Social Model
Encyclopedia
A social, or socioeconomic, model, is the value system
associated with the structure of a nation's political economy
. There are no set rules that define a social model, only loose definitions characterized by certain attributes.
, regressive tax
or a progressive tax
system. Most common guiding rule of taxation is to levy taxes by the ability to pay.
can be almost entirely state funded at one extreme, private insurance
-based on the other, or somewhere in between. For example, the United Kingdom
has an almost entirely publicly funded health service, the National Health Service
(NHS), and Canada
offers public health care offered at a provincial
level. Conversely, in the United States
, individuals have to rely on health insurance policies in the event of hospitalization, and a minimal amount of state support for the poorer people exists. Another element can be public transport
, as some countries have nationalized rapid transit systems, while others have privatized them (in the UK for example, public transport has been privatised in Great Britain
but not in Northern Ireland
).
approach to employment will do nothing to provide job security. Other countries will rely on some degree of regulation
to protect workers from arbitrary firings. A high degree of regulation such as expensive severance fees is often cited reason for making employers reluctant to hire and causing unemployment.
and Ireland
, the Anglo-Saxon
tend to have a welfare state
of roughly average size, relative to high-income
OECD countries, but less comprehensive than those in Scandinavia
and much of continental Europe. They have somewhat more poverty and higher inequality. Despite having a smaller welfare state than most Western European countries, the UK, Ireland and Canada do provide, among other things, universal single payer health care, redistribute income and guarantee an income at subsistence level.
, France
, Germany
, Belgium
and Luxembourg
, the Continental model has strict rules on job protection and a large amount of regulation in industry
. However, the labour market has proven to be inflexible and slow to react to globalization
. Generous insurance-based unemployment benefits and a well funded welfare state are used to reduce poverty and provide high quality health care. This model can generally be seen as middle ground between the Anglo-Saxon and Nordic model.
, Spain
, Greece
, Portugal
, the Mediterranean model is similar to the Continental model, but focuses welfare on generous state-pensions. The labour market is inflexible with the same job protectionism as in the Continental model, but is not good at reducing poverty within the lower end of society.
, Sweden
, Denmark
, Iceland
, Finland
but some include the Netherlands
, also called 'Nordic corporatist' model because of strong influence of the corporatist
elements such as labor unions and employers' organization
s, advocates a highly developed and government-funded welfare state which provides generous unemployment benefits among other resources for the general public. Labor markets are kept mobile with easy firing and hiring, and government taking care of those laid off with unemployment benefits and retraining. The equality of the Nordic model is achieved through progressive taxation. As a result of the policy, Sweden, Denmark and Norway have the lowest income disparities in the world. Nordic countries have been enjoying high economic and productivity growth, but most remarkably they conquer consistently top spots in world happiness surveys
.
Value system
A value system is a set of consistent ethic values and measures used for the purpose of ethical or ideological integrity. A well defined value system is a moral code.-Personal and communal:...
associated with the structure of a nation's political economy
Political economy
Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...
. There are no set rules that define a social model, only loose definitions characterized by certain attributes.
Taxation
How the state taxes the people, be it a flat taxFlat tax
A flat tax is a tax system with a constant marginal tax rate. Typically the term flat tax is applied in the context of an individual or corporate income that will be taxed at one marginal rate...
, regressive tax
Regressive tax
A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. "Regressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from high to low, where the average tax rate exceeds the...
or a progressive tax
Progressive tax
A progressive tax is a tax by which the tax rate increases as the taxable base amount increases. "Progressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from low to high, where the average tax rate is less than the marginal tax rate...
system. Most common guiding rule of taxation is to levy taxes by the ability to pay.
Social insurance
How the state implements benefits for the unemployed, pensions, maternity and paternity leave and disabilities.Public services
Services such as health careHealth care
Health care is the diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in humans. Health care is delivered by practitioners in medicine, chiropractic, dentistry, nursing, pharmacy, allied health, and other care providers...
can be almost entirely state funded at one extreme, private insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
-based on the other, or somewhere in between. For example, the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
has an almost entirely publicly funded health service, the National Health Service
National Health Service
The National Health Service is the shared name of three of the four publicly funded healthcare systems in the United Kingdom. They provide a comprehensive range of health services, the vast majority of which are free at the point of use to residents of the United Kingdom...
(NHS), and Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
offers public health care offered at a provincial
Province
A province is a territorial unit, almost always an administrative division, within a country or state.-Etymology:The English word "province" is attested since about 1330 and derives from the 13th-century Old French "province," which itself comes from the Latin word "provincia," which referred to...
level. Conversely, in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, individuals have to rely on health insurance policies in the event of hospitalization, and a minimal amount of state support for the poorer people exists. Another element can be public transport
Public transport
Public transport is a shared passenger transportation service which is available for use by the general public, as distinct from modes such as taxicab, car pooling or hired buses which are not shared by strangers without private arrangement.Public transport modes include buses, trolleybuses, trams...
, as some countries have nationalized rapid transit systems, while others have privatized them (in the UK for example, public transport has been privatised in Great Britain
Great Britain
Great Britain or Britain is an island situated to the northwest of Continental Europe. It is the ninth largest island in the world, and the largest European island, as well as the largest of the British Isles...
but not in Northern Ireland
Northern Ireland
Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...
).
Employment
Economies with a more laissez-faireLaissez-faire
In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies....
approach to employment will do nothing to provide job security. Other countries will rely on some degree of regulation
Regulation
Regulation is administrative legislation that constitutes or constrains rights and allocates responsibilities. It can be distinguished from primary legislation on the one hand and judge-made law on the other...
to protect workers from arbitrary firings. A high degree of regulation such as expensive severance fees is often cited reason for making employers reluctant to hire and causing unemployment.
Anglo-Saxon
Used by the UKUnited Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
, the Anglo-Saxon
Anglo-Saxons
Anglo-Saxon is a term used by historians to designate the Germanic tribes who invaded and settled the south and east of Great Britain beginning in the early 5th century AD, and the period from their creation of the English nation to the Norman conquest. The Anglo-Saxon Era denotes the period of...
tend to have a welfare state
Welfare state
A welfare state is a "concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those...
of roughly average size, relative to high-income
High income country
A high-income economy is defined by the World Bank as a country with a Gross National Income per capita of $12,196 USD or more in 2009. While the term "high income" is often used interchangeably with "First World" and "developed country", the technical definitions of these terms differ...
OECD countries, but less comprehensive than those in Scandinavia
Scandinavia
Scandinavia is a cultural, historical and ethno-linguistic region in northern Europe that includes the three kingdoms of Denmark, Norway and Sweden, characterized by their common ethno-cultural heritage and language. Modern Norway and Sweden proper are situated on the Scandinavian Peninsula,...
and much of continental Europe. They have somewhat more poverty and higher inequality. Despite having a smaller welfare state than most Western European countries, the UK, Ireland and Canada do provide, among other things, universal single payer health care, redistribute income and guarantee an income at subsistence level.
Continental European
Used by AustriaAustria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, Belgium
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
and Luxembourg
Luxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...
, the Continental model has strict rules on job protection and a large amount of regulation in industry
Industry
Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...
. However, the labour market has proven to be inflexible and slow to react to globalization
Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...
. Generous insurance-based unemployment benefits and a well funded welfare state are used to reduce poverty and provide high quality health care. This model can generally be seen as middle ground between the Anglo-Saxon and Nordic model.
Mediterranean
Used by ItalyItaly
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
, Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
, Greece
Greece
Greece , officially the Hellenic Republic , and historically Hellas or the Republic of Greece in English, is a country in southeastern Europe....
, Portugal
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...
, the Mediterranean model is similar to the Continental model, but focuses welfare on generous state-pensions. The labour market is inflexible with the same job protectionism as in the Continental model, but is not good at reducing poverty within the lower end of society.
The Nordic Model
The Nordic Model, mainly refers to Nordic countries NorwayNorway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
, Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
, Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
, Iceland
Iceland
Iceland , described as the Republic of Iceland, is a Nordic and European island country in the North Atlantic Ocean, on the Mid-Atlantic Ridge. Iceland also refers to the main island of the country, which contains almost all the population and almost all the land area. The country has a population...
, Finland
Finland
Finland , officially the Republic of Finland, is a Nordic country situated in the Fennoscandian region of Northern Europe. It is bordered by Sweden in the west, Norway in the north and Russia in the east, while Estonia lies to its south across the Gulf of Finland.Around 5.4 million people reside...
but some include the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
, also called 'Nordic corporatist' model because of strong influence of the corporatist
Corporatism
Corporatism, also known as corporativism, is a system of economic, political, or social organization that involves association of the people of society into corporate groups, such as agricultural, business, ethnic, labor, military, patronage, or scientific affiliations, on the basis of common...
elements such as labor unions and employers' organization
Employers' organization
An employers' organization, employers' association or employers' federation is an association of employers. A trade union, which organizes employees is the opposite of an employers' organization...
s, advocates a highly developed and government-funded welfare state which provides generous unemployment benefits among other resources for the general public. Labor markets are kept mobile with easy firing and hiring, and government taking care of those laid off with unemployment benefits and retraining. The equality of the Nordic model is achieved through progressive taxation. As a result of the policy, Sweden, Denmark and Norway have the lowest income disparities in the world. Nordic countries have been enjoying high economic and productivity growth, but most remarkably they conquer consistently top spots in world happiness surveys
Satisfaction with Life Index
The Satisfaction with Life Index was created by Adrian G. White, an Analytic Social Psychologist at the University of Leicester, using data from a metastudy. It is an attempt to show life satisfaction in different nations....
.
External links
- Beyond Ideology, The Social Welfare State Jeffrey D. Sachs