
Contents
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Introduction Introduction
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The Impact of Larger Welfare States on Economic Growth The Impact of Larger Welfare States on Economic Growth
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The Employment Consequences of Larger Welfare States The Employment Consequences of Larger Welfare States
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Macroeconomic Outcomes after The Great Recession Macroeconomic Outcomes after The Great Recession
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Conclusion Conclusion
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References References
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42 Macroeconomic Outcomes
Get accessIsabela Mares is Arnold Wolfers Professor of Political Science at Yale University. She is the author of Protecting the Ballot: How First-Wave Democracies Ended Electoral Corruption (Princeton University Press 2022), From Open Secrets to Secret Voting: Democratic Electoral Reforms and Voter Autonomy (Cambridge University Press 2015) and Conditionality and Coercion: Electoral Clientelism in Eastern Europe (Oxford University Press 2018), co-authored with Lauren Young.
Christopher Pierson is Professor Emeritus of Politics at the University of Nottingham.
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Published:08 December 2021
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Abstract
This chapter examines the consequence of larger welfare states on two macroeconomic outcomes: growth and employment. Much of the standard neoclassical literature predicts that large welfare states will necessarily have negative consequences for both growth and employment. This is not borne out by the empirical evidence. In part, this is because some welfare state measures, on education and health care, for example, have positive externalities in the wider economy. It also seems that national experience varies with differing institutional contexts, especially in relation to wage-bargaining institutions. After 2008, this argument played out in differing views about ‘austerity’, some suggesting that it was necessary to re-establish growth, with others dismissing it as a sort of economic primitivism.
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