Taxation, welfare and the crisis of unemployment in Europe

Book abstract:

The impact of European tax and benefit systems on incentives to create and take up jobs is analysed in this book which aims to explain the complex trade-offs involved and the tough choices facing European policymakers in the reform of these systems.

The book is divided into four distinct parts. Part one establishes the basic issues involved in the trade off between equity and efficiency such as the redistribution of net income through taxes and transfers and the variation in marginal tax rates. Part two discusses the burden of taxation and the generosity of the welfare systems in Europe. The effects of tax and welfare reforms and how they may be evaluated are examined in part three with reference to three evaluation methods - the quasi experimental approach, the natural experiment approach and the discrete choice structural approach. There is also an analysis of the labour supply effects of tax reforms in Sweden in the 1980s and 1990s. Part four examines the general equilibrium effects with a case study of the policy changes that took place in the Netherlands in the 1980s and a second chapter which explores the tax solutions to skill-biased technical progress combined with firm relative wages - seen as a major cause of European unemployment.

This book provides a thorough institutional and theoretical analysis of this specific sector of European policy-making, highlighting the key problems involved in reforming European tax and benefit systems as well as suggesting possible ways to improve efficiency. Policymakers and scholars of European welfare and labour market policies will therefore find this book useful.