The Finnish Welfare State at the Turn of the Millennium. VATT Yearbook 1999.
Hjerppe, Reino; Voipio, Iikko; Ilmakunnas, Seija (2000-11-08)
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Hjerppe, Reino
Voipio, Iikko
Ilmakunnas, Seija
Valtion taloudellinen tutkimuskeskus VATT
08.11.2000
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi-fe2018042618658
https://urn.fi/URN:NBN:fi-fe2018042618658
Tiivistelmä
The VATT research programme for 1997-1999 examined the structural factors of the public economy that influence the present state of the Finnish welfare state and its future prospects. The central task was to assess how a system widely approved of by the Finns copes from the perspective of the economy.
It is important to people what forms of services and income distribution the welfare and income equalisation system produces. For the future of the system it is essential to understand the premises for functioning that the public domain creates for firms and citizens. The task of the research was thus to unearth facts and analyse the impacts of different systems - their advantages and defects - and thereby to create the basis for discussions and decision-making.
At the end of the1990s the public economy has been stabilised with the help of vigorous economic growth and expenditure cuts. The VATT research programme analysed, among other things, the impacts of taxation on employment. Questions surrounding the incentive effects of income transfers and the efficiency of public service production were also addressed. Other central issues were regional development, impacts of economic infrastructures and reforms of the public sector.
The research findings reveal that the Finnish model for a welfare society is surprisingly competitive, although not without its failings, too. Future burdens will include interest payables from the public debt. The current level of debt is a consequence of the economic crisis of the early 1990s, with a major factor being the loans taken to attenuate income losses caused by unemployment. Another reason is that part of the benefits from public expenditure investments will take years to materialise. Thus it is reasonable that some of the costs are paid when the gains emerge. In this way the high tax burden, currently a source of some concern, will be dissipated fairly among the different generations.
The public economy and welfare state face numerous challenges and threats in the years ahead. These must be prepared for by continuing to research the structural problems related to the public economy and the economy as a whole.
It is important to people what forms of services and income distribution the welfare and income equalisation system produces. For the future of the system it is essential to understand the premises for functioning that the public domain creates for firms and citizens. The task of the research was thus to unearth facts and analyse the impacts of different systems - their advantages and defects - and thereby to create the basis for discussions and decision-making.
At the end of the1990s the public economy has been stabilised with the help of vigorous economic growth and expenditure cuts. The VATT research programme analysed, among other things, the impacts of taxation on employment. Questions surrounding the incentive effects of income transfers and the efficiency of public service production were also addressed. Other central issues were regional development, impacts of economic infrastructures and reforms of the public sector.
The research findings reveal that the Finnish model for a welfare society is surprisingly competitive, although not without its failings, too. Future burdens will include interest payables from the public debt. The current level of debt is a consequence of the economic crisis of the early 1990s, with a major factor being the loans taken to attenuate income losses caused by unemployment. Another reason is that part of the benefits from public expenditure investments will take years to materialise. Thus it is reasonable that some of the costs are paid when the gains emerge. In this way the high tax burden, currently a source of some concern, will be dissipated fairly among the different generations.
The public economy and welfare state face numerous challenges and threats in the years ahead. These must be prepared for by continuing to research the structural problems related to the public economy and the economy as a whole.
Tutkimusteema
Economic growth, Taloudellinen kasvu, Macroeconomic policy, Talouspolitiikka, Taxation and Social Transfers, Julkisen talouden rahoitus ja tulonsiirrot
JEL
A300 - Multisubject Collective Works: General, E000 - Macroeconomics and Monetary Economics: General, H000 - Public Economics: General, R000 - Urban, Rural, and Regional Economics: General
Avainsanat
regional development, EMU, welfare services, welfare state, infrastructure, integration, public economy, incentives, municipality, economic stability, income distribution, employment, taxation