TY  - JOUR
AU  - Rosen, Sherwin
TI  - Public Employment, Taxes and the Welfare State in Sweden
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5003
PY  - 1995
Y2  - January 1995
DO  - 10.3386/w5003
UR  - http://www.nber.org/papers/w5003
L1  - http://www.nber.org/papers/w5003.pdf
N1  - Author contact info:
Sherwin Rosen
Department of Economics University of Chicago
1126 East 59th Street
Chicago, IL   60637
Tel: 312-702-8166
M1  - published as Sherwin Rosen. "Public Employment, Taxes, and the Welfare State in Sweden," in Richard B. Freeman, Robert Topel, and Birgitta Swedenborg, editors, "The Welfare State in Transition: Reforming the Swedish Model" University of Chicago Press (1997)

AB  - All employment growth in Sweden since the early 1960's is attributable to labor market entry of women, working in local public sector jobs that implement the Welfare State.  Sweden has 'monetized' or 'nationalized' the family.  Women are paid at public expense to provide household services for other families.  Subsidizing purchased household services encourages labor force participation of women through substitution of market- for self-provided services.  It also reduces the marginal cost prices of household goods and encourages substitution of household goods for material goods.  A kind of social cross-hauling occurs: when subsidies are increased and taxes raised to finance them, production of material goods declines and production of household goods increases.  Women enter the market and work more in each other's households and less in the material goods sector. Efficiency distortions of current child policies in Sweden may be as large as half of total expenditures on childcare.  The current 90% subsidies to public childcare probably involve large deadweight losses.  A one percent decline in the rate of subsidy accompanied by balanced budget tax decreases would reduce the deadweight losses of tax distortions by one percent, at current policy levels.
ER  -