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The Welfare State in EuropeEconomic and Social Perspectives$
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Pierre Pestieau and Mathieu Lefebvre

Print publication date: 2018

Print ISBN-13: 9780198817055

Published to Oxford Scholarship Online: September 2018

DOI: 10.1093/oso/9780198817055.001.0001

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Social Protection and Globalization

Social Protection and Globalization

(p.61) 6 Social Protection and Globalization
The Welfare State in Europe

Pierre Pestieau

Mathieu Lefebvre

Oxford University Press

In this chapter we discuss two basic ideas. The first one is that technological change as much as (if not more than) globalization leads to increasing income disparities; accordingly, European unemployment is caused by attempts at fighting these inequalities. The second one is that globalization, and specifically factor mobility, make it difficult for national governments to conduct any redistributive policy, thus leading to what is sometimes called ‘race to the bottom’, or ‘social dumping.’ We show that up to now there are no clear signs of social dumping even though the increasing use of tax heavens and posted workers indicates that the threat is real.

Keywords:   HDI (human development index), OMC (Open Method of Coordination), posted workers, prisoner’s dilemma, profit shifting, race to the bottom, social dumping, tax competition yardstick competition

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