhere.