Print page

Digitalization, Immigration and the Welfare State

Mårten Blix, Research Institute of Industrial Economics, Sweden
The Swedish welfare state finds itself in the middle of two major upheavals: The impact of technology and immigration. Having taken in more refugees per capita than most other countries, the pillars of the welfare state are being shaken. Digital technologies are set to strengthen already existing trends towards job and wage polarization. This book explores how these trends are more pronounced due to the rigidity of the labor market and the comprehensiveness of tax-financed welfare services.
Extent: 200 pp
Hardback Price: $110.00 Web: $99.00
Publication Date: 2017
ISBN: 978 1 78643 294 0
Availability: In Stock
$0.00

Buy the E-book

Join our mailing list

  • Economics and Finance
  • Austrian Economics
  • Economics of Innovation
  • Political Economy
  • Social Policy and Sociology
  • Economics of Social Policy
  • Migration
The modern welfare state finds itself in the middle of two major upheavals: the impact of technology and immigration. Having taken in more refugees per capita than most other countries, the pillars of the Swedish welfare state are being shaken, and digital technologies are set to strengthen already existing trends towards job and wage polarization. The development of skills to keep pace with technology will enter into a critical period for the labor market in which inadequate policy responses could result in further inequality and polarization. In this regard, a platform-based labor market could help by opening up a vast range of new work opportunities.

Mårten Blix examines the implications of these trends that drive change in developed economies and, in particular, the impact that they have on Sweden and other European countries with rigid labor markets and comprehensive tax-financed welfare services. Increasing costs from immigration and rising inequality could further reduce the willingness to pay high taxes and erode support for redistribution. Failure to address challenges like this one could herald much more drastic changes further down the road. There are already signs of economic and political tensions and there is a risk that the social contract could crack.

This new discussion on the future of work and the welfare state will be of interest not only to scholars but in policy circles and corresponding societies in sociology, labor relations, political science, and public administration.
‘Using the economic and social laboratory of Sweden, Mårten Blix provides a fascinating window into the future of the welfare state with the threats and opportunities from a massive increase in immigration and rapid digitilisation of the economy. The Swedish Model’s core features of collective bargaining, broad unionisation and a strong fiscal base are eroding, increasing inequality and challenging the legitimacy of the political consensus to date. His interesting observations and balanced analysis of the growing importance of platform-based jobs and life-long learning have implications much beyond Sweden.’
– Professor Erik Berglöf, London School of Economics, UK

‘The famous Swedish Model of the welfare state is at a turning point as the pressures of technological change, income inequality and high levels of immigration meet the constraints of the country's inflexible labour and housing markets. Mårten Blix argues in this incisive book that, with its sound public finances and high levels of trust, Sweden is well placed to respond to the pressures, and he describes a route through these challenges; but it will require some profound institutional changes. The Swedish Model of the future will have to look very different if it is to succeed.’
– Diane Coyle, University of Manchester, UK
Contents: Preface 1. A Perfect Storm 2. The Welfare State in Transition 3. The Labor Market in Transition 4. Digitalization Changing the Economy and the Labor Market 5. Fiscal Pressures from Digitalization and Immigration 6. Immigration, Inequality and Skills in the Digital Economy 7. Future Challenges for the Welfare State Index