Abstract
European welfare states are under pressure due to aging, skill-biased technological change, globalisation and increasing heterogeneity (migration, work and cohabitation patterns). Indeed, the demand for public spending on pensioners and education increases, redistribution toward low skilled workers rises and taxation and income redistribution are becoming more distortionary as individuals can more easily adapt their behaviour to government policies. At the same time, welfare states are increasingly blamed for sustained inactivity among benefit recipients, elderly workers, lowskilled individuals, and women. In light of these developments and trends, the Network for Studies on Pensions, Aging and Retirement (Netspar), CPB Netherlands Bureau for Economic Policy Analysis and the Dutch Social Economic Council organised a conference on ‘Reinventing the Welfare State’, from which this special issue contains five papers. The first paper explores how globalisation interacts with European welfare states. The next two papers deal with the relationship between current welfare state designs in Europe and their economic outcomes, with an emphasis on the Scandinavian countries. The final two papers analyse specific options for welfare state reform.
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