Pension System

The term “pension” is referred to a periodic payment due to an individual’s retirement of the labour market after reaching the age required by the law. In general there are two kinds of pension systems. (Fernandez, 2002).

Paygo System: In this system the state organize on the basis of a compulsory contribution made by the active workers, with which is formed a fund in order to attend the retirement pension of elderly population.

Capitalization system: System based on the personal savings for old age.

We can say that the paygo system means a public system, while the capitalization one suppose a privatization of it. Sigue leyendo

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Healthcare

Despite the fact that in the rate of Total Health Expenditure (Sum of public and private expenditures) the countries that leaded the ranking in 2013 were: The Netherlands, with a 12,9% of its GDP destined to healthcare, France (11,7%), Germany (11,3%) and Belgium (11,2%), all the countries do not keep the same proportion of public expenditure on it. (worldbank database). Sigue leyendo

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Education

Before we start analysing the education, we must point out that most of the researchers agree that  in Nordic countries a culture in favour of the education of quality has been introduced. The society itself as well as public institutions have raised awareness that the great strength they have to face in order to continue growing economically and being able to maintain their system and their quality of life is to have a population (its workforce) as formed as possible so that their productivity is high and entrepreneurship is established in these countries because in them there are some great quality human resources.  (Wallenberg and Persson, 2010) Sigue leyendo

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The difference between public revenues and state expenditure results in deficit or surplus. In this entry we are going to compare this indicator calculating their percentage over  them. Sigue leyendo

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Taxation

As we said, one of the most characteristic features of the Nordic states is the fact that the state is very interventionist in their national economy. One of their forms of action is  through the fiscal policy, which means taxation. The public expenditure above mentioned has to be funded somehow and the normal way is through taxes. In these countries there are high taxation rates, both direct and indirect.

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Public Expenditure

As we said, the Scandinavian countries are undoubtedly the most interventionist economies as their indicators illustrate: Expense[1] 52,77% of their GDP and Tax revenue[2] 44,05% of their GDP. Since the 1930s “universalism, tax financing, and a high level of benefits and services resulted in a massive expansion of the public sector, especially at the level of local government” (Abrahamson, 2006). Sigue leyendo

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NORDIC Welfare State

As it has been already said, the welfare state involves transfers of funds from the state to the society in form of services provided and individual’s benefits as well as high progressive taxation in order to fund its expenditure while reducing income inequality.

The Nordic countries are the most representative area of conformation of the welfare estate. Sigue leyendo

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Historical Evolution

The figure 1 provides a comparative vision of the evolution (from the second middle of the XIX century) of the real product per capita of the Nordic countries compared to the most representative countries from each model described above. Graphic information from which we can extract, at least, five conclusions:

Featured image

Source: Prepared by the author on the basis of data supplied by EUROSTAT Sigue leyendo

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Welfare State Origins

The history of the Welfare State comes from the social, political and economic rise and development of a system in which state and government  play a key and shared role in the countries’ organization, especially in western societies after the World War II. According to the Britannica Online Encyclopaedia the concept “Welfare State” refers to the set of activities carried out by governments for social and redistributive purposes through the state budget. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those unable to avail themselves of the minimal goods and services. (Britannica Online Encyclopedia) Sigue leyendo

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